10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended March 31, 2006
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-22430

Asyst Technologies, Inc.

(Exact name of registrant as specified in its charter)

California	94-2942251
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

46897 Bayside Parkway, Fremont, California 94538
(Address of principal executive offices)

(510) 661-5000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock	The NASDAQ Stock Market LLC (NASDAQ Global Market)

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o     No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o      No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes o     No þ

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o     Accelerated filer  þ     Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes o     No þ

The aggregate market value of the voting and non-voting common equity held by non-affiliates as reported by the NASDAQ Global Market (known as the NASDAQ National Market prior to July 1, 2006) as of the last business day (September 29, 2006) of the registrant’s most recently completed second fiscal quarter was $250,931,000, and as of the last business day (September 30, 2005) of the registrant’s fiscal 2006 second quarter was $223,507,000.

There were 48,977,188 shares of common stock, no par value, outstanding as of September 30, 2006.

ASYST TECHNOLOGIES, INC.

TABLE OF CONTENTS

		Page No.
PART I
Item 1.	Business		2
Item 1A.	Risk Factors		11
Item 1B.	Unresolved Staff Comments		24
Item 2.	Properties		24
Item 3.	Legal Proceedings		24
Item 4.	Submission of Matters to a Vote of Security Holders		26
PART II
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		26
Item 6.	Selected Financial Data		27
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		29
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		50
Item 8.	Financial Statements and Supplementary Data		51
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		98
Item 9A.	Controls and Procedures		98
Item 9B.	Other Information		104
PART III
Item 10.	Directors and Executive Officers of the Registrant		104
Item 11.	Executive Compensation		108
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		114
Item 13.	Certain Relationships and Related Transactions		118
Item 14.	Principal Accounting Fees and Services		118
PART IV
Item 15.	Exhibits, Financial Statement Schedules		118
Signatures			124
EXHIBIT 10.17
EXHIBIT 10.22
EXHIBIT 10.30
EXHIBIT 10.37
EXHIBIT 10.38
EXHIBIT 10.39
EXHIBIT 10.40
EXHIBIT 10.41
EXHIBIT 10.42
EXHIBIT 21.1
EXHIBIT 23.1
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1

PART I

FORWARD LOOKING STATEMENTS

Except for the historical information contained herein, the following discussion includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and we are including this statement for purposes of complying with these safe harbor provisions. We have based these forward-looking statements on our current expectations and projections about future events. Our actual results could differ materially, as a result of certain factors including but not limited to those discussed in “Risk Factors” in this report and our other Securities and Exchange Commission (“SEC”) filings. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions, including those set forth in this section as well as those under the caption, “Item 1A Risk Factors.”

Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate” and variations of such words and similar expressions are intended to identify such forward-looking statements. Except as may be required by law, we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur.

The following discussion should be read in conjunction with the audited condensed consolidated financial statements and related notes included in this report and our audited consolidated financial statements and related notes as of March 31, 2006, and for each of the three years in the period ended March 31, 2006 as filed in this report. Certain prior period amounts have been reclassified to conform to current period presentation.

Unless expressly stated or the context otherwise requires, the terms “we”, “our”, “us”, “ATI”, “Asyst” and “the Company” refer to Asyst Technologies, Inc. and its subsidiaries.

ASYST, the Asyst logo, Advan Tag, Domain Logix, Fastrack, Fluorotrack, IsoPort, Spartan and Versaport are registered trademarks of Asyst Technologies, Inc. or its subsidiaries, in the United States or in other countries. SMIF-Arms, SMIF-Indexer, SMIF-LPI, SMIF-LPO, SMIF-LPT, Plus, Inx, AdvanTag, SMART-Tag, SMART-Traveler, SMART-Comm, IsoPort, EIB and NexEDA are trademarks of Asyst Technologies, Inc. or its subsidiaries, in the United States or in other countries. Asyst Shinko is a trademark of Asyst Shinko, Inc. (“ASI”) or its subsidiaries, in the United States or in other countries. All other brands, products or service names are or may be trademarks or service marks of, and are used to identify products or services of, their respective owners.

EXPLANATORY NOTE

On June 9, 2006, the Company’s Board of Directors appointed a special committee of three independent directors to conduct a formal investigation into past stock option grants and practices. The Special Committee’s investigation was completed on September 28, 2006, with the delivery of the Committee’s final report on that date. The Special Committee found instances wherein incorrect measurement dates were used to account for certain option grants.

Based on the results of the Special Committee’s investigation, the Company recorded stock-based compensation charges, and additional payroll taxes, with respect to its employee stock option grants for which the measurement dates were found to be in error. Accordingly, the Company restated the results of fiscal years 2005 and 2004, to record a net charge of approximately $0.2 million or $0.00 per share in fiscal 2005 and a net benefit of $0.8 million or $0.02 per share in fiscal 2004. Additionally, the Company recorded a net charge of $19.5 million to its accumulated deficit as of April 1, 2003 for cumulative charges relating to fiscal years prior to fiscal 2004. For more information on these matters, please refer to the following:

Part I — Item 1A — Risk Factors;

Part I — Item 3 — Legal Proceedings;

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Part II — Item 5 — Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities;

Part II — Item 6 — Selected Consolidated Financial Data;

Part II — Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations;

Part II — Item 8 — Financial Statements and Supplementary Data — Note 2 of the Notes to the Consolidated Financial Statements; and

Part II — Item 9A — Controls and Procedures.

Item 1 — Business

Overview

We develop, manufacture, sell and support integrated hardware and software automation systems primarily for the semiconductor, and secondarily for the flat panel display (“FPD”), manufacturing industries. Our systems are designed to enable semiconductor and FPD manufacturers to increase their manufacturing productivity and yields, and to protect their investment in fragile materials and work-in-process. We believe that our systems are becoming increasingly important because of several trends in the manufacturing of semiconductors and FPDs:

•  The use of larger diameter silicon wafers, which require automated handling because of ergonomic issues and increased yield risk.

•  The use of larger size glass panels for the manufacturing of FPDs, which require automated handling because of the extreme bulk and weight of the panels.

•  Continuing decreases in semiconductor device line widths, which require higher levels of cleanliness in the manufacturing process.

•  Increasingly complex semiconductor devices, which require more process steps and thus greater transportation and tool loading capabilities.

•  Continuing customer requirements for enhanced manufacturing control, productivity and return on capital.

We sell our systems directly to semiconductor and FPD manufacturers, as well as to original equipment manufacturers (“OEMs”), that make production equipment for sale to semiconductor manufacturers and FPD manufacturers.

Acquisition and Related Debt Financing Facility

On July 14, 2006, Asyst and Asyst Japan Inc. (“AJI”) purchased from Shinko Electric Co., Ltd. (“Shinko”) shares of Asyst Shinko Inc., or ASI, representing an additional 44.1% of outstanding capital stock of ASI for a cash purchase price of JPY 11.7 billion (approximately US$102 million at the July 14 exchange rate). This purchase increased Asyst’s consolidated ownership of ASI to 95.1%.

At any time prior to the first anniversary of the closing, and subject to the other provisions of the agreement, either Shinko or AJI may give notice to the other, calling for AJI to purchase from Shinko shares representing the remaining 4.9% of outstanding capital stock of ASI for a fixed payment of JPY 1.3 billion (approximately US$11.3 million at the July 14 exchange rate).

On June 22, 2006, Asyst entered into a Credit Agreement with Bank of America, N.A., as Administrative Agent, and Banc of America Securities LLC, as Lead Arranger and Book Manager, and the other parties to the agreement. The $115 million senior secured credit facility under this agreement consists of a $90 million revolving credit facility, including a $20 million sub-limit for letters of credit and $10 million sub-limit for swing-line loans, and a $25 million term loan facility. The credit agreement will terminate and all amounts outstanding will be due 3 years after the credit agreement closing date (provided that Asyst’s outstanding 53/4% convertible subordinated notes due July 3, 2008, are redeemed or repurchased, or the maturity of the notes extended, on terms reasonably

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satisfactory to the administrative agent on or before March 31, 2008; otherwise, amounts outstanding under the credit agreement will be due on March 31, 2008).

Under the senior credit agreement, we borrowed an aggregate amount of approximately $81.5 million to fund the purchase of ASI shares from Shinko on July 14, 2006, and issued a letter of credit in favor of Shinko for approximately $11 million related to the equity option on Shinko’s remaining 4.9% ASI share ownership.

Fiscal Year-end Dates

Effective as of February 18, 2005, we changed our fiscal year-end date from the last Saturday in March to March 31. Accordingly, fiscal years 2005 and 2006 ended on March 31, 2005 and 2006, respectively, and fiscal year 2004 ended on March 27, 2004. For convenience of presentation and comparison to current and prior fiscal years ended March 31, we refer throughout this report to the fiscal year ended March 31, 2004. However, all references to our fiscal year ended March 31, 2004 mean our actual fiscal year ended March 27, 2004.

Industry Background

Advances in semiconductor production equipment and facilities have supported the continuation of historical trends toward production of more complex devices on ever larger wafers. Although significant capacity is in place for producing chips on 200mm wafers, most of the industry’s incremental capacity is being added for production of chips on 300mm wafers. Semiconductor devices are increasingly complex, driving the need for more process steps. Line widths for many advanced production chips have decreased to 65 nanometers and are expected to decrease further. In addition, the increasing cost of semiconductor manufacturing equipment and facilities continues to push chip manufacturers to maximize the productivity of these investments. Keeping pace with these trends presents semiconductor manufacturers with a number of technical and economic challenges.

In response to these challenges, many chip manufacturers use automation systems to maximize tool and facility utilization and to minimize cycle times, investment in work-in-process inventory, mishandling, misprocessing and contamination. We believe that semiconductor manufacturers will increase their commitments to these solutions in their fabs, given the increasing cost of fabs, the increasing cost of work-in-process inventory, and the ergonomic issues introduced by the weight and bulk of loaded 300mm wafer carriers.

As device dimensions decrease, the harmful effects of microscopic contamination during the manufacturing process increase, heightening the need for isolation of wafers throughout manufacturing and controlled environments around tools. Isolation technology allows for control of the environment in the immediate vicinity of the in-process wafers and the tools. Wafers are enclosed in sealed carriers, which provide additional environmental control during storage, transport and loading and unloading of the tools. The carrier is docked with an automated system that typically includes a load port or other door-opening device and a robotic transfer arm to move the wafer from the carrier to the tool. An enclosure with engineered airflows surrounds and encapsulates this system. Because wafer carriers fully encapsulate the wafers during transport between process steps and during tool loading and unloading, these devices also help protect the wafers from accidental damage due to mishandling.

Semiconductor manufacturers are also increasingly automating the tracking, sorting, stocking and transport of wafers throughout the fab, as well as wafer carrier loading and unloading at the tool. In 200mm manufacturing, these technologies are employed to reduce the risk of misprocessing, to efficiently track and manage work-in-process inventory, and to speed the movement of wafers between manufacturing steps. In 300mm manufacturing, these technologies take on added importance because of the ergonomic issues associated with human transport and loading of heavy, bulky 300mm wafer carriers.

The FPD manufacturing industry uses several different sizes of glass substrates to manufacture FPDs. To some extent, manufacturers can capture economies of scale by processing very large panels, which then can be cut into appropriate sizes depending on the application. Manufacturers also are migrating to large glass panels to serve the emerging market for large-screen liquid crystal display (“LCD”) televisions. As these panels reach sizes of 8,000 square inches and more, automated transport and robotic handling systems are increasingly necessary to cope with the substantial size and weight of these glass panels.

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The Asyst Solution

We offer a comprehensive line of integrated automation systems for the semiconductor manufacturing industry. These solutions provide two distinct benefits to semiconductor manufacturers:

Increased Manufacturing Productivity.  We believe that semiconductor manufacturers are able to attain a higher level of productivity and performance in their fabs by integrating our products into their manufacturing processes. With our automated transportation, loading and wafer handling solutions, tool idle time is reduced and timely wafer delivery is improved, thereby increasing equipment utilization and productivity. In addition, our connectivity software solutions help to improve chipmakers’ access to automation performance and other tool information, which in turn can help them improve the performance of their automation and their process tools.

Higher Yields.  Our isolation technology, robotics solutions and automated transport and loading systems provide semiconductor manufacturers with efficient contamination control throughout the wafer manufacturing process and greater protection from wafer mishandling, resulting in more rapid achievement of higher yields. Our work-in-process materials management and connectivity software permits wafer-level identification, tracking and logistics management, and minimizes yield loss due to misprocessing.

In FPD manufacturing for panel sizes up to Generation (“Gen”) 6, (panels with up to approximately 5,000 square inches of surface area), we provide automated material handling systems (“AMHS”) that embody nearly identical technology to our automated guided vehicle (“AGV”) AMHS for chip fabs, but on a much larger scale to accommodate the greater size and weight of FPD glass plates. These systems are critical to the movement of material in FPD manufacturing, particularly at Gens 4, 5 and 6, because the weight and bulk of the glass panels at these Gen sizes make human transport impossible. Beginning with Gen 7, and continuing through Gen 8, the dimensions and weight of the cassettes have made the use of traditional guided vehicle technology impractical. The FPD industry therefore is adopting different transport technologies at Gen 7 and beyond.

Strategy and Business Developments

We believe that our historical success has been driven by our ability to develop, manufacture, market, install and support products that provide unique value to customers. Our continuing strategy is to focus on the development or acquisition of products and capabilities that deliver productivity and yield benefits to customers. We are focused on maintaining and enhancing our relationships with chip and FPD manufacturers and with OEMs to actively solicit their input and feedback on our product development and to maintain high customer satisfaction. We also continue to focus on operational excellence to support product quality, on-time delivery, and margin improvement. The following are our four principal growth and operating strategies:

Further Penetrate the Markets for Semiconductor and FPD AMHS.  We believe that we have the leading market share in 300mm AMHS, based on our penetration of nine of the 20 largest chip manufacturers (as measured by 2005 capital expenditures on semiconductor fabrication equipment and facilities). We have begun to penetrate the market for FPD AMHS, having substantially completed AMHS implementations in large Gen 6 FPD factories in South Korea and Taiwan. Based on the anticipated size and number of fab construction and expansion projects that we believe will move forward over the next two to three years, we believe that our combined market opportunity over that period for semiconductor and FPD AMHS is significant. We are continuing to invest in AMHS product development, both to increase the performance of current products and to develop next-generation material transport and tool loading capabilities. We believe that our market leadership in 300mm AMHS, combined with our current development efforts, positions us to capture increased market share in semiconductor AMHS.

Increase Penetration of New Tool and Fab Automation Products.  As of April 30, 2006, we had shipped approximately 200 of our new Spartan products, which include the Spartan Sorter and the Spartan Equipment Front-End Module (“EFEM”). The Spartan family of products is built on a technology platform that emphasizes simplicity, high reliability, ease of integration, and low cost. The Spartan platform also is designed to provide high wafer throughput and high levels of cleanliness. We believe that our Spartan products provide price/performance advantages and we are continuing to invest in both our sorter and EFEM products to take advantage of what we believe is a significant market opportunity. We also have developed new software products that implement the

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Interface A industry standard for equipment data acquisition and we are focused on increasing our share of the market for semiconductor manufacturing software.

Focus on Supply Chain Excellence.  We have outsourced the production of most of our tool and Fab Automation Products to Solectron in Singapore and we have migrated our supply chain to lower cost suppliers, predominantly in Asia. This has allowed us to reduce our manufacturing cost and to make many of our manufacturing costs more variable. As a result, we have been able to achieve higher gross margins on these outsourced products even as production volumes declined in fiscal year 2006. We also have significantly decreased our product lead times and improved quality and on-time delivery for these products. We believe that the ability to deliver high-quality products on short lead times can be a competitive advantage in the semiconductor equipment industry. We have begun to implement a program to move more of our AMHS supply chain to lower cost sources.

Increase customer satisfaction.  We believe that focusing on customer satisfaction is a key driver of repeat business and market share gains. We have a customer report card process that allows us to monitor our success in increasing our customer satisfaction as well as to understand specific customer requirements that may not be uncovered in the normal course of doing business. We believe that providing our customers with increased flexibility, faster response times, and timely responses to inquiries gives us a competitive advantage. Our customers are very demanding, and if we are able to provide these customers with a differentiated level of service and response, we should have more loyal customers over time.

Products

Tool Automation Components

Our tool automation components are designed to automate the rapid transfer of wafers and other substrates between manufacturing equipment and wafer and substrate carriers while maintaining an ultra-clean environment throughout the transfer. These components are sold to OEMs for integration with their tools or directly to fabs that are adding isolation technology to existing equipment as a manufacturing process enhancement. Our tool automation components include multiple types of 200mm and 300mm loadports and substrate-handling robotics.

Loadports

We are a leading supplier of automated systems that provide the interface between the fab and manufacturing equipment, or loadports. The IsoPort, our latest generation loadport for the 300mm market, has received strong customer acceptance. We offer a variety of other input/output systems designed to address a broad range of customer applications and equipment types. These include SMIF-LPTs, SMIF-Arms, SMIF-Indexers, SMIF-LPIs, SMIF-LPOs, Versaport 2200’s, and related products.

Substrate-Handling Robotics

We offer comprehensive robotic substrate handling solutions to the semiconductor and related industries. Our robotics products transfer semiconductor wafers and substrates of all diameters, LCD and plasma display substrates, and other substrates like rigid disks used in disk drive handling between the substrate carrier, the tool interface system and the tool itself. These products include robots, pre-aligners and elevators specifically designed for atmospheric, harsh environment, and wet chemical process applications.

Systems

Our systems include wafer sorters and fully integrated atmospheric EFEMs. Our sorters are primarily sold to semiconductor makers and our EFEMs are typically sold to OEM tool manufacturers.

EFEMs

Most 300mm wafer fabrication equipment requires an automated atmospheric EFEM solution that enables the clean, automated transfer of wafers from the wafer carrier to the tool and back again. As a result, most manufacturers of process and metrology tools pre-integrate EFEMs with their tools before shipping to the end customer. This integration can be accomplished in two ways: (1) The OEM can purchase or manufacture various

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automation components — loadports, atmospheric robotics, wafer ID systems — and perform the mechanical and software integration necessary to make the components work together as a system, or (2) The OEM can purchase a fully integrated EFEM from a third-party supplier, such as Asyst. Our line of EFEM solutions combines our expertise in isolation systems, work-in-process materials management, substrate handling robotics and connectivity solutions to provide a complete, integrated, automated front-end for process and metrology equipment. For the OEM, use of our EFEM solution substantially reduces the labor and engineering resources required to assemble and integrate a front-end solution in-house. Our EFEMs also can simplify the installation and set-up of the tool and associated front-end upon arrival at the end customer. Our Plus Portal line combines our components — atmospheric robots, environmental control systems, integrated input/output interfaces, automated ID and tracking systems, and connectivity software — into an integrated solution for OEMs. Our newest EFEM offering, the Spartan EFEM, achieves EFEM functionality through a unified, minimalist approach that uses significantly fewer components, thereby reducing alignment and interoperability issues between components and simplifying maintenance and repair.

We believe the Spartan EFEM offers significantly higher performance than our current Plus Portal line, in addition to higher reliability and ease of integration. Because Spartan was designed for volume manufacturing, we believe that it also will provide cost advantages to customers as well as margin advantages to us.

Sorters

Our sorters are used to rearrange wafers between manufacturing processes, experiments, and single wafer processing, without operator handling, which helps to increase fab yields. Sorters also avoid the mishandling of wafers by enabling the tracking and verification of each wafer throughout the production process. We have enjoyed significant market success with our new Spartan Sorter.

AMHS for Semiconductor Manufacturing

Our semiconductor AMHS is primarily configured and sold as a system. The system typically consists of overhead track, overhead shuttle vehicles (“OHS”) for bay-to-bay (“inter-bay”) transport, overhead transport vehicles (“OHT”) for intrabay transport and tool loading, stockers, and MCS software.

Wafer Stockers.  Our wafer stockers are large structures that contain up to several hundred temporary storage locations as well as lifts and robots for moving and staging materials or for moving material from one floor of a fab to another floor.

OHT.  Our OHT vehicles hang from track that is suspended from the fab ceiling. The vehicles transport wafer pods within the bay and inter-bay and are capable of loading and unloading the wafer pods to or from tools. Asyst’s OHT has been engineered to provide the greatest possible speed of transport while keeping the forces of acceleration, deceleration and vibration to a minimum.

OHS.  The primary application of OHS is to move wafer pods rapidly from interbay and to hand-off pods to wafer stockers. As with OHT, OHS is engineered to achieve high speed while limiting forces that can cause damage to the wafers.

AGV.  AGVs are primarily used for supplementary or emergency wafer transport. AGVs can be useful for expediting hot lots through the fab and for transporting material when OHT is not available.

Rail Guided Vehicle (“RGV”).  Our RGVs are capable of very high speeds for intrabay transport. However, because floor-mounted rails consume valuable floor space, RGVs typically are used for more limited and specialized applications where high speed is required.

AMHS for FPD Manufacturing

LCD Stocker.  In the FPD industry, stockers are used for temporary storage of work-in-progress glass panels. The stocker includes multiple storage locations as well as lifts, ports, and robots to manage the materials. We currently offer stockers for Gens 4, 5 & 6 sized glass panels.

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LCD AGVs.  At Gens 4, 5 & 6, very large AGVs are used to transport cassettes of glass from the stocker to the process tool, and between tools. Our AGV technology for FPD applications is based on the same controls technology used in AGVs for semiconductor.

Connectivity Solutions

Auto-ID Systems

Our SMART-Traveler system allows semiconductor manufacturers to reduce manufacturing errors and to achieve cycle time and equipment utilization improvements by improving their abilities to manage work-in-process inventory. The SMART-Traveler system includes both infra-red and radio-frequency based products for automated wafer and reticle identification. The SMART-Tag product is an electronic memory device that combines display, logic and communication technologies to provide process information about the wafers inside the carrier, such as wafer lot number and next processing steps. Our AdvanTag automated ID uses a radio-frequency based identification tag that can be attached to or embedded into wafer and reticle carriers. The SMART-Traveler system also includes the SMART-Comm product, a multiplexing and communication protocol converting device that increases operator and tool efficiency in semiconductor facilities by optimizing communications and minimizing hardware and software layers.

Software

We are the largest merchant provider of the industry-standard software driver protocol for communications between tools and fab host systems, known as SECS/GEM. We have developed and currently are marketing the next-generation Equipment Information Bridge (“EIB”) and NexEDA software products, which are software solutions that comply with the Semiconductor Equipment and Materials International (“SEMI”) Interface A standard. As the market share and technology leader, Asyst’s software provides “data on demand” functionality for advanced manufacturing applications. Asyst supplies customers with a suite of software products that simplify the complex challenges associated with data collections, tool connectivity and equipment and fab automation.

Customers

Semiconductor and FPD manufacturers drive our sales primarily by building new fabs or expanding capacity. We serve these manufacturers directly and through OEMs. Our net sales to OEMs represented approximately 24 percent, 24 percent and 25 percent of our total net sales for the fiscal years ended March 31, 2006, 2005 and 2004, respectively.

Our net sales to any particular semiconductor or FPD manufacturer customer depend on the number of new fabs the customer is building and the amount of capacity the customer is adding. As major projects are completed, the amount of sales to these customers will decline unless they undertake new projects. Our net sales to any particular OEM depend on the extent to which our automation products are designed-in to the OEM’s product line and the unit shipments of those product lines. During fiscal year 2006, Taiwan Semiconductor Manufacturing Corp. accounted for approximately 12 percent of net sales. During fiscal year 2005, AU Optronics Corp. and Taiwan Semiconductor Manufacturing Corp. accounted for approximately 20 percent and 12 percent of net sales, respectively. During fiscal year 2004, L.G. Philips and Taiwan Semiconductor Manufacturing Corp. accounted for approximately 18 percent and 10 percent of net sales, respectively. During the fiscal years ended March 31, 2006, 2005 and 2004, no other customer accounted for more than 10 percent of net sales.

Sales and Marketing

We sell our products principally through a direct sales force in the U.S., Japan, Europe and the Asia/Pacific region. Our sales organization is based in California and Japan; however we have offices throughout North America, Europe and Asia. Our U.S. field sales personnel are stationed in Colorado, Arizona, Oregon, Massachusetts, New York and Texas. Japan is supported by sales and service offices in Tokyo, Nagoya and Yokohama and a software distributor. The European market is supported through offices in Paris, France and Dresden, Germany, and a software distributor. The Asia/Pacific region is supported through sales and service offices in Hsinchu, Taichung, and Tainan, Taiwan; Singapore; Kuching and Kulim, Malaysia; Shanghai and Tianjin, People’s Republic of China;

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and Seoul, South Korea as well as a strategic alliance with a systems integrator. We supplement our direct sales efforts in Asia/Pacific through a distributor in China.

International sales, which consist mainly of sales generated from customers outside the U.S., accounted for approximately 81 percent, 82 percent and 79 percent of total sales for fiscal years 2006, 2005 and 2004, respectively. In fiscal year 2006, approximately 77 percent of total net sales originated from ASI and Asyst Japan, Inc. (“AJI”) our majority own subsidiaries. A substantial portion of those sales were invoiced in Japanese yen and subject to fluctuating currency exchange rates.

The sales cycle to new customers ranges from six to twelve months or longer from initial inquiry to placement of an order, depending on the type and complexity of the project and the time required to communicate the nature and benefits of our systems. For sales to existing customers, the sales cycle is relatively short. The sales cycle for follow-on orders by OEM customers can be as short as two to three weeks. The sales cycle for AMHS projects tends to be longer than for our other products because of substantial specification and other pre-sales activity related to an AMHS order.

Research and Development

Research and development efforts are focused on enhancing our existing products and developing and introducing new products in order to maintain technological leadership and meet a wider range of customer needs. Our research and development expenses were approximately $28 million, $35 million and $36 million during fiscal years 2006, 2005 and 2004, respectively.

Our research and development employees are involved in mechanical and electrical engineering, software development, micro-contamination control, product documentation and support. Our central research and development facilities include a prototyping lab and a cleanroom used for product research, development and equipment demonstration purposes. These research and development facilities are primarily located in Fremont, California. ASI conducts AMHS-related research and development at its facility in Ise, Japan.

Manufacturing

Our manufacturing activities consist of assembling and testing components and sub-assemblies, which are then integrated into finished systems. While we use standard components whenever possible, many mechanical parts, metal fabrications and castings are made to our specifications. Once our systems are completed, we perform final tests on all electronic and electromechanical sub-assemblies and cycle products before shipment and/or upon installation at the customer site.

We have transitioned most of our U.S.-based manufacturing operations to Solectron Corporation (“Solectron”), a provider of outsourced manufacturing services. Most of the Solectron-manufactured products ship out of Solectron’s facilities in Singapore. We have transitioned the manufacturing of most of our AJI robotics products to outsourced manufacturers in Japan. ASI primarily constructs its AMHS systems at the customer site. ASI primarily uses subcontractors for installation support. Many of ASI’s system components are manufactured and delivered to the customer site by its suppliers. ASI’s vehicles and certain critical subassemblies are manufactured at its facilities in Ise, Japan.

Competition

We currently face direct competition in all of our served markets. Many of our competitors have extensive engineering, manufacturing and marketing capabilities and some have greater financial resources than those available to us. The markets for our products are highly competitive and subject to rapid technological changes and pricing pressure.

In the area of AMHS, we face competition primarily from Daifuku Co., Ltd. and Murata Co., Ltd. Brooks Automation, Inc. (“Brooks”) and TDK Corporation of Japan (“TDK”) are our primary competitors in the area of loadports. Our wafer sorters compete primarily with products from Recif, Inc. and Rorze Corporation (“Rorze”). We face competition for our software products primarily from Cimetrix. Our SMART-Traveler system products face competition from Brooks (through its acquisition of Hermos) and Omron. We also compete with several

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companies in the robotics area, including, but not limited to, Brooks, Rorze and Yazkawa-Super Mecatronics Division.

Although most of our competitors currently do not compete with us across our entire line of integrated automation systems, we expect that some may attempt to do so in the future. In addition, many OEMs maintain their own captive automation manufacturing and integration capabilities, which is a substantial impediment to our penetration of these OEMs. We anticipate that many OEMs will continue to maintain their own captive automation manufacturing capabilities.

We believe that the principal competitive factors in our market are the technical capabilities and characteristics of systems and products offered; interoperability with other components and systems; technological experience and know-how; product breadth; proven product performance, quality and reliability; ease of use; flexibility; a global, trained, skilled field service support organization; the effectiveness of marketing and sales; and price. We believe that we compete favorably in our primary market with respect to the foregoing factors.

We expect that our competitors will continue to improve the design and performance of their products and to introduce new products with competitive performance characteristics. We believe we will be required to maintain a high level of investment in research and development, and sales and marketing in order to remain competitive.

Intellectual Property

We pursue patent, trademark and/or copyright protection for most of our products. We currently hold 110 issued United States patents (of which have 47 foreign equivalents) and 3 additional foreign patents without United States equivalents. We have 25 patent applications pending in the United States, and 98 pending foreign patent applications. Asyst Shinko, Inc., our majority-owned subsidiary, holds 26 issued United States patents, which expire between 2010 and 2019. Our patents expire between 2006 and 2021. We intend to file additional patent applications as appropriate. There can be no assurance that patents will be issued from any of these pending applications or that any claims in existing patents, or allowed from pending patent applications, will be sufficiently broad to protect our technology. Rights that may be granted under our patent applications that may issue in the future may not provide us competitive advantages or protections. Further, patent protections in foreign jurisdictions where we may need this protection may be limited, unavailable or not readily enforceable. While we intend to take reasonable and timely steps to establish our intellectual property rights to gain competitive advantage, there can be no assurance that we will obtain patents and other intellectual property rights.

There has been substantial litigation regarding patent and other intellectual property rights in semiconductor-related industries. There can be no assurance that any of our patents will not be challenged, invalidated or avoided, or that the rights granted there under will provide us with competitive advantages. Litigation may be necessary to enforce our patents, to protect our trade secrets or know-how, to defend us against claimed infringement of the rights of others, or to determine the scope and validity of the patents or other intellectual rights of others. Any such litigation could result in substantial cost and divert the attention of management, which by itself could have a material adverse effect on our financial condition and operating results. Further, adverse determinations in such litigation could result in our loss of intellectual property rights, subject us to significant liabilities to third parties, and require us to seek licenses from third parties or prevent us from manufacturing or selling our products, any of which could have a negative impact on our financial condition and results of operations. For more information regarding litigation in which we are currently engaged, please see “Item 3 — Legal Proceedings” below.

It is difficult to monitor unauthorized use of technology, particularly in foreign countries where the laws may not protect our proprietary rights as fully as in the United States. In addition, our competitors may independently develop technology similar to ours. We will continue to assess appropriate occasions for seeking patent and other intellectual property protections for those aspects of our technology that we believe constitute innovations that provide significant competitive advantages. We also rely on trade secrets and proprietary technology that we seek to protect, in part, through confidentiality agreements with employees, consultants, customers and other parties. There can be no assurance that these agreements will be observed, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known to or independently developed by others. Also, the laws of some foreign countries do not protect our intellectual property rights to the same extent as the laws of the U.S.

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Backlog

Our backlog was approximately $156 million, $192 million, and $168 million as of March 31, 2006, 2005 and 2004, respectively. We include in our backlog only orders for which a customer’s purchase order has been received and a delivery date within 12 months has been specified. As backlog may be cancelled or delayed by customers with limited or no penalty, our backlog is not necessarily indicative of future revenues or earnings or the timing of revenue or earnings.

Employees

As of March 31, 2006, we had 947 full-time and 96 temporary employees. Of the 947 full-time employees, 444 were at ATI and its subsidiaries other than ASI, and the remaining 503 were at ASI and its subsidiaries. Of the 96 temporary employees, 12 were at ATI and its subsidiaries other than ASI, and the remaining 84 were at ASI and its subsidiaries. Approximately 208 employees of ASI are represented by a labor union. We consider our employee relations to be good, and we have never had a work stoppage or strike.

Financial Information by Business Segment and Geographic Data

As a result of our more than 50 percent majority ownership of the common stock of ASI, which was formed in October 2002, we now operate and track our results in two reportable segments: Fab Automation and AMHS. Fab Automation includes interface products, substrate-handling robotics, auto-ID systems, sorters and connectivity software. AMHS products include automated transport and loading systems for semiconductor fabs and flat panel display manufacturers. The chief operating decision maker is our Chief Executive Officer. Information concerning reportable segments is included in Note 12 of Notes to the Consolidated Financial Statements and is incorporated herein by reference.

Environmental Compliance

Our operations are subject to certain federal, state and local regulatory requirements relating to the use, storage, discharge and disposal of hazardous chemicals used during the manufacturing processes. We believe that our operations are currently in compliance in all material respects with applicable regulations and do not believe that costs of compliance with these laws and regulations will have a material effect on our capital expenditures, operating results or competitive position. Currently we have no commitments with environmental authorities regarding any compliance related matters. However, there can be no assurance that additional environmental matters will not arise in the future or that costs will not be incurred with respect to sites as to which no problem is currently known.

Additional Information and Governance Matters

The Company was incorporated in California on May 31, 1984.

The Company’s website is www.asyst.com.

The Company makes the following filings available on our website as soon as reasonably practicable after they are electronically filed with or furnished to the SEC: our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished under applicable provisions of the Securities Exchange Act of 1934 and SEC rules. You may access these filings through our website at http://www.asyst.com by clicking on “Investor Relations,” and then “SEC Filings.” Within the “SEC Filings” section, we provide a link to view our SEC filings referred to above, and a separate groupings link to view the Section 16 filings (Forms 3, 4 and 5) that our directors and officers (and, if applicable, more than 10.0 percent stockholders) make to report initial beneficial ownership and changes in beneficial ownership of our common stock.

The Company’s Code of Business Conduct is applicable to the Company’s directors, officers and employees, and meets the SEC definition of a code of ethics. The code also includes a section entitled “Special Obligations of our CEO and CFO” applicable to our principal executive, principal financial and principal accounting officers that contains specific standards applicable to these senior officers with responsibilities for disclosure to investors and financial reporting. We have made the code available on our website, by clicking on “Investor Relations,” then

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“Corporate Governance” and then “Highlights.” As permitted by SEC rules, we have posted the code on our website in lieu of filing the code as an exhibit to this Form 10-K. Other information concerning our Board of Directors and corporate governance is also available under the “Corporate Governance” link.

Under NASDAQ listing standards, the Company may grant waivers of the Code of Business Conduct for directors and officers only if approved by the Board of Directors, and must make any such waivers along with the reasons for the waivers publicly available by filing a Form 8-K. Under SEC rules, the Company is required to file a Form 8-K to disclose any amendment of the code (other than non-substantive amendments) or any explicit or implicit waiver of the code (i.e., any material departure from the code) granted to the chief executive officer, chief financial officer, principal accounting officer or controller, or persons performing similar functions, if the waiver relates to matters contained in the SEC’s definition of a code of ethics. As permitted by SEC rules, the Company intends to satisfy the requirement under SEC rules to disclose amendments and waivers of the code by posting this information on our website under the Corporate Governance link indicated above. To the extent the NASDAQ rules do not permit this alternate means of disclosure allowed by SEC rules, the Company will file a Form 8-K to report waivers, if any.

All of the filings and governance documents available under the Investor Relations link on our website are free of charge.

Item 1A — Risk Factors

We have a history of significant losses.

We have a history of significant losses. For the year ended March 31, 2006, our net loss was $0.1 million and accumulated deficit at March 31, 2006 was $385.2 million, compared to a net loss of $17.7 million for the fiscal year ended March 31, 2005 and accumulated deficit of $385.1 million at March 31, 2005. We may also continue to experience significant losses in the future.

We face significant pending and potential risks in connection with our outstanding indebtedness; if we are not able to resolve existing uncertainties and restructure portions of this debt on a timely basis on desired terms in the future, our ability to discharge our obligations under this indebtedness, liquidity and business may be materially harmed.

We have a significant amount of outstanding indebtedness that has increased substantially since the end of fiscal year 2006:

•  Under a senior secured credit agreement entered into in June 2006 with Bank of America, N.A., as lender and administrative agent and other lenders, we borrowed an aggregate amount of approximately $81.5 million to fund the purchase of ASI shares from Shinko on July 14, 2006, as described under “Item 1 — Business, Share Purchase Agreement,” and issued a letter of credit in favor of Shinko for approximately $11 million related to the equity option on Shinko’s remaining 4.9% ASI share ownership. This credit agreement provides a $115 million senior secured credit facility consisting of a $90 million revolving credit facility, including a $20 million sub-limit for letters of credit and $10 million sub-limit for swing-line loans, and a $25 million term loan facility. The credit agreement will terminate and all amounts outstanding will be due in three years after July 14, 2006, provided that Asyst’s outstanding 53/4% convertible subordinated notes due July 3, 2008, are redeemed or repurchased, or the maturity of the notes extended, on terms reasonably satisfactory to the administrative agent on or before March 31, 2008; otherwise, amounts outstanding under the credit agreement will be due on March 31, 2008.

•  We have approximately $86.3 million outstanding under our 53/4% convertible subordinated notes privately issued in July 2001. These notes are convertible, at the option of the holder, at any time on or prior to maturity into shares of our common stock at a conversion price of $15.18 per share. We are required to pay interest on these convertible notes on January 3 and July 3 of each year. These notes mature July 3, 2008 and are redeemable at our option.

•  In a letter delivered to us and dated August 16, 2006, the trustee under the indenture relating to these notes asserted that Asyst is in default under the notes’ indenture because of the previously announced delays in

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filing with the SEC and the trustee this report on Form 10-K and in filing with the SEC our Form 10-Q for the fiscal quarter ended June 30, 2006. The letter stated that this asserted default was not an “Event of Default” under the indenture if the Company cures the default within 60 days after receipt of the notice, or if the default is waived by the holders of a majority in aggregate principal amount of the notes outstanding.

•  If an Event of Default were to occur, and is continuing under the indenture, the trustee or the holders of at least 25% in aggregate principal amount of the notes at the time outstanding may accelerate maturity of the notes.

•  Asyst does not agree with the trustee’s assertion that the delays in filing of the annual and quarterly reports constitutes a default under its indenture. Nonetheless, in conjunction with the filing of this report on Form 10-K, we intend to file with the SEC our report on Form 10-Q for the fiscal quarter ended June 30, 2006. Upon completion of those filings, we intend to deliver to the trustee copies of the reports on Forms 10-K and 10-Q, and that delivery will cure any purported defaults under the indenture and asserted by the trustee in its letter referenced above.

•  At March 31, 2006, ASI had five revolving lines of credit with Japanese banks. These lines allow aggregate borrowing of up to 7 billion Japanese Yen, or approximately $60 million at the exchange rate as of March 31, 2006. As of March 31, 2006, the amount available under these lines of credit was 7 billion Japanese Yen or approximately $60 million at the exchange rate as of March 31, 2006.

•  Comerica Bank has agreed to continue to maintain a letter of credit in the amount of $750,000 in favor of the landlord under our current headquarters lease in Fremont, California, on an unsecured basis, notwithstanding the previously reported termination of the Amended and Restated Loan and Security Agreement dated as of May 15, 2004, between Asyst and Comerica Bank (which termination became effective with the borrowing described above under the senior secured credit facility). There were no amounts outstanding for borrowed money under the Comerica Bank line of credit that otherwise was scheduled to expire on July 30, 2007.

The $115 million senior secured credit agreement contains financial and other covenants, including, but not limited to, limitations on liens, mergers, sales of assets, capital expenditures, and indebtedness as well as the maintenance of a maximum total leverage ratio, maximum senior leverage ratio, and minimum fixed charge coverage ratio, as defined in the agreement. Additionally, although Asyst has not paid any cash dividends on its common stock in the past and does not anticipate paying any such cash dividends in the foreseeable future, the facility restricts its ability to pay such dividends (subject to certain exceptions, including the dividend payments from ASI to Shinko provided under the Share Purchase Agreement described in Item 1 in this report). Nonpayment of amounts due, a violation of these covenants or the occurrence of other events of default set forth in the credit agreement including a cross-default under the indenture could result in a default permitting the termination of the lenders’ commitments under the credit agreement and/or the acceleration of any loan amounts then outstanding

While we experienced improvements in our financial results for fiscal year 2006 and we expect to meet the financial covenants under our various borrowing arrangements in the future, we cannot give absolute assurance that we will meet these financial covenants, including those contained in the senior secured credit facility. Specifically, we are required to maintain compliance with covenants establishing minimum EBITDA operating performance by the Company as a ratio of our total borrowing available under the senior secured credit facility. Our failure in any fiscal quarter to meet those and other covenant requirements could result in a reduction of our permitted borrowing under the facility, an acceleration of certain repayment obligations, and/or an Event of Default (which, if uncured by us or not waived by the lenders under the terms of the facility, would require the acceleration of all re-payment obligations under the facility

Alternatively, due to the cyclical and uncertain nature of cash flows and collections from our customers, our borrowing to fund operations or working capital could exceed the permitted total leverage ratios under the credit agreement. Under any such scenario, the Company may be required to pay down the outstanding borrowings from available cash to maintain compliance with our financial covenants. If we are unable to meet any such covenants, we cannot assure the requisite lenders will grant waivers and/or amend the covenants, or that the requisite lenders will

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not terminate the credit agreement, preclude further borrowings or require us to repay immediately in full any outstanding borrowings.

Under the terms of its bank facilities in Japan, ASI must generate operating profits on a statutory basis and must maintain a minimum level of equity. Additionally, under the terms of its bank facilities, AJI’s loans may be called upon, in an “event of default”, in which case the Japanese banks may call the loans outstanding at AJI, requiring immediate repayment, which we have guaranteed.

If a holder of our long term or short term indebtedness were in the near future to demand accelerated repayment of all or a substantial portion of our outstanding indebtedness that exceeds the amount of our available liquid assets that could be disbursed without triggering further defaults under other outstanding indebtedness, we would not likely have the resources to pay such accelerated amounts, would be required to seek funds from re-financing or re-structuring transactions for which we have no current basis to believe we would be able to obtain on desired terms or at all, and would face the risk of a bankruptcy filing by us or our creditors. Any accelerated repayment demands that we are able to honor would reduce our available cash balances and likely have a material adverse impact on our operating and financial performance and ability to comply with remaining obligations. If we are able to maintain our current indebtedness as outstanding, the restrictive covenants could impair our ability to expand or pursue our business strategies or obtain additional funding.

We may not be able to negotiate by March 31, 2008, an extension of the maturity of all of the convertible notes in a manner satisfactory to the senior lenders under the secured credit facility, or on economic terms acceptable to us. If we fail to re-negotiate that maturity, then the existing terms of the senior credit facility call for full repayment of that obligation on March 31, 2008, and it is not likely that we would have the resources to repay such indebtedness on that date (in the absence of new proceeds from other sources or financings, which we have no assurance we can obtain or would be available to us on economic terms acceptable to us).

Under certain circumstances, Shinko can accelerate upon thirty (30) days written notice our obligation to purchase the remaining 4.9% equity it holds in ASI (for a purchase price of approximately US $11 million at the June 2006 exchange rates when the agreement was signed). These circumstances include (a) when AJI’s equity ownership in ASI falls below 50%, (b) when bankruptcy or corporate reorganization proceedings are filed against the Company or AJI; (c) when a merger or corporate reorganization has been approved involving all or substantially all of the Company’s assets; (d) when Shinko’s equity ownership in ASI falls below 4.9%; or (e) when the Company has failed to make any payment when due in respect of any loan secured by a pledge of the Company’s right, title and interest in and to the shares of ASI (and the holder of such security interest elects to exercise its rights against AJI in respect of such shares). In any such event, an acceleration could impose on us an unforeseen payment obligation, which could impact our liquidity or which payment could be subject to restrictions or covenants, or be subject to third party approvals under our debt facilities. Our inability to purchase the remaining ASI equity held by Shinko, when and as required, could significantly impact our continued control and ownership of ASI.

As a general matter, our operations have, in the past, consumed cash and may do so in the future. We have in the past obtained additional financing to meet our working capital needs or to finance capital expenditures, as well as to fund operations. We may be unable to obtain any required additional financing on terms favorable to us, if at all, or which is not dilutive to our shareholders. If adequate funds are not available on acceptable terms, we may be unable to meet our current or future obligations on a timely basis, fund any desired expansion, successfully develop or enhance products, respond to competitive pressures or take advantage of acquisition opportunities, any of which could have a material adverse effect on our business. If we raise additional funds through the issuance of equity or convertible securities, our shareholders may experience dilution of their ownership interest, and the newly-issued securities may have rights superior to those of our common stock. If we raise additional funds by issuing new or restructured debt, we may be subject to further limitations on our operations. Any of the foregoing circumstances could adversely affect our business

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We face additional risks and costs as a result of the delayed filing of our SEC reports described below and the time, cost and outcome of our Special Committee investigation into past stock option grants and practices.

We delayed the filing of this Form 10-K, and our Form 10-Q for the fiscal quarter ended June 30, 2006, pending completion of a previously announced independent investigation into our past stock option grant practices, being conducted by a Special Committee of our Board of Directors. Due to this delay and review, we have experienced substantial additional risks and costs.

In May 2006, certain analysts published reports suggesting that Asyst may have granted stock options in the past with favorable exercise prices in certain periods compared to stock prices before or after the grant dates. In response to such reports, management began an informal review of the Company’s past stock option grant practices. On June 7, 2006, the SEC sent a letter to the Company requesting a voluntary production of documents relating to past option grants (1997 to the present). On June 9, 2006, the Company’s Board of Directors appointed a Special Committee of three independent directors to conduct a formal investigation into past stock option grants and practices. The Special Committee retained independent legal counsel and independent forensic and technical specialists to assist in the investigation. We subsequently received on June 26, 2006; a federal court grand jury subpoena initiated by the U.S. Attorney’s Office requesting production of documents relating to our past stock option grants and practices (1995 to the present).

The Special Committee’s investigation was completed on September 28, 2006, with the delivery of the Committee’s final report on that date. The investigation covered options grants made to all employees, directors and consultants during the period from January 1995 through June 2006. The Special Committee determined that the last option grant for which the measurement date was found to be in error was made in February 2004.

Specifically, the Special Committee determined that (1) there was an insufficient basis to rely on the Company’s process and relating documentation to support recorded measurement dates used to account for most stock options granted primarily during calendar years 1998 through 2003; (2) the Company had numerous grants made by means of unanimous written consents signed by Board or Compensation Committee members wherein all the signatures of the members were not received on the grant date specified in the consents; and (3) the Company made several company-wide grants pursuant to an approval of the Board or Compensation Committee, but the list of grantees and number of options allocated to each grantee was not finalized as of the stated grant date.

The Special Committee also found that, during the period from April 2002 through February 2004, the Company followed a practice to set the grant date and exercise price for option grants for new hires and promotions of rank and file employees (non-officer employees) at the lowest price of the first five business days of the month following the month of their hire or promotion. The net impact of this practice was an aggregate charge of less than $400,000.

The Special Committee’s inquiry also identified less frequent errors in other categories that the Company believes were not material, such as grants made to a small number of employees who had not formally commenced their employment as of the grant approval date, and modifications or amendments made to then-existing options that were not properly accounted. The Special Committee also identified isolated instances where stock option grants did not comply with applicable terms and conditions of the stock plans from which the grants were issued.

The Special Committee received the Company’s full cooperation, and appropriate cooperation from our former officers and directors. As part of its investigation, the Committee, through the assistance of independent counsel and independent forensic and technical advisors, interviewed numerous current and former Company employees, officers and directors associated with our current and past stock option grant practices and processes, and reviewed more than 100,000 pages of hard copy, electronic communications and files, and SEC filings, as well as stock option plans, policies and practices relating to our approval, recording and accounting of stock option grants. The Special Committee completed its investigation consistent with its original scope and work plan, and found no evidence of any intention to deceive or impede the Committee’s investigation or to destroy or alter documents.

The Special Committee found no evidence that any incorrect measurement dates was the result of fraudulent conduct, and concluded that the errors in measurement dates it reviewed resulted primarily from a combination of

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unintentional errors, lack of attention to timely paperwork, and lack of internal control over aspects of equity plan administration (including lack of oversight in applying the applicable accounting rule in connection with determining measurement dates) during the period in which the errors occurred

Based on results of the Special Committee’s investigation, the Company recorded stock-based compensation charges, and additional payroll taxes with respect to its employee stock option grants for which the measurement dates were found to be in error. While the impact of recording these charges was not material to any of the fiscal years ended March 31, 2002 through 2006, the Company deemed it appropriate to record the charges in the relevant periods. Accordingly, the Company restated the results of fiscal years 2005 and 2004, to record a net charge of approximately $0.2 million or $0.00 per share in fiscal 2005 and a net benefit of $0.8 million or $0.02 per share in fiscal 2004. Additionally, the Company recorded a net charge of $19.5 million to its accumulated deficit as of April 1, 2003 for cumulative charges relating to fiscal years prior to fiscal 2004.

The option grant investigation was time-consuming, required Asyst to incur significant additional expenses, estimated to be approximately $4.0 to $5.0 million over the first three quarters of our fiscal year 2007, and required significant management attention and resources during this period.

As a result of the delay in filing this Form 10-K and the Form 10-Q for our fiscal quarter ended June 30, 2006, we have received notices from the NASDAQ Global Market to the effect that our common stock would be de-listed unless prior to November 30, 2006, we file this Form 10-K and the Form 10-Q for the fiscal quarter ended June 30, 2006, with any required restatements. For further information, see Note 15 in Notes to the Consolidated Financial Statements.

As noted above, in June 2006, the SEC and the United States Justice Department initiated inquiries relating to the option grant practices that were the subject to the Special Committee’s investigation described above. We intend to cooperate fully with these inquiries.

In addition, certain of the Company’s current and former directors and officers of the Company have been named as defendants in two consolidated shareholder derivative actions filed in the United States District Court of California, captioned In re Asyst Technologies, Inc. Derivative Litigation (N.D. Cal.) (the “Federal Action”), and one similar shareholder derivative action filed in California state court, captioned Forlenzo v. Schwartz, et al. (Alameda County Superior Court) (the “State Action”). Both Actions seek to recover unspecified monetary damages, disgorgement of profits and benefits, equitable and injunctive relief, and attorneys’ fees and costs. The State Action also seeks the imposition of a constructive trust on all proceeds derived from the exercise of allegedly improper stock option grants. The Company is named as a nominal defendant in both the Federal and State Actions; thus, no recovery against the Company is sought.

We are not able to predict the future outcome of these governmental inquiries and legal actions. These matters could result in significant legal expenses, diversion of management’s attention from our business, commencement of formal civil or criminal administrative or litigation actions against Asyst or our current or former employees or directors, significant fines or penalties, indemnity commitments to current and former officers and directors and other material harm to our business. The SEC may also disagree with the manner in which we have accounted for and reported (or not reported) the financial impact of past option grant measurement date errors or other potential accounting errors, and there is a risk that its inquiry could lead to circumstances in which we may have to further restate our prior financial statements, amend prior SEC filings, or otherwise take other actions not currently contemplated. Any such circumstance could also lead to future delays in filing of our subsequent SEC reports, and consequent risks of defaults under debt obligations and de-listing of our common stock.

As a result of the delay in filing this report and the Form 10-Q for our fiscal quarter ended June 30, 2006, we are not eligible to register any of our securities on Form S-3 for sale by us or resale by others until we have timely filed all reports required to be filed under the Securities Exchange Act of 1934 during the 12 months, and any portion of a month, immediately preceding the filing of a registration statement on Form S-3. This condition may adversely affect our ability to restructure outstanding indebtedness, to raise capital by other means, or to acquire other companies by using our securities to pay the acquisition price.

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If we continue to fail to achieve and maintain effective disclosure controls and procedures and internal control over financial reporting on a consolidated basis, our stock price and investor confidence in our Company could be materially and adversely affected.

We are required to maintain both disclosure controls and procedures and internal control over financial reporting that are effective for the purposes described in Item 9A of Part II below. If we fail to do so, our business, results of operations or financial condition and the value of our stock could be materially harmed.

Item 9A of Part II reports our conclusion that our disclosure controls and procedures and internal control over financial reporting were not effective as of March 31, 2006, due to material weaknesses in internal control over financial reporting that remained outstanding at that date and that are subject to our continuing remediation efforts. The information below should be read in conjunction with Item 9A and the report of our independent registered public accounting firm appearing at the end of our financial statements included in Item 8 of Part II.

In our Form 10-K filed June 29, 2005, the first year we included an internal control report, we also reported that our disclosure controls and procedures and internal control were not effective. However, last year we reported eleven separately described material weaknesses. We describe in Item 9A of this report two material weaknesses. We believe we have made substantial progress in remediating previously reported material weaknesses.

We are devoting now, and will likely need to continue to devote in the near future, significant resources in our efforts to achieve effective internal control. These efforts have been and may continue to be costly. We cannot assure that these efforts will be successful. Until we have fully remediated the material weaknesses referred in Item 9A, we may face additional risks of errors or delays in preparing our consolidated financial statements and associated risks of potential late filings of periodic reports, NASDAQ listing standard violations, risks of correcting previously filed financial statements, increased expenses, and possible private litigation or governmental proceedings arising from such matters.

If we fail to manage effectively our ASI subsidiary, our sales and profitability of AMHS could be adversely affected and the sales mix between AMHS and our other products could affect our overall financial performance.

Net sales of AMHS accounted for approximately 64 percent and 62 percent of our net sales for the years ended March 31, 2006 and 2005, respectively, and is expected to be an important component of our future sales. Substantially all of our AMHS sales are through our majority-owned subsidiary, ASI, of which we acquired 51.0 percent in the third quarter of fiscal year 2003 and increased our holdings to 95.1% during the second quarter of fiscal year 2007.

Orders for AMHS are relatively large, often exceeding $20.0 million for a given project or for an extension of a project. Because of the size of these orders, our revenues are often concentrated among a small number of customers in any fiscal period. Additionally, the manufacturing and the installation of these systems at our customers’ facilities can take up to six months or longer.

Accordingly, we recognize revenue and costs for AMHS based on percentage-of-completion analysis because the contracts are long-term in nature. Payments under these contracts often occur well after we incur our manufacturing costs. For example, terms for some of our Japanese AMHS customers typically require payment to be made six months after customer acceptance and in some cases longer. The consequence of the AMHS payment cycle is that significant demands can be placed on our working capital, prior to our receipt of customer payments. Our ability to fund working capital requirements at ASI through available cash may be dependent on the timing of customer payments and our ability to collect outstanding receivables. In addition, our ability to raise working capital at ASI, through short-term borrowing, inter-company transfers or other means, may be limited by covenants and other restrictions under our various credit facilities. Accordingly, our overall financial performance will therefore be affected by the sales mix between AMHS and other products and our ability to effectively manage AMHS projects and working capital requirements and means in a given period.

We conduct our business under various types of contractual arrangements. These include fixed-price contracts, in which contract prices are established in part on cost and scheduling estimates. These estimates are based on a number of assumptions, including assumptions about future economic conditions, prices and availability of labor,

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equipment and materials, and other cost factors. These estimates are inherently difficult to make accurately and while we use our best judgment to estimate total costs, such estimates could be higher or lower than actual project costs, and could result in gross margins and profitability that are higher or lower than we estimate. If an estimate for a project proves inaccurate, or if circumstances change, cost overruns may occur, and we could experience reduced gross margins and profits for that project. Similarly, actual costs may be less than estimated, which could result in increased gross margins and profits for that project. Favorable or unfavorable changes to gross margins and profits in one quarter as a result of our inability to estimate our costs accurately are not necessarily indicative of future trends with respect to our gross margins or profits.

If we are unable to increase our sales of AMHS to FPD manufacturers, or if the FPD industry enters a cyclical downturn, our growth prospects could be negatively affected.

ASI sells AMHS to FPD manufacturers.  While we believe sales to the FPD industry represents a significant opportunity for growth, the size of this market opportunity depends in large part on capital expenditures by FPD manufacturers. The market for FPD products is highly cyclical and has experienced periods of oversupply, resulting in unpredictable demand for manufacturing and automation equipment. If the FPD market enters into a cyclical downturn, demand for AMHS by the FPD market may be significantly reduced, impacting our growth prospects, sales and gross margins in this market. In addition, competition may limit our ability to achieve and maintain relative pricing and gross margin performance consistent with our objectives or past performance, and this could affect our ability to remain profitable.

As a relatively new entrant to the FPD equipment market, we do not have the customer relationships some of our competitors have. Similarly, our relative inexperience in the FPD industry may cause us to misjudge important trends and dynamics in this market. If we are unable to anticipate future customer needs in the FPD market, our growth prospects may be adversely affected.

Our gross margins on 300mm products may be lower, which could adversely affect our ability to remain profitable.

The gross margins on our 300mm products face increased pressure and we sell a greater percentage of our non AMHS 300mm products to OEMs rather than directly to semiconductor manufacturers. Manufacturing costs are generally higher in the early stages of new product introduction and typically decrease as demand increases, due to better economies of scale and efficiencies developed in the manufacturing processes. We cannot, however, be assured that we will see such economies of scale and efficiencies in our future manufacturing of 300mm products, which will be supplied primarily by contract manufacturers for our Fab Automation Products. SEMI standards for 300mm products have enabled more suppliers to enter our markets, thereby increasing competition and creating further pricing pressures. Sales to OEMs typically have lower gross margins. These factors may prevent us from achieving or maintaining similar relative pricing and gross margin performance on 300mm products as we have achieved on other products and could adversely affect our ability to remain profitable.

Most of our Fab Automation Product manufacturing is outsourced and we rely on a single contract manufacturer for much of this manufacturing, which could disrupt the availability of our Fab Automation Products and adversely affect our gross margins.

We have outsourced the manufacturing of nearly all of our Fab Automation Products. Solectron currently manufactures, under a long-term contract, our products, other than AMHS and our robotics products. ASI also subcontracts a significant portion of its AMHS manufacturing to third parties. In the future, we may increase our dependence on contract manufacturers. Outsourcing may not continue to yield the benefits we expect, and instead could result in increased product costs, inability to meet customer demand or product delivery delays.

Outsourced manufacturing could create disruptions in the availability of our products if the timeliness or quality of products delivered does not meet our requirements or our customers’ expectations. From time to time, we have experienced delays in receiving products from Solectron. Problems with quality or timeliness could be caused by a number of factors including, but not limited to: manufacturing process flow issues, financial viability of an outsourced vendor or its supplier, availability of raw materials or components to the outsourced vendor, improper

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product specifications, or the learning curve to commence manufacturing at a new outsourced site. Our contract with Solectron contains minimum purchase commitments which, if not met, could result in increased costs, which would adversely affect our gross margins. We must also provide Solectron with forecasts and targets based on actual and anticipated demand, which we may not be able to do effectively or efficiently. If Solectron purchases inventory based on our forecasts, and that inventory is not used, we must repurchase the unused inventory, which would adversely affect both our cash flows and gross margins. If product supply is adversely affected because of problems in outsourcing, we may lose sales and profits.

Our outsourcing agreement with Solectron includes commitments from Solectron to adjust, up or down, manufacturing volume based on updates to our forecast demand. Solectron may be unable to meet these commitments however and, even if it can, may be unable to react efficiently to rapid fluctuations in demand. If our agreement with Solectron terminates, or if Solectron does not perform its obligations under our agreement, it could take several months to establish alternative manufacturing for these products and we may not be able to fulfill our customers’ orders for some or most of our products in a timely manner. If our agreement with Solectron terminates, we may be unable to find another suitable outsource manufacturer and may be unable to perform the manufacturing of these products ourselves.

Any delays in meeting customer demand or quality problems resulting from product manufactured at an outsourced location such as Solectron could result in lost or reduced future sales to customers and could have a material negative impact on our net sales, gross profits and results of operations.

Shortages of components necessary for product assembly by Solectron or us can delay shipments to our customers and can lead to increased costs, which may negatively impact our financial results.

When demand for semiconductor manufacturing equipment is strong, suppliers, both U.S. and international, strain to provide components on a timely basis. We have outsourced the manufacturing of many of our products, and disruption or termination of supply sources to our contract manufacturers could have a serious adverse effect on our operations. Many of the components and subassemblies used in our products are obtained from a limited group of suppliers, or in some cases may come from a single supplier. A prolonged inability to obtain some components could have an adverse effect on our operating results and could result in damage to our customer relationships. Shortages of components may also result in price increases for components and, as a result, could decrease our margins and negatively impact our financial results.

We may have additional tax liabilities that could be materially higher than we expect.

The calculation of tax liabilities involves uncertainties in the application of complex global tax regulations. We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. In the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain.

We recognize potential liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on estimates of whether, and the extent to which, additional taxes will be due. We may be audited in the future by tax authorities in the United States and foreign jurisdictions to determine whether or not we owe additional taxes. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from what is reflected in our historical tax provision and accruals. The actual outcome of audits of our tax returns and related litigation, if any, could have a material adverse effect on our financial condition and results of operations. If our previous estimate of tax liabilities proves to be less than the ultimate assessment, a charge to expense would result.

Because we do not have long-term contracts with our customers, our customers may cease purchasing our products at any time.

We do not have long-term contracts with our customers, and our sales are typically made pursuant to individual purchase orders. Accordingly:

•  our customers can cease purchasing our products at any time, without penalty;

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•  our customers are free to purchase products from our competitors;

•  we are exposed to competitive price pressure on each order;

•  our customers are not required to make minimum purchases; and

•  our customers may reschedule or cancel existing orders, and we may not be able to recover the costs we have incurred to manufacture that product from the customer.

Customer orders are often received with extremely short lead times. If we are unable to fulfill these orders in a timely manner, we could lose sales and customers.

We depend on large purchases from a few significant customers, and any loss, cancellation, reduction or delay in purchases by, or failure to collect receivables from these customers could harm our business.

The markets in which we sell our products comprise a relatively small number of OEMs, semiconductor manufacturers and FPD manufacturers. Large orders from a relatively small number of customers account for a significant portion of our revenue and make our relationship with each customer critical to our business. The sales cycle to a new customer can last up to twelve months or more from initial inquiry to placement of an order, depending on the complexity of the project. These extended sales cycles make the timing of customer orders uneven and difficult to predict. With reference to sales to fab customers, a significant portion of the net sales in any quarter is typically derived from a small number of long-term, multi-million dollar customer projects involving upgrades of existing facilities or the construction of new facilities. In the case of sales to OEMs, these orders, either large or small in size are typically received with very short lead times. If we are not able to meet these short customer delivery requirements, we could potentially lose the order. Our customers normally provide forecasts of their demand and in many cases, the Company will incur costs to be able to fulfill customers’ forecasted demand, however there can be no assurances that the customers’ forecast will be accurate and it may not lead to a subsequent order. Generally, our customers may cancel or reschedule shipments with limited or no penalty.

If we are unable to develop and introduce new products and technologies in a timely manner, our business could be negatively affected.

Semiconductor equipment and processes are subject to rapid technological changes. The development of more complex semiconductors has driven the need for new facilities, equipment and processes to produce these devices at an acceptable cost. We believe that our future success will depend in part upon our ability to continue to enhance our existing products to meet customer needs and to develop and introduce new products in a timely manner. We often require long lead times for development of our products, which requires us to expend significant management effort and to incur material development costs and other expenses. During development periods we may not realize corresponding revenue in the same period, or at all. We may not succeed with our product development efforts and we may not respond effectively to technological change, which could have a negative impact on our financial condition and results of operations. The impact could include charges to operating expense, cost overruns on large projects or the loss of future revenue opportunities.

We may be unable to protect our intellectual property rights and we may become involved in litigation concerning the intellectual property rights of others.

We rely on a combination of patent, trade secret and copyright protection to establish and protect our intellectual property. While we intend to take reasonable steps to protect our patent rights, the filing process is time-consuming and we cannot assure you that we will be able to file timely our patents and other intellectual property rights. In addition, we cannot assure you our patents and other intellectual property rights will not be challenged, invalidated or voided, or that the rights granted there under will provide us with competitive advantages. We also rely on trade secrets that we seek to protect, in part, through confidentiality agreements with employees, consultants and other parties. These agreements may be breached, we may not have adequate remedies for any breach, or our trade secrets may otherwise become known to, or independently developed by, others. In addition, enforcement of our rights could impose significant expense and result in an uncertain or non-cost-effective determination or confirmation of our rights.

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Intellectual property rights are uncertain and involve complex legal and factual questions. We may infringe the intellectual property rights of others, which could result in significant liability for us. If we do infringe the intellectual property rights of others, we could be forced to either seek a license to intellectual property rights of others or to alter our products so that they no longer infringe the intellectual property rights of others. A license could be very expensive to obtain or may not be available at all. Similarly, changing our products or processes to avoid infringing the rights of others may be costly or impractical, could detract from the value of our products, or could delay our ability to meet customer demands or opportunities.

There has been substantial litigation regarding patent and other intellectual property rights in semiconductor-related industries. Litigation may be necessary to enforce our patents, to protect our trade secrets or know-how, to defend us against claimed infringement of the rights of others, or to determine the scope and validity of the patents or intellectual property rights of others. Any litigation could result in substantial cost to us and divert the attention of our management, which by itself could have an adverse material effect on our financial condition and operating results. Further, adverse determinations in any litigation could result in our loss of intellectual property rights, subject us to significant liabilities to third parties, and require us to seek licenses from third parties, or prevent us from manufacturing or selling our products. Any of these effects could have a negative impact on our financial condition and results of operations.

The intellectual property laws in Asia do not protect our intellectual property rights to the same extent as do the laws of the United States. It may be necessary for us to participate in proceedings to determine the validity of our or our competitors’, intellectual property rights in Asia, which could result in substantial cost and divert our efforts and attention from other aspects of our business. If we are unable to defend our intellectual property rights in Asia, our future business, operating results and financial condition could be adversely affected.

We may not be able to integrate efficiently the operations of our acquisitions, and may incur substantial losses in the divestiture of assets or operations.

We have made and may continue to make additional acquisitions of or significant investments in, businesses that offer complementary products, services, technologies or market access. If we are to realize the anticipated benefits of past and future acquisitions or investments, the operations of these companies must be integrated and combined efficiently with our own. The process of integrating supply and distribution channels, computer and accounting systems, and other aspects of operations, while managing a larger entity, will continue to present a significant challenge to our management. In addition, it is not certain that we will be able to incorporate different financial and reporting controls, processes, systems and technologies into our existing business environment. The difficulties of integration may increase because of the necessity of combining personnel with varied business backgrounds and combining different corporate cultures and objectives. We may incur substantial costs associated with these activities and we may suffer other material adverse effects from these integration efforts which could materially reduce our earnings, even over the long-term. We may not succeed with the integration process and we may not fully realize the anticipated benefits of the business combinations, or we could decide to divest or discontinue existing or recently acquired assets or operations.

As our quarterly and yearly operating results are subject to variability, comparisons between periods may not be meaningful; this variability in our results could cause our stock price to decline.

Our revenues and operating results can fluctuate substantially from quarter to quarter and year to year, depending on factors such as:

•  general trends in the overall economy, electronics industry and semiconductor and FPD manufacturing industries;

•  fluctuations in the semiconductor and FPD equipment markets;

•  changes in customer buying patterns;

•  the degree of competition we face;

•  pricing pressures causing lower gross margins or lost orders;

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•  the size, timing and product mix of customer orders;

•  lost sales due to any failure in the outsourcing of our manufacturing;

•  the availability of key components;

•  the timing of product shipment and acceptance, which are factors in determining when we recognize revenue; and

•  the timely introduction and acceptance of new products.

These and other factors increase the risk of unplanned fluctuations in our net sales. A shortfall in net sales in a quarter or a fiscal year as a result of these and other factors could negatively impact our operating results for that period. Given these factors, we expect quarter-to-quarter and year-to-year performance to fluctuate for the foreseeable future. As a result, period-to-period comparisons of our performance may not be meaningful, and you should not rely on them as an indication of our future performance. In one or more future periods, our operating results may be below the expectations of public market analysts and investors, which may cause our stock price to decline.

We face significant economic and regulatory risks because a majority of our net sales are derived from outside the United States.

A significant portion of our net sales is attributable to sales outside the United States, primarily in Taiwan, Japan, China, Korea, Singapore and Europe. International sales were approximately 81 percent, 82 percent and 79 percent for fiscal years 2006, 2005 and 2004, respectively. We expect that international sales, particularly to Asia, will continue to represent a significant portion of our total revenue in the future. Concentration in sales to customers outside the United States increases our exposure to various risks, including:

•  exposure to currency fluctuations;

•  the imposition of governmental controls;

•  the laws of certain foreign countries may not protect our intellectual property to the same extent as do the laws of the United States;

•  the need to comply with a wide variety of foreign and U.S. export laws;

•  political and economic instability;

•  terrorism and anti-American sentiment;

•  trade restrictions;

•  slowing economic growth and availability of investment capital and credit;

•  changes in tariffs and taxes;

•  longer product acceptance and payment cycles;

•  the greater difficulty in administering business overseas; and

•  inability to enforce payment obligations or recourse to legal protections accorded creditors to the same extent within the U.S.

Any kind of economic instability in parts of Asia where we do business can have a severe negative impact on our operating results, due to the large concentration of our sales activities in this region.

Although we invoice a significant portion of our international sales in United States dollars, we invoice our sales in Japan in Japanese yen. Future changes in the exchange rate of the U.S. dollar to the Japanese yen may adversely affect our future results of operations. We have not engaged in active currency hedging transactions; however, we are commencing a limited hedging program in the first quarter of fiscal year 2007. Nonetheless, as we expand our international operations, we may allow payment in additional foreign currencies and our exposure to losses due to foreign currency transactions may increase. Moreover, the costs of doing business abroad may increase

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as a result of adverse exchange rate fluctuations. For example, if the United States dollar declined in value relative to a local currency, we could be required to pay more for our expenditures in that market, including salaries, commissions, local operations and marketing expenses, each of which is paid in local currency. In addition, we may lose customers if exchange rate fluctuations, currency devaluations or economic crises increase the local currency price of our products and manufacturing costs or reduce our customers’ ability to purchase our products.

Asian and European courts might not enforce judgments rendered in the United States. There is doubt as to the enforceability in Asia and Europe of judgments obtained in any federal or state court in the United States in civil and commercial matters. The United States does not currently have a treaty with many Asian and European countries providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. Therefore, a final judgment for the payment of a fixed debt or sum of money rendered by any federal or state court in the United States would not automatically be enforceable in many European and Asian countries.

Our current and planned operations may strain our resources and increase our operating expenses.

We may expand our operations through both internal growth and acquisitions. We expect this expansion will strain our systems and operational and financial controls. In addition, we may incur higher operating costs and be required to increase substantially our working capital to fund operations as a result of such an expansion. In addition, during an expansion, we may incur significantly increased up-front costs of sale and product development well in advance of receiving revenue for such product sales. To manage our growth effectively, we must continue to improve and expand our systems and controls. If we fail to do so, our growth will be limited and our liquidity and ability to fund our operations could be significantly strained.

Further, consideration for future acquisitions could be in the form of cash, common stock, rights to purchase stock, debt or a combination thereof. Dilution to existing shareholders, and to earnings per share, may result if shares of our common stock, other rights to purchase common stock or debt are issued in connection with any future acquisitions.

We have continued to experience unexpected turnover in our finance department, and this has had an adverse impact on our business; if we lose any of our key personnel or are unable to attract, train or retain qualified personnel, our business would be further harmed.

Our chief financial officer gave notice of resignation in May 2006. Our controller and at the time acting principal accounting officer gave notice of resignation in September 2006. In addition our chief operating officer also gave notice of resignation in May 2006. We did not receive any notice to the effect that any of these resignations was triggered by or related to past option grants or practices.

The resignation of the two finance officers contributed in part to the delay (described elsewhere in this report) in preparing and filing this report on Form 10-K and the Form 10-Q for the fiscal quarter ended June 30, 2006. We have not been able in the months following May 2006 to recruit successfully a permanent successor to our chief financial officer. We therefore retained outside financial consulting assistance in connection with the analysis of the financial impact of past incorrect measurement dates for certain stock option grants described in this report, which added to the operating expenses incurred in connection with the delayed filings and further contributed to the delay in preparing and filing the SEC reports. We also recently retained Richard H. Janney to serve as our interim chief financial officer and interim principal accounting officer.

In the past 5 years, we have had significant turnover in the chief financial officer, controller and other key positions in our headquarters finance department, and in certain key finance positions at ASI in Japan. If we are not able to attract and retain qualified finance executives and employees at appropriate positions in our consolidated operations, we face a significant risk of further material weaknesses in internal control over financial reporting, and direct and indirect consequences of these weaknesses, including but not limited to delayed filings of our SEC reports, potential defaults under our debt obligations, risk of de-listing from the NASDAQ Global Market, significant operating expenses incurred to hire outside assistance to compensate for the lack of qualified personnel, and litigation and governmental investigations.

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As a general matter, our future success depends, in large part, on the continued contributions of our senior management and other key personnel, many of whom are highly skilled and would be difficult to replace. None of our senior management, key technical personnel or key sales personnel is bound by written employment contracts to remain with us for a specified period. In addition, we do not currently maintain key person life insurance covering our key personnel. The loss of any of our senior management or key personnel could harm our business.

Our future success also depends on our ability to attract, train and retain highly skilled managerial, engineering, sales, marketing, legal and finance personnel, and on the abilities of new personnel to function effectively, both individually and as a group. Competition for qualified senior employees can be intense. If we fail to do this, our business could be harmed.

Risks Related to our Industry

The semiconductor manufacturing equipment industry is highly cyclical and is affected by recurring downturns in the semiconductor industry, and these cycles can harm our operating results.

Our business largely depends upon the capital expenditures of semiconductor manufacturers. Semiconductor manufacturers are dependent on the then-current and anticipated market demand for semiconductors. The semiconductor industry is cyclical and has historically experienced periodic downturns. These periodic downturns, whether the result of general economic changes or decreases in demand for semiconductors, are difficult to predict and often have a severe adverse effect on the semiconductor industry’s demand for semiconductor manufacturing equipment. Sales of equipment to semiconductor manufacturers may be significantly more cyclical than sales of semiconductors, as the large capital expenditures required for building new fabs or facilitating existing fabs is often delayed until semiconductor manufacturers are confident about increases in future demand. If demand for semiconductor equipment remains depressed for an extended period, it will seriously harm our business.

As a result of substantial cost reductions in response to the decrease in net sales and uncertainty over the timing and extent of any industry recovery, we may be unable to make the investments in marketing, research and development, and engineering that are necessary to maintain our competitive position, which could seriously harm our long-term business prospects.

We believe that the cyclical nature of the semiconductor and semiconductor manufacturing equipment industries will continue, leading to periodic industry downturns, which may seriously harm our business and financial position.

We may not effectively compete in a highly competitive semiconductor manufacturing equipment industry.

The markets for our products are highly competitive and subject to rapid technological change. We currently face direct competition with respect to all of our products. A number of competitors may have greater name recognition, more extensive engineering, research & development, manufacturing, and marketing capabilities, access to lower cost components or manufacturing, and substantially greater financial, technical and personnel resources than those available to us.

Brooks and TDK are our primary competitors in the area of loadports. Our SMART-Traveler System products face competition from Brooks and Omron. We also compete with several companies in the robotics area, including, but not limited to, Brooks, Rorze and Yasukawa-Super Mecatronics Division. In the area of AMHS, we face competition primarily from Daifuku Co., Ltd. and Murata Co., Ltd. Our wafer sorters compete primarily with products from Recif, Inc. and Rorze. We also face competition for our software products from Cimetrix and Brooks. In addition, the industry transition to 300mm wafers is likely to draw new competitors to the fab automation and AMHS markets. In the 300mm wafer market, we expect to face intense competition from a number of established automation companies, as well as new competition from semiconductor equipment companies.

We expect that our competitors will continue to develop new products in direct competition with our systems, improve the design and performance of their products and introduce new products with enhanced performance characteristics, and existing products at lower costs. To remain competitive, we need to continue to improve and expand our product line, which will require us to maintain a high level of investment in research and development.

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Ultimately, we may not be able to make the technological advances and investments necessary to remain competitive.

Companies in the semiconductor capital equipment industry face continued pressure to reduce costs. Pricing actions by our competitors may require us to make significant price reductions to avoid losing orders.

Item 1B — Unresolved Staff Comments

Not applicable

Item 2 — Properties

We are headquartered in Fremont, California and maintain the following facilities:

		Square
		Footage
Location	Functions	(Approximate)		Lease Expiration	Facilities by Segments
Fremont, California	Corporate headquarters		95,000	March 2013	Fab Automation/AMHS
Fremont, California	Repair and maintenance		35,000	February 2008	Fab Automation/AMHS
Andover, Massachusetts	Sales and support		5,000	April 2009	Fab Automation
Richardson, Texas	Sales and support		2,000	May 2009	Fab Automation
Austin, Texas	Sales and support, R&D		3,000	June 2008	Fab Automation
Nagoya, Japan	Administration, manufacturing, R&D		65,000	Owned	Fab Automation/AMHS
Nagoya, Japan	Administration, manufacturing		7,000	December 2008	Fab Automation
Nagoya, Japan	Warehouse		7,000	March 2008	Fab Automation
Hsin-Chu City, Taiwan	Administration, sales and support		7,000	May 2007	Fab Automation/AMHS
Genting, Singapore	Sales and support		2,000	September 2008	Fab Automation
Ise, Japan	Administration, manufacturing, R&D		176,000	June 2011	AMHS
Tokyo, Japan	Sales and support		4,000	May 2008	AMHS

The facilities listed above are structurally sound and well maintained and are adequate for our needs for the foreseeable future.

Item 3 — Legal Proceedings

On October 28, 1996, we filed suit in the United States District Court for the Northern District of California against Empak, Inc., Emtrak, Inc., Jenoptik AG, and Jenoptik Infab, Inc., alleging, among other things, that certain products of these defendants infringe our United States Patents Nos. 5,097,421 (“the ‘421 patent”) and 4,974,166 (“the ‘166 patent”). Defendants filed answers and counterclaims asserting various defenses, and the issues subsequently were narrowed by the parties’ respective dismissals of various claims, and the dismissal of defendant Empak pursuant to a settlement agreement. The remaining patent infringement claims against the remaining parties proceeded to summary judgment, which was entered against us on June 8, 1999. We thereafter took an appeal to the United States Court of Appeals for the Federal Circuit. On October 10, 2001, the Federal Circuit issued a written opinion, Asyst Technologies, Inc. v. Empak, 268 F.3d 1365 (Fed. Cir. 2001), reversing in part and affirming in part the decision of the trial court to narrow the factual basis for a potential finding of infringement, and remanding the matter to the trial court for further proceedings. The case was subsequently narrowed to the ‘421 patent, and we sought monetary damages for defendants’ infringement, equitable relief, and an award of attorneys’ fees. On October 9, 2003, the court: (i) granted defendants’ motion for summary judgment to the effect that the defendants had not infringed our patent claims at issue and (ii) directed that judgment be entered for defendants. We thereafter took a second appeal to the United States Court of Appeals for the Federal Circuit. On March 22, 2005, the Federal Circuit issued a second written opinion, Asyst Technologies, Inc. v. Empak, 402 F.3d 1188 (Fed. Cir. 2005), reversing in part and affirming in part the decision of the trial court to narrow the factual basis for a potential finding of infringement, and remanding the matter to the trial court for further proceedings.

Following remand, the Company filed a motion for summary judgment that defendants infringe several claims of the ’421 patent, and defendants filed a cross-motion seeking a determination of non-infringement. On March 31,

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2006, the Court entered an order granting in part, and denying in part, the Company’s motion for summary judgment and at the same time denied defendants’ cross motion for summary judgment. The Court found as a matter of law that defendants’ IridNet system infringed the ’421 Patent under 35 U.S.C. § 271(a), but denied without prejudice that portion of the motion regarding whether defendants’ foreign sales infringed under 35 U.S.C. §271(f). At a case management conference held June 23, 2006, the Court set a trial date of December 1, 2006. In the interim, the defendants continue to assert certain defenses, and are seeking a reexamination by the Patent and Trademark Office of the claims in suit. A reexamination could significantly narrow or invalidate our patents in suit, or significantly narrow or preclude entirely damages recoverable by us in this action. We intend to continue to prosecute the matter before the trial court, seeking monetary damages for defendants’ infringement, equitable relief, and an award of attorneys’ fees.

On August 29, 2005, a suit was filed in the Osaka District Court, Japan, against Shinko and ASI. The suit, filed by Auckland UniServices Limited and Daifuku Corporation (“Plaintiffs”), alleges, among other things, that certain Shinko and ASI products infringe Japanese Patent No. 3304677 (the “ ‘677 Patent”), and seeks monetary damages against both Shinko and ASI in an amount to be determined. The suit alleges infringement of the ‘677 Patent by elements of identified Shinko products and of ASI’s Over-head Shuttle and Over-head Hoist Transport products. ASI has asserted various defenses, including non-infringement of the asserted claims under the ‘677 Patent, and intends to defend the matter vigorously. ASI is also consulting with Shinko concerning issues relating to a mutual defense of the claims.

As noted earlier, the Company received a letter dated June 7, 2006, from the SEC requesting that Asyst voluntarily produce documents relating to stock options granted from January 1, 1997 to the present. The Company is cooperating in the SEC’s inquiry. On June 26, 2006, the Company received a grand jury subpoena of the same date from the United States District Court for the Northern District of California, requesting the production of documents relating to the Company’s past stock option grants and practices for the period from 1995 to the present. The Company intends to cooperate fully with the U.S. Attorney’s office and is responding to this subpoena. Due to the inherent uncertainties involved with such investigations, the Company cannot accurately predict the ultimate outcome of these governmental inquiries.

In addition, certain of the current and former directors and officers of the Company have been named as defendants in two consolidated shareholder derivative actions filed in the United States District Court of California, captioned In re Asyst Technologies, Inc. Derivative Litigation (N.D. Cal.) (the “Federal Action”), and one similar shareholder derivative action filed in California state court, captioned Forlenzo v. Schwartz, et al. (Alameda County Superior Court) (the “State Action”). Plaintiffs in the Federal and State Actions allege that certain of the current and former defendant directors and officers backdated stock option grants beginning in 1995. Both Actions assert causes of action for breach of fiduciary duty, unjust enrichment, corporate waste, abuse of control, gross mismanagement, accounting, rescission and violations of Section 25402 et. seq.  of the California Corporations Code. The Federal Action also alleges that certain of the current and former defendant directors and officers breached their fiduciary duty by allegedly violating Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated there under, Section 14(a) of the Exchange Act and Rule 14a-9 promulgated there under, and Section 20(a) of the Exchange Act. Both Actions seek to recover unspecified monetary damages, disgorgement of profits and benefits, equitable and injunctive relief, and attorneys’ fees and costs. The State Action also seeks the imposition of a constructive trust on all proceeds derived from the exercise of allegedly improper stock option grants. The Company is named as a nominal defendant in both the Federal and State Actions; thus, no recovery against the Company is sought. The Company has engaged outside counsel to represent it in the government inquiries and pending lawsuits.

From time to time, we are also involved in other legal actions arising in the ordinary course of business. Litigation is inherently unpredictable, and we cannot predict the outcome of the legal proceedings described above with any certainty. Should there be an adverse judgment against us, it may have a material adverse impact on our financial statements. Because of uncertainties related to both the amount and range of losses in the event of an unfavorable outcome in the lawsuits listed above or in certain other pending proceedings for which loss estimates have not been recorded, we are unable to make a reasonable estimate of the losses that could result from these matters and hence have recorded no accrual in our financial statements as of March 31, 2006.

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Item 4 — Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth quarter.

PART II

Item 5 — Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

NASDAQ de-listing hearing

On June 30, 2006, the Company received a letter from the NASDAQ Listing Qualifications Department indicating that, because of the Company’s previously announced delay in timely filing its Annual Report on Form 10-K for its fiscal year ended March 31, 2006, the Company is not in compliance with the filing requirements for continued listing on NASDAQ as set forth in NASDAQ Marketplace Rule 4310(c) (14).

The Company received a second letter from the NASDAQ Listing Qualifications Department dated August 14, 2006, indicating that the Company was not in compliance with the filing requirements for continued listing on the NASDAQ Global Market as set forth in NASDAQ Marketplace Rule 4310(c) (14). This second notice was caused by the Company’s delay in filing its quarterly report on Form 10-Q for its quarter ended June 30, 2006.

As a result, the Company’s common shares are subject to delisting from the NASDAQ Global Market.

On September 26, 2006, the Company disclosed on Form 8-K that it had received a letter dated September 21, 2006, from the NASDAQ Listing Qualifications Hearings department stating that a NASDAQ Listing Qualifications Panel has determined to continue the listing of Asyst’s common stock on the NASDAQ Global Market, subject to the conditions that:

•  On or before September 27, 2006, the Company submits supplemental information outlined in the letter concerning the previously announced Special Committee investigation into stock option grants and practices; and

•  On or before November 30, 2006, the Company files its Form 10-K for the fiscal year ended March 31, 2006, its Form 10-Q for the quarter ended June 30, 2006, and all required restatements (if any).

On September 27, 2006, Asyst submitted to NASDAQ the supplemental information requested from the Company.

Price Range of Common Stock

Our common stock is traded on the NASDAQ Global Market under the symbol “ASYT.” The price per share reflected in the following table represents the range of high and low sales prices for our common stock as reported on the NASDAQ Global Market for the periods indicated. Prior to July 1, 2006, this market was called the NASDAQ National Market.

	High		Low
Fiscal year ended March 31, 2005
First quarter	$	10.51	$	6.30
Second quarter	$	10.45	$	4.15
Third quarter	$	5.68	$	3.68
Fourth quarter	$	5.34	$	3.93
Fiscal year ended March 31, 2006
First quarter	$	4.89	$	3.12
Second quarter	$	5.49	$	4.41
Third quarter	$	6.53	$	3.84
Fourth quarter	$	11.20	$	5.55

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Approximate Number of Equity Security Holders

There were approximately 281 holders on record of our common stock as of September 30, 2006.

Dividends

We have not paid any cash dividends since our inception and do not anticipate paying cash dividends in the foreseeable future.

Issuer Purchases of Equity Securities

We have not purchased any of our equity securities during the quarter or fiscal year ended March 31, 2006.

Item 6 — Selected Financial Data

Fiscal Year-end Dates

Effective as of February 18, 2005, we changed our fiscal year-end date from the last Saturday in March to March 31. Accordingly, fiscal years 2005 and 2006 ended on March 31, 2005 and 2006, respectively, and fiscal year 2004 ended on March 27, 2004. For convenience of presentation and comparison to current and prior fiscal years ended March 31, we refer throughout this report to the fiscal year ended March 31, 2004. However, all references to our fiscal year ended March 31, 2004 mean our actual fiscal year ended March 27, 2004.

Selected Consolidated Financial Data

As detailed in Note 2 in Notes to the Consolidated Financial Statements in Item 8 below, and elsewhere in this report, the Company is restating its consolidated financial statements for the years ended March 31, 2005 and 2004, as well as the selected financial data for the years ended March 31, 2003 and 2002. The restatement is to record additional non-cash stock-based compensation expense resulting from stock options granted during fiscal years 1995 to 2004 that were incorrectly accounted for under GAAP. Accordingly, all prior financial statements and related communications for the period from January 1, 1995 through the fiscal year ended March 31, 2001 should not be relied upon.

We acquired companies in fiscal years 2004, 2003 and 2002 and our implementation of SAB No. 101, SFAS No. 142 and SFAS No. 144 has impacted the year-over-year comparability of the selected financial data. The following tables reflect selected consolidated financial data: the data reflected for fiscal years 2003 and 2002 is unaudited.

	March 31,
	2006		2005		2004		2003		2002
			(As restated)		(As restated)		(As restated)		(As restated)
	(in thousands)
Consolidated Balance Sheet Data
Cash and cash equivalents and short-term investments	$	109,926	$	101,180	$	117,860	$	96,214	$	79,577
Total assets		415,294		483,774		472,864		395,225		352,160
Long-term debt and capital leases, net of current portion		87,168		88,750		91,074		114,812		90,331
Shareholders’ equity		87,679		89,717		102,252		62,622		167,185

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	Fiscal Year Ended March 31,
	2006			2005			2004			2003			2002
				(As restated)			(As restated)			(As restated)			(As restated)
	(In thousands, except per share data)
Consolidated Statements of Operations Data:
Net sales	$	459,221		$	612,987		$	301,642		$	259,495		$	183,234
Gross profit		161,246			122,215			53,370			74,637			40,463
In-process research and development of acquired businesses		—			—			—			7,832			2,000
Income (loss) from operations		32,286			(17,829	)		(86,489	)		(86,581	)		(136,123	)
Gain on sale of wafer and reticle carrier product line		—			—			—			28,420			—
Loss from continuing operations before discontinued operations and cumulative effect of a change in accounting principle		(104	)		(17,743	)		(82,616	)		(122,607	)		(99,937	)
Discontinued operations, net of income tax		—			—			—			(21,096	)		(51,403	)
Net loss		(104	)		(17,743	)		(82,616	)		(143,703	)		(151,340	)
Net loss per share from continuing operations before discontinued operations and cumulative effect accounting of a change in principle:
Basic and diluted	$	(0.00	)	$	(0.37	)	$	(1.98	)	$	(3.27	)	$	(2.85	)
Discontinued operations, net of income taxes	$	—		$	—		$	—		$	(0.56	)	$	(1.45	)
Shares used in earnings per share calculation:
Basic and diluted		47,972			47,441			41,805			37,489			35,373

Comparability of annual data is affected by the following items which occurred during fiscal years 2006, 2005, 2004, 2003, and 2002:

Stock-based compensation and related payroll tax expenses (benefits) of $0.3 million, $0.2 million, $(0.8) million, $3.0 million and $4.0 million were recorded in cost of sales and other operating expenses in fiscal years 2006, 2005, 2004, 2003 and 2002, respectively.

These charges resulted from the investigation which began in June 2006, relating to the dating of stock option awards granted from fiscal year 1995 through fiscal year 2006. In addition, an income tax benefit of $1.6 million in fiscal year 2002 and an income tax expense of $4.9 million in fiscal year 2003 also resulted from the stock-based compensation expenses recorded after the investigation. The increase (decrease) in net loss per share, relating to stock-based compensation charges resulting from the investigation, net of related payroll and income taxes was $0.01 per share, $0.00 per share, $(0.08) per share, $0.21 per share and $0.07 per share in fiscal years 2006, 2005, 2004, 2003 and 2002, respectively.

Total assets at March 31, 2002 were restated to reflect a deferred tax asset of $7.8 million, relating to the stock compensation and payroll tax charges arising from the investigation.

Shareholders’ equity at March 31, 2002, 2003, 2004 and 2005 was restated to reflect the impact of adjustments of $2.2 million, $5.4 million, $0.9 million and $0.2 million, respectively, relating primarily to deferred tax assets, accrued payroll taxes and stock compensation charges.

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Asset impairment charges of $4.6 million, $6.9 million, $15.5 million and $40.5 million were recorded in fiscal years 2005, 2004, 2003 and 2002, respectively. These charges relate to write-downs in the value of goodwill, intangibles and land held for sale.

A reserve for net deferred tax assets of $67.6 million was recorded in fiscal year 2003.

Loss contract accruals of $1.3 million and $7.3 million were recorded at ASI in fiscal years 2005 and 2004, respectively. Loss reserves and loss on sale of the AMP and SemiFab subsidiaries of $6.6 million and $5.9 million, respectively, were recorded in fiscal year 2003.

Restructuring and other charges of $1.8 million, $6.6 million, $7.0 million and $8.2 million were recorded in fiscal years 2005, 2004, 2003 and 2002, respectively. These charges were primarily for severance, excess facility and asset impairment charges related to workforce reductions and consolidation of our facilities.

We have not paid any cash dividends since our inception and do not anticipate paying cash dividends in the foreseeable future on our common stock.

Refer to the consolidated financial statements contained in this Form 10-K for further disclosure of the above items.

Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements, which involve risk and uncertainties. Our actual results could differ materially from those anticipated in the forward looking statements as a result of certain factors, including but not limited to those discussed in “Item 1A Risk Factors” and elsewhere in this Annual Report.

Our Past Stock Option Grant Practices, and Need to Restate our Financial Statements

We delayed the filing of this Form 10-K, pending completion of a previously announced independent investigation into our past stock option grant practices, being conducted by a Special Committee of our Board of Directors. Due to this delay and review, we have experienced substantial additional risks and costs.

The Special Committee’s investigation was completed on September 28, 2006, with the delivery of the Committee’s final report on that date. The investigation covered option grants made to all employees, directors and consultants during the period from January 1995 through June 2006. A key purpose of the investigation was to determine the correct measurement dates under applicable accounting principles for these options. The “measurement date” means the date on which the option is deemed granted under applicable accounting principles, namely Accounting Principles Board Opinion No. 25 (“APB No. 25”), and is the first date on which all of the following are known: (1) the individual employee who is entitled to receive the option grant, (2) the number of options that an individual employee is entitled to receive, and (3) the option’s purchase price.

The Special Committee found instances wherein incorrect measurement dates were used to account for certain option grants. The Special Committee concluded that none of the incorrect measurement dates was the result of fraud. The last option grant for which the measurement date was found to be in error was made in February 2004.

Specifically, the Special Committee determined that (1) there was an insufficient basis to rely on the Company’s process and relating documentation to support recorded measurement dates used to account for most stock options granted primarily during calendar years 1998 through 2003, (2) the Company had numerous grants made by means of unanimous written consents signed by Board or Compensation Committee members wherein all the signatures of the members were not received on the grant date specified in the consents and (3) the Company made several company-wide grants pursuant to an approval of the Board or Compensation Committee, but the list of grantees and number of options allocated to each grantee was not finalized as of the stated grant date.

The Special Committee also found that, during the period from April 2002 through February 2004, the Company set the grant date and exercise price of rank and file employee option grants for new hires and promotions

29

at the lowest price of the first five business days of the month following the month of their hire or promotion. The net impact of this practice was an aggregate charge of less than $400,000.

The Special Committee identified isolated instances where stock option grants did not comply with applicable terms and conditions of the stock plans from which the grants were issued. For example, the Committee determined that on two occasions, the Company granted options to directors that exceeded the annual “automatic” grant amount specified in the applicable plan. On another occasion, a grant to a director was approved one day before the individual became a director. In addition, one grant was made to an officer of the Company by the chief executive officer under delegated authority; however, under the terms of the applicable plan, the option grant should have been made by the Company’s Board or its Compensation Committee. There were also isolated instances where option grants were made below fair market value. The applicable stock option plans require that option grants must be made at fair market value on the date of grant. However, the Committee did not find any evidence that these violations were committed for improper purposes.

The Special Committee found no evidence that any incorrect measurement dates was the result of fraud. The Special Committee concluded that the errors in measurement dates it reviewed resulted primarily from a combination of unintentional errors, lack of attention to timely paperwork, and lack of internal control over aspects of equity plan administration (including lack of oversight in applying the accounting rule described above in connection with determining measurement dates) during the period in which the errors occurred

Based on results of the Special Committee’s investigation, the Company recorded stock-based compensation charges, and additional payroll taxes with respect to its employee stock option grants for which the measurement dates were found to be in error. While the impact of recording these charges was not material to the fiscal years ended March 31, 2005 and 2004, the Company deemed it appropriate to record the charges in the relevant periods. Accordingly, the Company restated the results of fiscal years 2005 and 2004, to record a net charge of approximately $0.2 million ($0.00 per share) in fiscal 2005 and a net benefit of $0.8 million ($0.02 per share) in fiscal 2004. Additionally, the Company recorded a net charge of $19.5 million to its accumulated deficit as of April 1, 2003 for cumulative charges relating to fiscal years prior to fiscal 2004.

During the fiscal year ended March 31, 2006, the Company recorded a net charge of approximately $0.3 million relating to the re-measurement of stock options resulting from the investigation. At March 31, 2006, the remaining unamortized deferred stock-based compensation charge to be recognized in future periods was less than $0.1 million.

In view of its history of operating losses, the Company has maintained a full valuation allowance on its US deferred tax assets since fiscal 2003. As a result, there is no material income tax impact relating to the stock-based compensation and payroll tax expenses recorded by the Company resulting from the investigation of the Special Committee during fiscal years 2004, 2005 and 2006. Additionally, there was no material impact of Section 409A and Section 162(m) limitations on deduction of executive stock compensation for fiscal years 2004, 2005 and 2006.

As a result of the findings described above, our restated consolidated financial statements reflect a cumulative increase in net loss of approximately $18.8 million for the fiscal years 1995 through 2005, consisting of non-cash adjustments to stock-based compensation expense resulting from the stock option grant and exercise practices discussed above, together with payroll and income tax impact. These expenses resulted in an increase to our accumulated deficit. Adjustments are also reported in our consolidated statements of operations in subsequent periods based on the accounting treatment for exercises, modifications and expenses recognized over the remaining option vesting periods.

We have increased (decreased) previously reported net loss by an aggregate amount of $0.2 million and $(0.8) million for the years ended March 31, 2005 2004, respectively. The adjustments increased (reduced) previously reported basic and diluted net loss per common share by $0.00 and $(0.02) for the years ended March 31, 2005 and 2004, respectively. The cumulative effect of the restatement adjustments on our consolidated balance sheet at March 31, 2003 resulted in an increase in accumulated deficit of approximately $19.5 million, an increase in deferred stock-based compensation of approximately $4.7 million and an increase in additional paid-in capital of approximately $18.7 million, resulting in a net decrease in total stockholders’ equity of approximately $5.4 million.

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Cost of Restatement and Legal Activities

The option grant investigation was time-consuming, required Asyst to incur significant additional expenses, estimated to be approximately $4.0 to $5.0 million over the first three quarters of our fiscal year 2007, and required significant management attention and resources during this period. The delay in filing this Form 10-K and the Form 10-Q for our fiscal quarter ended June 30, 2006 has also triggered a purported notice of default from the indenture trustee for our outstanding convertible notes.

In May 2006, certain analysts published reports suggesting that Asyst may have granted stock options in the past with favorable exercise prices in certain periods compared to stock prices before or after grant date. Subsequently, in early June 2006, the SEC and the United States Justice Department initiated inquiries relating to the option grant practices that were the subject to the Special Committee’s investigation described above. In addition, certain of the current and former directors and officers of the Company have been named as defendants in two consolidated shareholder derivative actions filed in the United States District Court of California, captioned In re Asyst Technologies, Inc. Derivative Litigation (N.D. Cal.) (the “Federal Action”), and one similar shareholder derivative action filed in California state court, captioned Forlenzo v. Schwartz, et al. (Alameda County Superior Court) (the “State Action”). Both Actions seek to recover unspecified monetary damages, disgorgement of profits and benefits, equitable and injunctive relief, and attorneys’ fees and costs. The State Action also seeks the imposition of a constructive trust on all proceeds derived from the exercise of allegedly improper stock option grants. The Company is named as a nominal defendant in both the Federal and State Actions, thus no recovery against the Company is sought.

We are not able to predict the future outcome of these governmental inquiries and legal actions. These matters could result in significant legal expenses, diversion of management’s attention from our business, commencement of formal civil or criminal administrative or litigation actions against Asyst or current or former employees or directors, significant fines or penalties, indemnity commitments to current and former officers and directors and other material harm to our business. The SEC may also disagree with the manner in which we have accounted for and reported (or not reported) the financial impact of past option grant measurement date errors or other potential accounting errors, and there is a risk that its investigation could lead to circumstances in which we may have to further restate our prior financial statements, amend prior SEC filings, or otherwise take other actions not presently contemplated. Any such circumstance could also lead to future delays in filing of our subsequent SEC reports, and consequent risks of defaults under debt obligations and de-listing of our common stock.

Overview

We develop, manufacture, sell and support integrated automation systems, primarily for the worldwide semiconductor and FPD manufacturing industries.

We principally sell directly to the semiconductor and FPD manufacturing industries. We also sell to OEMs that make production equipment for sale to semiconductor manufacturers. Our strategy is to offer integrated automation systems that enable semiconductor and FPD manufacturers to increase their manufacturing productivity and yield and to protect their investment in fragile materials during the manufacturing process.

Our functional currency is the U.S. dollar, except for our Japanese operations and their subsidiaries where our functional currency is the Japanese Yen. The assets and liabilities of these Japanese operations and their subsidiaries are generally translated using period-end exchange rates. Translation adjustments are reflected as a component of “Accumulated other comprehensive income (loss)” in our consolidated balance sheets.

On October 16, 2002, we established a joint venture with Shinko, called ASI. The joint venture develops, manufactures, sells and supports AMHS, with principal operations in Tokyo and Ise, Japan. Under terms of the joint venture agreement, we acquired 51.0 percent of the joint venture for approximately $67.5 million of cash and transaction costs. Shinko contributed its entire AMHS business, including intellectual property and other assets, installed customer base and approximately 250 employees, and retained the remaining 49.0 percent interest. We acquired ASI to enhance our presence in the 300mm AMHS and flat panel display markets. The acquisition has been accounted for as a purchase transaction in accordance with SFAS No. 141 and, accordingly, the results of ASI

31

are included in the consolidated financial statements for the periods subsequent to its acquisition. We now own 95.1% of ASI as a result of a purchase of shares in July 2006 described in Item 1 of this report.

We have two reportable segments:

The AMHS segment, which consists principally of the entire ASI operations, includes automated transport and loading systems, semiconductor and flat panel display products.

The Fab Automation Product segment, which consists principally of the entire ATI operations, includes interface products, auto-ID systems, substrate-handling robotics, sorters, connectivity software, and CFT.

We believe critical success factors include manufacturing cost reduction, product quality, customer relationships, and continued demand for our products. Demand for our products can change significantly from period to period as a result of numerous factors, including, but not limited to, changes in: (1) global economic conditions; (2) fluctuations in the semiconductor equipment market; (3) changes in customer buying patterns due to technological advancement and/or capacity requirements; (4) the relative competitiveness of our products; and (5) our ability to manage successfully the outsourcing of our manufacturing activities to meet our customers’ demands for our products and services. For this and other reasons, our results of operations for the fiscal year ended March 31, 2006, may not be indicative of future operating results.

We intend the discussion of our financial condition and results of operations that follow to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, the primary factors that resulted in those changes, and how certain accounting principles, policies and estimates affect our financial statements.

Internal Control Matters

We conclude in Item 9A of this Form 10-K that our disclosure controls and procedures, and internal control over financial reporting were not effective as of March 31, 2006, the end of our fiscal year covered by this annual report. Item 9A provides a summary of material weaknesses outstanding as of that date that we identified in management’s assessment of internal control and other related information.

See also in Item 1A — Risk Factors “If we continue to fail to achieve and maintain effective disclosure controls and procedures and internal control over financial reporting on a consolidated basis, our stock price and investor confidence in our Company could be materially and adversely affected.”

Critical Accounting Policies and Estimates

General

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, valuation of long-lived assets, asset impairments, restructuring charges, goodwill and intangible assets, income taxes, and commitments and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and judgments under different assumptions or conditions.

We believe the following critical accounting policies affect our estimates and judgments used in the preparation of our consolidated financial statements.

Revenue Recognition

We recognize revenue when persuasive evidence of an arrangement exists, product delivery has occurred or service has been rendered, the seller’s price is fixed or determinable, and collectibility is reasonably assured. Some

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of our products are large volume consumables that are tested to industry and/or customer acceptance criteria prior to shipment and delivery. Our primary shipping terms are FOB shipping point. Therefore, revenue for these types of products is recognized when title transfers. Certain of our product sales are accounted for as multiple-element arrangements. We allocate consideration to multiple element transactions based on relative objective evidence of fair values, which we determine based on prices charged for such items when sold on a stand alone basis. If we have met defined customer acceptance experience levels with both the customer and the specific type of equipment, we recognize the product revenue at the time of shipment and transfer of title, with the remainder when the other elements, primarily installation, have been completed. Some of our other products are highly customized systems and cannot be completed or adequately tested to customer specifications prior to shipment from the factory. We do not recognize revenue for these products until formal acceptance by the customer. Revenue for spare parts sales is recognized at the time of shipment and the transfer of title. Deferred revenue consists primarily of product shipments creating legally enforceable receivables that did not meet our revenue recognition policy. Revenue related to maintenance and service contracts is recognized ratably over the duration of the contracts. Unearned maintenance and service contract revenue is not significant and is included in accrued liabilities and other.

We recognize revenue for long-term contracts at ASI in accordance with the American Institute of Certified Public Accountants (“AICPA”), Statement of Position (“SOP”) 81-1, “Accounting for Performance of Construction-Type and Certain Production-Type Contracts.” We use the percentage-of-completion method to calculate revenue and related costs of these contracts because they are long-term in nature and estimates of cost to complete and extent of progress toward completion of long-term contracts are available and reasonably dependable. We record revenue and unbilled receivables each period based on the percentage of completion to date on each contract, measured by costs incurred to date relative to the total estimated costs of each contract. The unbilled receivables amount is reclassified to trade receivables once invoice is issued. We disclose material changes in our financial results that result from changes in estimates.

The accuracy of our revenue and profit recognition for contracts accounted for using the percentage of completion in a given period is significantly influenced by our estimates of the cost to complete each project. Our cost estimates for all of our significant projects use a detailed bottom up approach and we believe our experience allows us to produce materially reliable estimates. However, the profit margin estimates for a project will either increase or decrease to some extent from the amount that was originally estimated at the time of bid. Large changes in cost estimates, particularly in the bigger projects, can have a more significant effect on profitability.

We account for software revenue in accordance with the AICPA SOP 97-2, “Software Revenue Recognition.” Revenue for integration software work is recognized on a percentage-of-completion basis. Software license revenue, which is not material to the consolidated financial statements, is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectibility is probable.

Allowance for Doubtful Accounts

We estimate our allowance for doubtful accounts based on a combination of specifically identified amounts, as well as a portion of the reserve calculated based on the aging of receivables. The additional reserve is provided for the remaining accounts receivable after specific allowances at a range of percentages from 1.25 percent to 100.0 percent based on the aging of receivables. If circumstances change (such as an unexpected material adverse change in a major customer’s ability to meet its financial obligations to us or its payment trends), we may adjust our estimates of the recoverability of amounts due to us.

Inventory Reserves

We evaluate the recoverability of all inventory, including raw materials, work-in-process, finished goods and spare parts, to determine whether adjustments for impairment are required. Inventory which is obsolete or in excess of our demand forecast is fully reserved. Such provisions, once established, are not reversed until the related inventories have been sold or scrapped. If actual demand is lower than our forecast, additional inventory write-downs may be required. We outsource a majority of our Fab Automation Product manufacturing to Solectron. As part of the arrangement, Solectron purchases inventory for our benefit and we may be obligated to acquire inventory

33

purchased by Solectron if the inventory is not used over certain specified periods of time. No revenue is recorded for the sale of inventory to Solectron and any inventory buyback in excess of our demand forecast is fully reserved.

Goodwill and Other Intangible Assets

We perform an annual goodwill impairment test in the third quarter of each fiscal year using a two-step process. The first step of the test identifies when impairment may have occurred, while the second step of the test measures the amount of the impairment, if any. To determine the amount of the impairment, we estimate the fair value of our reporting segments that contain goodwill, based primarily on expected future cash flows, reduce the amount by the fair value of identifiable intangible assets other than goodwill (also based primarily on expected future cash flows), and then compare the unallocated fair value of the business to the carrying value of goodwill. To the extent goodwill exceeds the unallocated fair value of the business, an impairment expense is recognized. In connection with the annual impairment analysis for goodwill, we assessed the recoverability of the intangible assets subject to amortization in accordance with Financial Accounting Standards Board Statement (“FASB”)of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment of Long-Lived Assets to be Disposed of” (“ SFAS No. 144”).

Warranty Reserve

Our warranty policy generally states that we will provide warranty coverage for a pre-determined amount of time, generally 15 to 24 months, for material and labor to repair and service our equipment. Since fiscal year 2003, Solectron has assumed the warranty liability for the first 12 months on products it manufactures, and we are liable for warranty obligations beyond 12 months. We record the estimated warranty cost upon shipment of our products or receipt of customer’s final acceptance. The estimated warranty cost is determined based on the warranty term and historical warranty costs for a specific product. If actual product failure rates or material usage differs from our estimates, we may need to revise our estimated warranty reserve.

Accounting for Income Taxes

We have recorded a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We have considered our future taxable income and tax planning strategies in assessing our valuation allowance. Future taxable income is based upon our estimates, and actual results may significantly differ from these estimates due to the volatility of our industry. If in the future we determine that we would be able to realize our deferred tax in excess of the net amount recorded, we would record an adjustment to the deferred tax asset, increasing income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, we would record an adjustment to the deferred tax asset, charging income in the period such determination was made.

The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. We recognize potential liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when we determine the liabilities are no longer necessary. If the estimate of tax liabilities proves to be less than the ultimate tax assessment, a further charge to expense would result.

Impairment of Long-Lived Assets

We evaluate the recoverability of our long-lived tangible assets in accordance with SFAS No. 144. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows from the use of the assets and its eventual disposition. Measurement of an impairment loss for long-lived assets is based on the fair value of the assets. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less estimated costs to sell.

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Results of Operations

Comparison of Sales, Gross Profit, Expenses, Interest & Other, and Taxes

The following table sets forth our statements of operations components, expressed as a percentage of net sales for the periods indicated:

	Fiscal Year Ended March 31,
	2006			2005			2004
				(As restated)			(As restated)
NET SALES		100.0	%		100.0	%		100.0	%
COST OF SALES		64.9	%		80.1	%		82.3	%
GROSS PROFIT		35.1	%		19.9	%		17.7	%
OPERATING EXPENSES:
Research and development		6.1	%		5.7	%		12.0	%
Selling, general and administrative		18.4	%		12.7	%		23.3	%
Amortization of acquired intangible assets		3.6	%		3.3	%		6.7	%
Restructuring and other charges (credits)		(0.0	)%		0.3	%		2.2	%
Asset impairment charges		0.0	%		0.8	%		2.2	%
Total operating expenses		28.1	%		22.8	%		46.4	%
INCOME (LOSS) FROM OPERATIONS		7.0	%		(2.9	)%		(28.7	)%
INTEREST AND OTHER INCOME (EXPENSE), NET:
Interest income		0.6	%		0.3	%		0.3	%
Interest expense		(1.5	)%		(1.1	)%		(2.4	)%
Other income (expense), net		1.1	%		0.7	%		(0.1	)%
Interest and other (expense), net		0.2	%		(0.1	)%		(2.2	)%
INCOME (LOSS) BEFORE (PROVISION FOR) BENEFIT FROM INCOME TAXES AND MINORITY INTEREST		7.2	%		(3.0	)%		(30.9	)%
BENEFIT FROM (PROVISION FOR) INCOME TAXES		(4.1	)%		0.3	%		2.0	%
MINORITY INTEREST		(3.1	)%		(0.2	)%		1.5	%
NET LOSS		(0.0	)%		(2.9	)%		(27.4	)%

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The following is a summary of our net sales, costs of sales, gross profit and income (loss) from operations by segment and consolidated total for the periods presented below (in thousands):

	Fiscal Year Ended March 31,
				2005									2004
	2006			(As reported)			(Adjustments)			(As restated)			(As reported)			(Adjustments)			(As restated)
AMHS:
Net sales	$	294,483		$	380,596		$	—		$	380,596		$	168,510		$	—		$	168,510
Cost of Sales		196,571			333,956			—			333,956			145,636			—			145,636
Gross Profit	$	97,912		$	46,640		$	—		$	46,640		$	22,874		$	—		$	22,874
Income (loss) from operations	$	47,782		$	844		$	—		$	844		$	(19,245	)	$	—		$	(19,245	)
Fab Automation Products:
Net sales	$	164,738		$	232,391		$	—		$	232,391		$	133,132		$	—		$	133,132
Cost of Sales		101,404			156,774			42			156,816			102,817			(181	)		102,636
Gross Profit	$	63,334		$	75,617		$	(42	)	$	75,575		$	30,315		$	181		$	30,496
Income (loss) from operations	$	(15,496	)	$	(18,472	)	$	(201	)	$	(18,673	)	$	(68,077	)	$	833		$	(67,244	)
Consolidated:
Net sales	$	459,221		$	612,987		$	—		$	612,987		$	301,642		$	—		$	301,642
Cost of Sales		297,975			490,730			42			490,772			248,453			(181	)		248,272
Gross Profit	$	161,246		$	122,257		$	(42	)	$	122,215		$	53,189		$	181		$	53,370
Income (loss) from operations	$	32,286		$	(17,628	)	$	(201	)	$	(17,829	)	$	(87,322	)	$	833		$	(86,489	)

Net Sales

Net sales for the fiscal year ended March 31, 2006 were $459 million, a decrease of $154 million or 25 percent, from the prior year. Selling price erosion was not a primary contributor to the decrease in net sales for the period. The decrease in fiscal year 2006 sales volume was attributable to sales decreases in our AMHS segment of $86 million, primarily due to FPD declines of $132 million and 200mm products of $5 million. The FPD decline was the result of completion of a very large project in the prior year. This was partially offset by sales volume increases of $27 million for services and sales of our 300mm product line increasing by an additional $24 million.

Net sales from the Fab Automation Products segment were $165 million, a decrease of $68 million, or 29 percent from prior year. The sales decreases in our Fab segment of $68 million were primarily due to sales volumes of 200mm products decreasing by $37 million and 300mm products and services decreasing by $14 million.

Net sales for the fiscal year ended March 31, 2005 were $613 million, an increase of $311 million, or 103 percent, from fiscal year 2004. The increase in fiscal year 2005 sales were primarily attributable to sales volume increase in AMHS and 200mm SMIF products sold to semiconductor manufacturers. Net sales from the Fab Automation Products segment were $232 million, an increase of $99 million or 75 percent from prior year. Net sales from the AMHS segment were $380 million, an increase of $212 million or 126 percent from the prior year. This increase was primarily attributable to higher sales to FPD manufacturers in fiscal year 2005.

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Sales by geographic region (in thousands).

	Fiscal Year Ended March 31,
	2006		2005		2004
United States	$	87,266	$	112,923	$	63,863
Japan		183,079		146,752		83,778
Taiwan		109,174		230,334		46,211
Korea		21,123		30,240		45,785
Other Asia/Pacific		27,336		70,879		41,381
Europe		31,243		21,859		20,624
Total	$	459,221	$	612,987	$	301,642

Our sales in the United States have trended with the balance of the semiconductor industry over the past three fiscal years, with a substantial increase in FY05, then a reduction in FY06. The Japanese market for our products continues to improve, with sales in our AMHS segment increasing at a moderate rate and our Fab Automation Products segment sales increasing slightly. The most significant changes, based on dollar values, as well as on a percentage basis, have been in the Taiwan market. The large increase in FY05, compared to FY04, was due to a $160 million FPD project in FY05, and while the decrease in FY06, compared to FY05, is substantial, the Taiwan market is still a large portion of our sales and we expect this to continue. The European market has been our smallest sales area, but continues to expand and we expect this trend to continue as well, due in part to greater acceptance by both the OEMs, as well as Fabs for our Spartan sorter and related products.

Gross Profit

Because the semiconductor capital equipment industry is subject to rapid fluctuations in demand, we have continued to make significant reductions and changes in our manufacturing operations to decrease the fixed component of our manufacturing costs and improve our margins during downturns. In fiscal year 2006, we continued to reduce our fixed manufacturing costs across all business lines, with gross profit increasing by $39 million, even though net sales decreased by $153 million compared to the prior year. A major factor contributing to our gross margin improvement, is based on our POC revenue model at ASI, with completion of projects in FY06 that had begun in FY05 or earlier and the related recognition of revenue that had been deferred or unbilled. In fiscal year 2005, we also worked on a very large FPD project that had lower margins, thereby explaining the improved product mix and overall gross margin as a percent of net sales in fiscal 2006, compared to fiscal 2005. In fiscal year 2005, we had reductions in workforce, in both U.S. and international operations, and completed the transition of all of our U.S. manufacturing operations to Solectron and received the benefits of those activities during fiscal years 2005 and 2006.

Our gross profit was $161 million, $122 million and $53 million for the fiscal years ended March 31, 2006, 2005 and 2004, respectively. This represented 35 percent, 20 percent and 18 percent of net sales for the fiscal years ended March 31, 2006, 2005 and 2004, respectively. The increase in gross margin in fiscal year 2006 was due to gross margin improvement in both the Fab Automation Products as well as the AMHS segments. The Fab Automation Products income from operations were also improved through the sale of previously reserved inventory in the amount of $3 million. The gross margin improvement was attributable to continued product cost reductions through outsourced manufacturing and a lower cost supply chain. The fiscal year 2005 gross margin for AMHS was 12 percent compared with 14 percent in fiscal year 2004. The decrease of 2 percent in AMHS gross margin was due to the increase in mix of flat panel display sales that had lower margins than semiconductor sales.

We expect 300mm product sales to continue to increase as a percentage of our sales mix, although quarterly fluctuations are likely. Swings in product mix may impact our gross margins on a quarter-over-quarter basis. Through cost reduction initiatives and our outsourcing strategy, we expect continuing improvement in our 300mm gross margins although we expect price competition to continue. We expect continued declines in our 200mm product sales in the next fiscal year as bookings in our key markets in China and elsewhere have slowed down. Our gross margin will continue to be affected by future changes in product mix and net sales volumes, as well as market

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and price competition. We believe that, based on a normalized mix, gross margins at ASI will trend toward a range of 26-30% in the near term, which is more consistent with ASI’s historical gross margin performance.

Research and Development

	Fiscal Year Ended March 31,
				2005
	2006			(As reported)			(Adjustments)		(As restated)			Change
	(In thousands, except percentage)
Research and development	$	27,913		$	34,747		$	62	$	34,809		$	(6,896	)
Percentage of total net sales		6.1	%		5.7	%				5.7	%

	2005			2004
	(As restated)			(As reported)			(Adjustments)			(As restated)			Change
Research and development	$	34,809		$	36,376		$	(443	)	$	35,933		$	(1,124	)
Percentage of total net sales		5.7	%		12.0	%					11.9	%

Research and development (“R&D”) expenses decreased by $7 million in fiscal year 2006, compared to fiscal 2005, due to payroll savings of $5 million, reduced depreciation in the amount of $1 million and other expenses of $1 million. The change between fiscal years 2005 and 2004 was primarily due to payroll savings. The payroll savings mentioned in both comparisons were primarily the results from reductions in workforce.

Selling, General and Administrative

	Fiscal Year Ended March 31,
				2005
	2006			(As reported)			(Adjustments)		(As restated)			Change
	(In thousands, except percentage)
Selling, General and Administrative	$	84,503		$	78,247		$	97	$	78,344		$	6,159
Percentage of total net sales		18.4	%		12.7	%				12.7	%

	2005			2004
	(As restated)			(As reported)			(Adjustments)			(As restated)			Change
Selling, General and Administrative	$	78,344		$	70,541		$	(209	)	$	70,332		$	8,012
Percentage of total net sales		12.7	%		23.4	%					23.3	%

The selling, general and administrative (“SG&A”) expenses increased by $6 million in fiscal year 2006, primarily due to an increase of $2 million in costs for auditing and the review and testing of internal controls over financial reporting required under the Sarbanes-Oxley Act of 2002, an increase of $2 million in our bad debt allowance and an increase of $1 million in other fixed and payroll costs due to higher headcount in order to meet the increased financial and accounting requirements.

Contributing to the fiscal year 2005 increase over fiscal 2004 was an increase of approximately $4 million in our bad debt allowance, an increase of $2 million for accounting and legal costs related to the fiscal year 2005 second quarter delay in closing ASI’s books and an increase of $2 million due to the following: (1) the delayed filing of the second fiscal quarter Form 10-Q and resulting NASDAQ listing qualifications hearing process, (2) the Audit Committee’s investigation and Q1 fiscal 2005 restatement, (3) annual audit fees, (4) the review and testing of

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internal controls over financial reporting required under the Sarbanes-Oxley Act of 2002, and (5) increased spending on consultants to implement business process improvements.

Amortization of Acquired Intangible Assets

	Fiscal Year Ended March 31,
	2006			2005			Change	2005			2004			Change
	(In thousands, except percentage)
Amortization of acquired intangible assets	$	16,590		$	20,436		$(3,846)	$	20,436		$	20,160		$276
Percentage of total net sales		3.6	%		3.3	%			3.3	%		6.7	%

We amortize acquired intangible assets over periods ranging from three to ten years. The decrease in amortization in fiscal year 2006, compared to fiscal year 2005 in the amount of $4 million was primarily due to assets being fully amortized during fiscal year 2006.

Restructuring and Other Charges (Credits)

Restructuring and other charges accrual and related utilization for the fiscal years ended March 31, 2006, 2005 and 2004 were as follows (in thousands):

	Severance and			Excess			Fixed Assets
	Benefits			Facilities			Impairment			Total
Balance, March 31, 2003	$	291		$	3,617		$	192		$	4,100
Additional (reduction in) accruals		5,460			1,075			46			6,581
Non-cash related utilization		70			(444	)		(205	)		(579	)
Amounts paid in cash		(5,757	)		(2,058	)		(33	)		(7,848	)
Balance, March 31, 2004		64			2,190			—			2,254
Additional (reduction in) accruals		1,803			7			—			1,810
Amounts paid in cash		(1,803	)		(1,390	)		—			(3,193	)
Foreign currency translation adjustment		3			9			—			12
Balance, March 31, 2005		67			816			—			883
Additional (reduction in) accruals		(7	)		(39	)		—			(46	)
Non-cash related utilization		(60	)		(96	)		—			(156	)
Amounts paid in cash		—			(573	)		—			(573	)
Foreign currency translation adjustment		—			(3	)		—			(3	)
Balance, March 31, 2006	$	—		$	105		$	—		$	105

During fiscal year 2006, we recorded only minor changes in estimates to our restructuring accrual as a result of completion of various lease and sub-lease agreements, as well as final payments and adjustments on severance and benefit programs that were included in prior restructurings. The outstanding accrual balance of $0.1 million at March 31, 2006 consists of future lease obligations on operating leases which will be paid over the next two fiscal years. All remaining accrual balances are expected to be settled in cash.

In fiscal year 2005, we recorded net severance and other charges of $1.8 million, primarily for severance costs from a reduction in workforce in December 2004. In December 2004, we announced a restructuring initiative in our Fab Automation reporting segment, which involved the termination of employment of approximately 70 employees. The total costs of this restructuring were approximately $1.8 million in termination benefits.

In fiscal year 2004, we recorded net severance and other charges of $5.5 million, primarily related to $3.4 million in severance costs from a reduction in workforce in April 2003, and a $1.0 million charge related to the settlement and release of claims arising from the termination of a former officer. Included also were $1.1 million of severance expenses, primarily from headcount reductions in our Japanese operations. In addition to the severance

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charges, we recorded $1.1 million for exiting a facility in connection with our restructuring activities and for future lease obligations on a vacated facility in excess of estimated future sublease proceeds. As a result of these restructuring activities, we terminated the employment of approximately 245 employees from our U.S. as well as international operations.

Asset Impairment Charges

Asset impairment charges for fiscal years 2006, 2005 and 2004 were as follows (in thousands):

	Fiscal Year Ended March 31,
	2006		2005		2004
Land and building impairment	$	—	$	4,645	$	6,853

In conjunction with the restructuring in fiscal 2005, we had removed from service and made available for sale certain land and a building owned by AJI. The building had been underutilized since a prior decision to outsource the manufacturing of our next-generation robotics products, part of an overall strategy to outsource the manufacture of all our Fab Automation segment products. As a result, we recorded an impairment charge of $4.6 million to write the assets down to their estimated fair value, based on a market valuation, less cost to sell. We accounted for these assets as held-for-sale under SFAS No. 144.

In the third quarter of fiscal year 2006, we re-evaluated the status of the AJI facility discussed above and based on an assessment of our expected future business needs, we reclassified the assets, as held-and-used.

In the fiscal year ended March 31, 2004, we completed the sale of land in Fremont, California. The net proceeds from the sale were $12.1 million. We had intended to construct corporate headquarters facilities on the land and subsequently decided not to build these facilities. In fiscal year 2004, we recorded a $6.9 million write-down based on our latest estimate of market value as supported by the pending sale agreement at the time.

Interest and Other Income (Expense), Net

	Fiscal Year Ended March 31,								Fiscal Year Ended March 31,
	2006			2005			Change		2005			2004			Change
	(In thousands)
Interest income	$	2,527		$	1,722		$	805	$	1,722		$	815		$	907
Interest expense		(6,746	)		(6,747	)		1		(6,747	)		(7,213	)		466
Other income (expense), net		5,172			4,296			876		4,296			(237	)		4,533
Total, net	$	953		$	(729	)	$	1,682	$	(729	)	$	(6,635	)	$	5,906

Interest and other income (expense), net was $1 million, $(1) million and $(7) million for the fiscal years ended March 31, 2006, 2005 and 2004, respectively. The increase in fiscal year 2006 over fiscal year 2005 was due to non-recurring royalty income of approximately $1.0 million becoming due to us upon achievement of certain contractual milestones from our royalty partner on our licensed products and interest income of $1 million due to higher investment balances and interest rate. The increase in fiscal year 2005 over fiscal year 2004 was primarily due to increased royalty receipts of $2 million and foreign exchange gains of $1 million.

Provision for (Benefit from) Income Taxes

	Fiscal Year Ended March 31,								Fiscal Year Ended March 31,
	2006			2005			Change		2005			2004			Change
	(In thousands, except percentage)
Provision for (benefit from) income taxes	$	18,746		$	(1,916	)	$	20,662	$	(1,916	)	$	(6,150	)	$	4,234
Percentage of total net sales		4.1	%		(0.3	)%				(0.3	)%		(2.0	)%

We recorded a tax provision of $18.7 million for the fiscal year ended March 31, 2006, or 56.4 percent of our income before income taxes, compared to a tax benefit of $1.9 million for the fiscal year ended March 31, 2005, or

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10.3 percent of our loss before income taxes. The tax provision in fiscal 2006 primarily relates to our international subsidiaries, offset by a tax benefit due to amortization of deferred tax liabilities recorded in connection with the ASI acquisition of $5.3 million and the recognition of foreign deferred tax assets of $5.3 million.

The net change of $20.7 million in the tax provision in fiscal 2006 compared to the benefit in 2005 is primarily due to (1) a significant increase in income before income tax reported by the foreign subsidiaries ($51.8 million in 2006 compared to $6.4 million in 2005), the tax provisions for which are recorded at the statutory rate of each subsidiary, with an overall effective tax rate of approximately 37.2 percent; (2) a reduced tax benefit from the amortization of deferred tax liabilities related to ASI acquisition ($5.3 million tax benefit in 2006 compared to $6.5 million in 2005); and (3) tax benefit of approximately $3.1 million related to utilization of AJI’s pre-acquisition NOL in 2005. No such benefit was recorded in 2006.

We recorded a tax benefit of $1.9 million for the fiscal year ended March 31, 2005, or 10.4 percent of our loss before income taxes, compared to $6.2 million for the fiscal year ended March 31, 2004, or 6.5 percent of our loss before income taxes. The tax benefit is primarily due to amortization of deferred tax liabilities recorded in connection with the ASI acquisition of $7.5 million, offset by tax provisions in our international subsidiaries.

We have completed the analysis of the impact of the one-time favorable foreign dividend provision recently enacted as part of the American Jobs Creation Act of 2004. Based on the analysis performed, we have decided not to take actions by repatriating our foreign earnings at the current moment. As of March 31, 2006, and based on the tax laws in effect at that time, we intended to continue to indefinitely reinvest our undistributed foreign earnings and accordingly, no deferred tax liability has been recorded on these undistributed foreign earnings.

Minority Interest

Minority interest in the net (income) loss of our subsidiaries was $(14.6) million, $(1.1) million, and $4.4 million during fiscal years 2006, 2005 and 2004, respectively. This amount primarily represents the 49.0 percent share of our joint venture partner, Shinko, in the operations of ASI. The changes reflect significant net income improvements in the AMHS segment from fiscal 2004 through 2006.

Related Party Transactions

At March 31, 2006 and March 31, 2005, we did not hold any outstanding loans due to us from current employees.

Our majority-owned subsidiary, ASI, has certain transactions with its minority shareholder, Shinko. Our majority-owned subsidiary, AJI, has certain transactions with MECS Korea, in which AJI is a minority shareholder. At March 31, 2006 and 2005, significant balances with Shinko and MECS Korea were (in thousands):

	Fiscal Year Ended March 31,
	2006		2005
Accounts payable due to Shinko	$	13,406	$	39,221
Accrued liabilities due to Shinko	$	59	$	450
Accounts receivable from MECS Korea	$	90	$	100
Accounts payable due to MECS Korea	$	3	$	21
Accrued liabilities due to MECS Korea	$	81	$	—

In addition, the consolidated financial statements reflect that ASI purchased various products, installation, administrative and IT services from Shinko. AJI also purchased IT services from MECS Korea. During the fiscal years ended March 31, 2006, 2005 and 2004, sales to and purchases from Shinko and MECS were (in thousands):

	Fiscal Year Ended March 31,
	2006		2005		2004
Material and service purchases from Shinko	$	57,043	$	96,097	$	42,511
Material and service purchases from MECS Korea	$	3	$	414	$	2
Sales to MECS Korea	$	568	$	378	$	138

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Recent Accounting Pronouncements

In November 2004, the FASB issued SFAS No. 151, Inventory Costs — an Amendment of ARB No. 43, Chapter 4 (“SFAS No. 151”). SFAS No. 151 amends ARB 43, Chapter 4, to clarify those abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) that should be recognized as current-period charges. In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The provisions of this Statement are effective for inventory costs incurred during fiscal years beginning after June 15, 2005. We do not believe the impact of the adoption of the provisions of SFAS No. 151 will materially impact our financial position or results of operations.

In December 2004, the FASB issued SFAS No. 153, Exchange of Nonmonetary Assets — an amendment of APB Opinion No. 29 (“SFAS No. 153”). SFAS No. 153 amends APB Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of this Statement are effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of the provisions of SFAS No. 153 did not have a material impact on our financial position or results of operations.

In December 2004, the FASB issued SFAS No. 123(R), which replaces SFAS No. 123, “Accounting for Stock-Based Compensation,” and supersedes APB Opinion No. 25. Under SFAS No. 123(R), companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In April 2005, the SEC postponed the implementation date to the fiscal year beginning after June 15, 2005. The Company will adopt SFAS No. 123(R) in the first quarter of fiscal 2007.

The Company has decided to use the Modified Prospective Application (“MPA”) method. By using the MPA, the Company will not restate its prior period financial statements. Instead, the Company applies SFAS 123(R) for new options granted after the adoption of SFAS 123(R), i.e. April 1, 2006, and any portion of options that were granted after December 15, 1994 and have not vested by April 1, 2006. The Company uses a Black-Scholes option pricing model for calculating its option grant date fair value under SFAS 123(R).

The adoption of SFAS No. 123(R) will have a significant adverse impact on the Company’s results of operations, although it will have no impact on its overall financial position. SFAS No. 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. While the Company cannot estimate what those amounts will be in the future (because they depend on, among other things, when employees exercise stock options), the amount of operating cash flows recognized for such excess tax deductions was zero for fiscal years 2006, 2005 and 2004.

In March 2005, the SEC issued Staff Accounting Bulletin (“SAB”) No. 107, which provides guidance on the implementation of SFAS No. 123(R), “Share-Based Payment” (see discussion below). In particular, SAB No. 107 provides key guidance related to valuation methods (including assumptions such as expected volatility and expected term), the accounting for income tax effects of share-based payment arrangements upon adoption of SFAS No. 123(R), the modification of employee share options prior to the adoption of SFAS No. 123(R), the classification of compensation expense, capitalization of compensation cost related to share-based payment arrangements, first-time adoption of SFAS No. 123(R) in an interim period, and disclosures in Management’s Discussion and Analysis subsequent to the adoption of SFAS No. 123(R). SAB No. 107 became effective on March 29, 2005. It did not have a material impact on the Company’s financial position or results of operations.

In June 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections: a Replacement of Accounting Principles Board Opinion No. 20 (“APB 20”) and FASB Statement No 3 (“SFAS No. 154”.) SFAS No. 154 requires retrospective application for voluntary changes in accounting principle unless it is

42

impracticable to do so. Retrospective application refers to the application of a different accounting principle to previously issued financial statements as if that principle had always been used. SFAS No. 154’s retrospective-application requirement replaces APB 20’s requirement to recognize most voluntary changes in accounting principle by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. This Statement defines retrospective application as the application of a different accounting principle to prior accounting periods as if that principle had always been used or as the adjustment of previously issued financial statements to reflect a change in the reporting entity. This Statement also redefines restatement as the revising of previously issued financial statements to reflect the correction of an error. The requirements are effective for accounting changes made in fiscal years beginning after December 15, 2005 and will only impact the consolidated financial statements in periods in which a change in accounting principle is made.

In October 2005, the FASB issued FASB Staff Position (“FSP”) No. FAS 13-1, Accounting for Rental Costs Incurred during a Construction Period, (“FSP 13-1”). FSP 13-1 addresses the accounting for rental costs associated with operating leases that are incurred during a construction period. The guidance in FSP 13-1 is effective for the first fiscal period after December 15, 2005 and its adoption in the three-month period ended March 31, 2006, did not have a material impact on our financial position or results of operations.

In November 2005, the FASB issued FSP Nos. FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments, (“FSP 115-1 and 124-1”) which addresses the determination as to when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. FSP 115-1 and 124-1 also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. The guidance in FSP 115-1 and 124-1 amends FASB Statements No. 115, Accounting for Certain Investments in Debt and Equity Securities, and No. 124, Accounting for Certain Investments Held by Not-for-Profit Organizations, and APB Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock. The guidance in FSP 115-1 and 124-1 is effective for the first fiscal period after December 15, 2005 and its adoption in the three-month period ended March 31, 2006, did not have a material impact on our financial position or results of operations.

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes: An Interpretation of FASB Statement No. 109 (FIN No. 48). This interpretation clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS No. 109. FIN No. 48 prescribes a recognition threshold and measurement principles for the financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. This interpretation is effective for fiscal years beginning after December 15, 2006 and as such, the Company will adopt FIN No. 48 in the year ended March 31, 2007. We are currently assessing the impact the adoption of FIN No. 48 will have on our financial position or results of operations.

In June 2006, the FASB ratified the Emerging Issues Task Force (EITF) consensus on EITF Issue No. 06-2, “Accounting for Sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement No. 43” (EITF 06-2). EITF 06-2 requires companies to accrue the cost of such compensated absences over the requisite service period. The company currently accounts for the cost of compensated absences for sabbatical programs when the eligible employee completes the requisite service period, which is 10 to 20 years of service. The company is required to apply the provisions of EITF 06-2 at the beginning of fiscal 2008. EITF 06-02 allows for adoption through retrospective application to all prior periods or through a cumulative effect adjustment to retained earnings if it is impracticable to determine the period-specific effects of the change on prior periods presented. The company is currently evaluating the financial impact of this guidance and the method of adoption which will be used.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108 (“SAB No. 108”). SAB No. 108 addresses the process and diversity in practice of quantifying financial statement misstatements resulting in the potential build up of improper amounts on the balance sheet. We will be required to adopt the provisions of SAB No. 108 in the year ending March 31, 2007. We currently do not believe that the adoption of SAB No. 108 will have a material impact on our financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, (“SFAS No. 157”). SFAS No. 157 establishes a framework for measuring fair value and expands disclosures about fair value

43

measurements. The changes to current practice resulting from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. The Statement is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. We do not believe that the adoption of the provisions of SFAS No. 157 will materially impact our financial position or results of operations.

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R), (“SFAS No. 158”). SFAS No. 158 requires an employer to recognize the over-funded or under-funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position. To recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. The provisions of this Statement are effective for an employer with publicly traded equity securities are required to recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. We do not believe that the adoption of the provisions of SFAS No. 158, in the year ending March 31, 2007, will materially impact our financial position or results of operations.

Liquidity and Capital Resources

Since inception, we have funded our operations primarily through the private sale of equity securities and public stock offerings, bank borrowings, long-term debt and cash generated from operations.

As of March 31, 2006, we had approximately $94.6 million in cash and cash equivalents, $152 million in working capital and $88.5 million in long-term debt and capital lease obligations.

The table below, for the periods indicated, provides selected consolidated cash flow information (in millions):

	Fiscal Year Ended March 31,
	2006			2005			2004
Net cash provided by (used in) operating activities	$	43.7		$	(17.7	)	$	(67.8	)
Net cash provided by (used in) investing activities	$	22.1		$	(7.3	)	$	(23.8	)
Net cash provided by (used in) financing activities	$	(24.0	)	$	4.2		$	87.2

Cash flows from operating activities.

Net cash provided by operating activities in fiscal year 2006 was $43.7 million, consisting of (in millions):

Net loss	$	(0.1	)
Depreciation and amortization		23.3
Allowance for doubtful accounts		6.8
Minority interest in net income of consolidated subsidiary		14.6
Other non-cash charges		(2.2	)
Decrease in accounts receivable		29.1
Increase in inventories		(2.0	)
Decrease in prepaid expenses and other assets		8.1
Decrease in accounts payable, accrued liabilities and deferred margin		(33.9	)
Net cash provided by operating activities	$	43.7

Significant changes in assets and liabilities during the fiscal year ended March 31, 2006 included accounts receivable, which decreased due to increased cash collections at ASI, including receipts from the factoring of certain receivable balances in Japan and a decline in revenues; prepaid expenses and other assets, which decreased due to a VAT refund at ASI from the Japanese government; and accounts payable to related parties, which decreased at ASI by $25.8 million as described in Note 14, “Related Party Transactions.”

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Net cash used in operating activities in fiscal year 2005 was $17.7 million. It was primarily due to a net loss of $17.7 million, an increase in accounts receivable, net of $48.4 million and deferred taxes of $15.4 million, and increase in inventories of $5.2 million and prepaid expenses and other assets of $5.6 million, partially offset by an increase in accounts payable, accrued liabilities and deferred margin of $32.6 million, depreciation and amortization expenses of $28.4 million, allowance for doubtful accounts of $4.9 million, asset impairment charges of $4.6 million, stock-based compensation charges of $2.5 million, loss on fixed assets disposals of $0.6 million and the minority interest in the net income of our subsidiaries of $1.1 million.

Net cash used in operating activities in fiscal year 2004 was $67.8 million. It was primarily attributable to our net loss of $82.6 million, increases in accounts receivable, net of $59.4 million, primarily due to significantly higher revenue, an increase in inventory of $2.4 million, deferred taxes of $6.4 million and minority interest loss allocations of $4.4 million. These uses of cash were partially offset by a decrease in prepaid expenses and other assets of $1.2 million and non-cash charges including depreciation and amortization of $28.8 million, asset impairment charges of $6.9 million, stock-based compensation charges of $4.2 million, loss on disposal of fixed assets of $0.4 million and non-cash restructuring charges of $0.2 million. Additionally, accounts payable, accrued liabilities and deferred margin increased by a combined $45.4 million, primarily due to increased purchasing activities to support higher revenue.

We continue to improve our days sales outstanding (“DSO”) which have decreased to 110 days at March 31, 2006, compared to 111 days at March 31, 2005 and 174 days at March 31, 2004 for billed and unbilled receivables. The improvement in DSO was primarily due to better cash collections through the use of factoring of receivables. The decrease in unbilled receivables at March 31, 2006 compared to March 31, 2005 was attributable to the decreases in revenues of ASI and completion of projects started in earlier periods. The decrease in accounts payable and accrued liabilities at March 31, 2006 over those of March 31, 2005 was mainly attributable to higher collection of receivable and subsequent cash applied to payable balances at ASI and AJI, coupled with lower revenue in the business. Our inventory turns were 8.9 times for the fiscal year 2006, compared to 16.2 times for fiscal year 2005, primarily due to reduced sales of our products.

We expect that cash used in or provided by operating activities may fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, collection of accounts receivable, timing of payments, and inventory levels.

Cash flows from investing activities.

Net cash provided by investing activities in fiscal year 2006 was $22.1 million. It was due to $30.7 million in net sales of short-term investments, partially offset by $8.5 million in purchases of property and equipment, primarily fixed assets for leasehold improvements related to our new corporate headquarters.

Net cash used in investing activities in fiscal year 2005 was $7.3 million. It was due to $5 million in net purchases of short-term investments and $4.2 million in purchases of property and equipment, primarily fixed assets for research and development and customer demonstration units, partially offset by $1.9 million in proceeds from the release of restricted cash and cash equivalents, as the restriction lapsed due to the repayment of the related debt in the first quarter of fiscal year 2005.

Net cash used by investing activities in fiscal year 2004 was $23.8 million. We received net proceeds of $12.1 million from the sale of land and release of $1.4 million of restricted cash and cash equivalents. This was offset by $30 million from net purchase of short-term investments, purchase of property and equipment of $6.1 million and cash used in connection with our acquisition of Asyst Shinko America, a subsidiary of ASI for $1.2 million.

Cash flows from financing activities.

Net cash used in financing activities in fiscal year 2006 was $24.0 million, due to $12.4 million in net payments on our lines of credit, $8.3 million payments on long-term debt and capital leases and $5.9 million in dividends paid to the minority shareholder of ASI (this dividend payment was for fiscal years 2005 and 2006 in the amount of

45

$2.6 million and $3.3 million, respectively), this cash used was partially offset by $2.6 million in proceeds from the issuance of common stock under our employee stock programs.

Net cash provided by financing activities in fiscal year 2005 was $4.2 million, due to $279.9 million in proceeds from our line of credit and $3.7 million in proceeds from the issuance of common stock under our employee stock programs, partially offset by $279.4 million in pay downs against borrowings.

Net cash provided by financing activities in fiscal year 2004 was $87.2 million, primarily resulting from a total of $112.1 million from issuance of common stock. Of this $112.1 million, $98.9 million was through our common stock offering and the remaining $13.2 million was from our employee stock programs. Proceeds from this issuance were used in the repayment of $25.0 million against our commercial banking line of credit.

In November 2003, we sold 6,900,000 shares of our common stock, including exercise of the underwriters’ over-allotment option, at an offering price to the public of $15.17 per share. We received total proceeds of $98.9 million, net of the related issuance fees and costs.

On July 3, 2001, we completed the sale of $86.3 million of 53/4 percent convertible subordinated notes that resulted in aggregate proceeds of $82.9 million to us, net of issuance costs. The notes are convertible, at the option of the holder, at any time on or prior to maturity into shares of our common stock at a conversion price of $15.18 per share, which is equal to a conversion rate of 65.8718 shares per $1,000 principal amount of notes. The notes mature on July 3, 2008, pay interest on January 3 and July 3 of each year and are redeemable at par and at our option after July 3, 2004. Debt issuance costs of $2.9 million, net of amortization are included in other assets. Issuance costs are being amortized over 84 months and are being charged to other income (expense). Debt amortization costs totaled $0.5 million during each of the years ended March 31, 2006, 2005 and 2004, respectively.

Notice of default relating to Convertible Subordinated Notes.

Asyst received a letter dated August 16, 2006 from U.S. Bank National Association, as trustee under the Indenture related to Asyst’s 53/4% Convertible Subordinated Notes due 2008, which asserts that Asyst is in default under the Indenture because of the delays in filing with the SEC its Form 10-K for the fiscal year ended March 31, 2006 and Form 10-Q for the fiscal quarter ended June 30, 2006.

The letter states that this asserted default is not an “Event of Default” under the Indenture if the company cures the default within 60 days after receipt of this notice, or the default is waived by the holders of a majority in aggregate principal amount of the notes outstanding. If an Event of Default were to occur, the trustee or the holders of at least 25% in aggregate principal amount of the notes, of which $86.3 million principal amount is outstanding, may accelerate maturity of the notes.

Asyst does not agree with the trustee’s assertion that the delayed filing of the annual and quarterly reports is a default under the indenture. Nonetheless, in conjunction with the filing of this report on Form 10-K we also intend to file with the SEC our report on Form 10-Q for the fiscal quarter ended June 30, 2006. Upon completion of these filings, we intend to deliver to the trustee copies of the reports on Form 10-K and Form 10-Q, and that delivery will cure any purported defaults under the indenture and asserted by the trustee in its letter referenced above.

Acquisition and related debt financing facility.

At June 22, 2006, we established a $115 million, three-year, senior secured revolving credit and term loan facility. The credit facility was arranged by Banc of America Securities LLC. Bank of America, N.A. will serve as administrative agent. A syndicate of lenders and financial institutions, including Comerica, Development Bank of Japan, Key Bank, and Union Bank of California, is participating in the facility with Bank of America. We have the ability to borrow US Dollars or Japanese Yen under the facility. The facility carries a variable interest rate that is currently approximately 3.0% on Yen-based balances. We also anticipate amortizing approximately $3.2 million of financing costs over the life of the facility.

On July 14, 2006, Asyst and AJI purchased from Shinko shares of ASI representing an additional 44.1% of outstanding capital stock of ASI for a cash purchase price of JPY 11.7 billion (approximately US$102 million at the July 14 exchange rate). This purchase increased Asyst’s consolidated ownership of ASI to 95.1%. As of that date,

46

we borrowed an aggregate amount of approximately $81.5 million under the senior credit facility to fund the purchase of shares reported above and for general working capital purposes, and issued a letter of credit in favor of Shinko for approximately $11 million related to the equity option on Shinko’s remaining 4.9% ASI share ownership.

At any time prior to the first anniversary of the closing, and subject to the other provisions of the agreement, either Shinko or AJI may give notice to the other, calling for AJI to purchase from Shinko shares representing the remaining 4.9% of outstanding capital stock of ASI for a fixed payment of JPY 1.3 billion (approximately US$11.3 million at the July 14 exchange rate).

Other debt financing arrangements.

At March 31, 2006, we had a two-year revolving line of credit with a commercial bank, with a then-current maturity date of July 31, 2007. We amended the line of credit during the first and third quarters of fiscal year 2006. As amended, the maximum borrowing available under the line was $40.0 million; however, only $25.0 million of borrowing was available to us as long as ASI maintained $65.0 million of aggregate available borrowing under its lines of credit in Japan. The line of credit required compliance with certain financial covenants, including a quarterly net income/loss target, calculated on an after-tax basis (excluding depreciation, amortization and other non-cash items), and a requirement that we maintain during the term of the line of credit a minimum cash and cash equivalents balance of $40.0 million held in the U.S., at least $20.0 million of which had to be maintained with the bank. The specific amount of borrowing available under the line of credit at any time, however, could have changed based on the amount of letters of credit the amount of aggregate borrowing by ASI and the cash balance held at the bank. As of March 31, 2006, there was no amount outstanding under the line of credit, but the maximum borrowing had been reduced by $0.8 million with the issuance of a letter of credit during November 2005. We were in compliance with all financial covenants and had available $29.7 million as of March 31, 2006. This line of credit was terminated in July 2006.

At March 31, 2006, ASI had five revolving lines of credit with Japanese banks. These lines allow aggregate borrowing of up to 7 billion Japanese Yen, or approximately $60 million at the exchange rate as of March 31, 2006. As of March 31, 2006, ASI had no outstanding balance and a total of 7 billion available under these lines of credit. As of March 31, 2005, ASI had outstanding borrowings of 1.4 billion Japanese Yen, or approximately $13.0 million at the exchange rate as of March 31, 2005 that is recorded in short-term debt.

ASI’s lines of credit carry original terms of six months to one year, at variable interest rates based on the Tokyo Interbank Offered Rate (“TIBOR”) which was 0.06 percent at March 31, 2006 plus margins of 0.80 to 1.25 percent. Under the terms of certain of these lines of credit, ASI generally is required to maintain compliance with certain financial covenants, including requirements to report an annual net profit on a statutory basis and to maintain at least 80.0 percent of the equity reported as of its prior fiscal year-end.

ASI was in compliance with these covenants at March 31, 2006. None of these lines requires collateral and none of these lines requires guarantees from us or our subsidiaries in the event of default by ASI. In June 2006, we amended two of these lines of credit representing 4.0 billion Yen, or approximately $34 million, of borrowing capacity to extend the expiry dates to June 30, 2007, at which time all amounts outstanding under these lines of credit will be due and payable, unless the lines of credit are extended.

Our Japanese subsidiary, AJI, has term loans outstanding with two Japanese banks. These loans are repayable monthly or quarterly through various dates ranging from May 2006 through May 2008. The loans carry annual interest rates between 1.4 to 3.0 percent and substantially all of these loans are guaranteed by the Company in the United States. As of March 31, 2006 AJI had outstanding borrowings of 0.2 billion Japanese Yen or approximately $1.8 million, at exchange rates as of March 31, 2006, that are recorded as long-term debt. At March 31, 2006, AJI had approximately $1.4 million of borrowings, secured by accounts receivable balance, that are recorded as short-term debt.

We lease facilities under non-cancelable capital and operating leases, with expiration dates up to March 2013.

47

Other liquidity considerations.

Since inception, we have incurred aggregate consolidated net losses of approximately $385.2 million, and have incurred losses for the last five years. In recent years, we have funded our operations primarily from cash generated from the issuance of debt or equity securities. Cash, cash equivalents and short-term investments aggregated $109.9 million at March 31, 2006. We believe that our current cash position and the availability of additional financing via existing lines of credit will be sufficient to meet our expected cash requirements for at least the next 12 months. Our borrowing arrangements require that we comply with certain financial covenants. While we expect to meet such financial covenants, we cannot give absolute assurance that we will meet these financial covenants, including those contained in the senior secured credit facility. Specifically, we are required to maintain compliance with covenants establishing minimum EBITDA operating performance by the Company as a ratio of our total borrowing available under the senior secured credit facility. Our failure in any fiscal quarter to meet this and other covenant requirements could result in a reduction of our permitted borrowing under the facility, an acceleration of certain repayment obligations, and/or an Event of Default (which, if uncured by us or not waived by the lenders, under the terms of the facility, would require the acceleration of all re-payment obligations under the facility). Alternatively, due to the cyclical and uncertain nature of cash flows and collections from our customers, the Company’s borrowings to fund operations or working capital could exceed the permitted total leverage ratios under the credit agreement. Under any such scenario, the Company may be required pay down the outstanding borrowings from cash to maintain compliance with its financial covenants. If we are unable to meet any such covenants or pay down outstanding borrowings as required, we cannot assure the requisite lenders will grant waivers and/or amend the covenants, or that the requisite lenders will not terminate the credit agreement, preclude further borrowings or require us to repay immediately in full any outstanding borrowings. Accordingly, our ability to fund operations and working capital requirements through additional borrowing may be substantially impaired and limit our ability to grow our company or sustain or improve profitability.

The cyclical nature of the semiconductor industry makes it very difficult for us to predict future liquidity requirements with certainty. Any upturn in the semiconductor industry may result in short-term uses of cash in operations as cash may be used to finance additional working capital requirements such as accounts receivable and inventories. Alternatively, continuation or further softening of demand for our products may cause us to fund additional losses in the future. At some point in the future we may require additional funds to support our working capital and operating expense requirements or for other purposes. We may seek to raise these additional funds through public or private debt or equity financings, or the sale of assets. These financings may not be available to us on a timely basis, if at all, or, if available, on terms acceptable to us or not dilutive to our shareholders. If we fail to obtain acceptable additional financing, we may be required to reduce planned expenditures or forego investments, which could reduce our revenues, increase our losses, and harm our business.

NASDAQ Delisting Proceedings

On June 22, 2006, the Company notified the NASDAQ National Market (renamed the NASDAQ Global Market on July 1, 2006) that Asyst would not file its Form 10-K for the year ended March 31, 2006, within the 15 calendar day extension period contemplated by its Form 12b-25 filed with the SEC on June 14, 2006. On June 30, 2006, the Company received a letter from the NASDAQ Listing Qualifications Department indicating that, because of the Company’s previously announced delay in timely filing its Annual Report on Form 10-K for its fiscal year ended March 31, 2006, the Company was not in compliance with the filing requirements for continued listing on NASDAQ as set forth in NASDAQ Marketplace Rule 4310(c)(14). The Company made a request for a hearing before a NASDAQ Listings Qualifications Panel to address the filing delay, which hearing was held on August 31, 2006. On September 21, 2006, the Company received a letter from the NASDAQ Listing Qualifications Hearings department stating that a NASDAQ Listing Qualifications Panel has determined to continue the listing of Asyst’s common stock on the NASDAQ Global Market, subject to the conditions that:

•  On or before September 27, 2006, the Company submits supplemental information outlined in the letter concerning the previously announced Special Committee inquiry into stock option grants and practices; and

•  On or before November 30, 2006, the Company files its Form 10-K for the fiscal year ended March 31, 2006, its Form 10-Q for the quarter ended June 30, 2006, and all required restatements (if any).

On September 27, 2006, Asyst submitted to NASDAQ the supplemental information requested from the Company.

48

As a result of the late filing of this Form 10-K for the fiscal year 2006, we will be ineligible to register our securities on Form S-3 for sale by us or resale by others for one year. The inability to use Form S-3 could adversely affect our ability to raise capital during this period. If we failed to timely file a future periodic report with the SEC and were delisted, it could severely impact our ability to raise future capital and could have an adverse impact on our overall future liquidity. However, we are still eligible to register our securities on Form S-1.

In addition, the matters we have reported in this Item 7 under “Overview — Internal Control Matters” and in Item 9A of this Form 10-K may also have an adverse impact on our ability to obtain future capital from equity or debt./

Off-Balance Sheet Arrangements

We do not have any financial partnerships with unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes, such as entities referred to as structured finance or special purpose entities. Accordingly, we are not exposed to any financing or other risks that could arise if we had such relationships.

Contractual Obligations

The following table summarizes our significant contractual obligations at March 31, 2006, and the effect such obligations are expected to have on our liquidity and cash flows in future periods (in thousands):

	Payments Due by Period
			Less Than						More Than
	Total		1 Year		1-3 Years		3-5 Years		5 Years
Short-term loans and notes payable	$	1,443	$	1,443	$	—	$	—	$	—
Long-term debt, including interest		88,012		1,153		86,859		—		—
Capital lease obligations, including interest		541		231		310		—		—
Operating lease obligations		13,753		3,292		4,774		2,890		2,797
Purchase obligations		13,606		13,606		—		—		—
Defined benefit pension plan obligations		14,066		893		4,261		4,657		4,255
Total	$	131,421	$	20,618	$	96,204	$	7,547	$	7,052

Only non-cancelable purchase orders or contracts for the purchase of raw materials and other goods and services are included in the table above.

As more fully described in Note 11 to the Consolidated Financial Statements, we are liable, as part of the original ASI acquisition in fiscal year 2003, to provide funding for plan benefits under ASI’s pension plan. As of March 31, 2006 and 2005, the liability was $7.0 million and $9.6 million, respectively. As more fully described in Note 15 to the Consolidate Financial Statements, on June 22, 2006, we entered into an agreement to acquire from Shinko the remaining ASI shares we did not already own. This purchase increased our consolidated ownership of ASI to 95.1% at the closing on July 14, 2006; while Shinko retained ownership of a 4.9% equity interest. At any time as of the first anniversary of the closing, and subject to the other provisions of the agreement, either Shinko or we may give notice to the other calling for us to purchase from Shinko this remaining 4.9% equity for a fixed payment of JPY 1.3 billion (approximately US$11 million at the June 22 exchange rate). Under certain circumstances, Shinko can accelerate upon thirty (30) days written notice this purchase obligation. These circumstances include (a) when our equity ownership in ASI falls below 50%, (b) when bankruptcy or corporate reorganization proceedings are filed against us or our subsidiary AJI (which holds ownership of the shares in ASI); (c) when a merger or corporate reorganization has been approved involving all or substantially all of the Company’s assets; (d) when Shinko’s equity ownership in ASI falls below 4.9%; or (e) when the Company has failed to make any payment when due in respect of any loan secured by a pledge of the Company’s right, title and interest in and to the shares of ASI (and the holder of such security interest elects to exercise its rights against AJI in respect of such shares).

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Item 7A — Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk.  Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. We do not use derivative financial instruments in our investment portfolio. Our investment portfolio consists of short-term fixed income securities and by policy we limit the amount of credit exposure to any one issuer. As stated in our investment policy, we ensure the safety and preservation of our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by investing in safe and high-credit quality securities and by periodically positioning our portfolio to respond appropriately to a significant reduction in a credit rating of any investment issuer, guarantor or depository. The portfolio includes only marketable securities with active secondary or resale markets to ensure portfolio liquidity. These securities, like all fixed income instruments, carry a degree of interest rate risk. Fixed-rate securities have their fair market value adversely affected by rising interest rates. As a result of the relatively short duration of our portfolio, an immediate hypothetical parallel shift to the yield curve of plus 50 basis points (“BPS”), and 100 BPS would result in a reduction of 0.01 percent in the market value of our investment portfolio as of March 31, 2006. We also have the ability to keep our fixed income investments fairly liquid. Therefore, we would not expect our operating results or cash flows to be affected to any significant degree by a sudden change in market interest rates on our investment portfolio.

The Company adopted a Foreign Exchange Policy that documented how we intend to comply with the accounting guidance under SFAS No. 133. Under the policy there are guidelines that permit the Company to have hedge accounting treatment under both Fair Value and Cash Flow hedges. The policy approval limits are up to $10 million with the CFO’s approval and over $10 million with the additional approval of the CEO.

The table below presents principal amounts and related weighted average interest rates for the investment portfolio at March 31, 2006. As a general matter, our intent is not to hold investments longer than twelve months:

	Remaining	Principal		Weighted Average
	Maturities	Amount		Interest Rate
	(In thousands)
CASH EQUIVALENTS:
Institutional money market funds	within 1 year	$	19,756	4.14% — 4.64%
Commercial paper	within 1 year		2,993	4.52% — 4.59%
Total cash equivalents		$	22,749
SHORT-TERM INVESTMENTS:
Auction rate securities	within 39 years	$	8,300	4.5% — 4.86%
Corporate debt securities	within 1 year		6,005	3.3% — 3.71%
Federal agency notes	within 1 year		999	2.73%
Total short-term investments		$	15,304

The auction rate securities in the tables above have a reset feature by nature, that the interest rates of these securities are reset at least monthly.

Foreign Currency Exchange Risk.  We engage in international operations and transact business in various foreign countries. The primary source of foreign currency cash flows is Japan and to a lesser extent China, Taiwan, Singapore and Europe. Although we operate and sell products in various global markets, substantially all sales are denominated in U.S. dollars, except in Japan. To date, the foreign currency transactions and exposure to exchange rate volatility have not been significant. Although we do not anticipate any significant fluctuations, there can be no assurance that foreign currency exchange risk will not have a material impact on our financial position, results of operations or cash flow in the future. The following table presents our net loss, assuming a hypothetical strengthening of the Japanese Yen by 5.0 percent and 10.0 percent, respectively, compared to the average rate used during the fiscal year ended March 31, 2006 (in thousands):

	Strengthening in Japanese				No change in
	Yen of X Percent				Japanese Yen
	10%		5%		Exchange Rate
Net income (loss) for the fiscal year ended March 31, 2006	$	3,926	$	1,805	$	(104	)

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Item 8 — Financial Statements and Supplementary Data

Consolidated Financial Statements

	Page
Consolidated Balance Sheets		52
Consolidated Statements of Operations		53
Consolidated Statements of Shareholders’ Equity		54
Consolidated Statements of Cash Flows		55
Notes to Consolidated Financial Statements		56
Report of Independent Registered Public Accounting Firm		94

Financial Statement Schedule

Schedule II Valuation and Qualifying Accounts for the years ended March 31, 2006, 2005 and 2004 appear on page 122 of this Annual Report and should be read in conjunction with the consolidated financial statements and related notes thereto and the report of our independent registered public accounting firm filed herewith.

All other schedules are omitted because they are not applicable or the required information is shown in the Financial Statements or the notes thereto.

51

ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	March 31,
	2006			2005
				(As restated)
	(In thousands, except
	share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	94,622		$	55,094
Short-term investments		15,304			46,086
Accounts receivable, net		141,453			189,943
Inventories		33,219			33,515
Prepaid expenses and other current assets		26,831			33,971
Total current assets		311,429			358,609
Property and equipment, net		23,108			15,458
Goodwill		58,840			64,014
Intangible assets, net		19,334			40,898
Other assets		2,583			4,795
	$	415,294		$	483,774
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term loans and notes payable	$	1,443		$	20,563
Current portion of long-term debt and capital leases		1,368			2,757
Accounts payable		75,376			83,913
Accounts payable-related parties		13,409			39,242
Accrued and other liabilities		62,902			70,645
Deferred margin		5,335			6,013
Total current liabilities		159,833			223,133
LONG-TERM LIABILITIES
Long-term debt and capital leases, net of current portion		87,168			88,750
Deferred tax liability		3,119			8,548
Other long-term liabilities		10,974			9,771
Total long-term liabilities		101,261			107,069
COMMITMENTS AND CONTINGENCIES (see Notes 13 and 15)
MINORITY INTEREST		66,521			63,855
SHAREHOLDERS’ EQUITY
Common stock, no par value:
Authorized shares — 300,000,000
Outstanding shares — 48,462,235 and 47,779,539 shares at March 31, 2006 and 2005, respectively		473,422			469,201
Deferred stock-based compensation		(1,319	)		(1,879	)
Accumulated deficit		(385,178	)		(385,074	)
Accumulated other comprehensive income		754			7,469
Total shareholders’ equity		87,679			89,717
Total liabilities, minority interest and shareholders’ equity	$	415,294		$	483,774

The accompanying notes are an integral part of these consolidated financial statements.

52

ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Fiscal Year Ended March 31,
	2006			2005			2004
				(As restated)			(As restated)
	(In thousands, except per share data)
NET SALES	$	459,221		$	612,987		$	301,642
COST OF SALES		297,975			490,772			248,272
GROSS PROFIT		161,246			122,215			53,370
OPERATING EXPENSES:
Research and development		27,913			34,809			35,933
Selling, general and administrative		84,503			78,344			70,332
Amortization of acquired intangible assets		16,590			20,436			20,160
Restructuring and other charges (credits)		(46	)		1,810			6,581
Asset impairment charges		—			4,645			6,853
Total operating expenses		128,960			140,044			139,859
INCOME (LOSS) FROM OPERATIONS		32,286			(17,829	)		(86,489	)
INTEREST AND OTHER INCOME (EXPENSE), NET:
Interest income		2,527			1,722			815
Interest expense		(6,746	)		(6,747	)		(7,213	)
Other income (expense), net		5,172			4,296			(237	)
Interest and other income (expense), net		953			(729	)		(6,635	)
INCOME (LOSS) BEFORE BENEFIT FROM (PROVISION FOR) INCOME TAXES AND MINORITY INTEREST		33,239			(18,558	)		(93,124	)
BENEFIT FROM (PROVISION FOR) INCOME TAXES		(18,746	)		1,916			6,150
MINORITY INTEREST		(14,597	)		(1,101	)		4,358
NET LOSS	$	(104	)	$	(17,743	)	$	(82,616	)
BASIC AND DILUTED NET LOSS PER SHARE	$	(0.00	)	$	(0.37	)	$	(1.98	)
SHARES USED IN THE PER SHARE CALCULATION:
Basic and diluted		47,972			47,441			41,805

The accompanying notes are an integral part of these consolidated financial statements.

53

ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

													Accumulated
							Deferred						Other
	Common Stock						Stock-Based			Accumulated			Comprehensive
	Shares			Amount			Compensation			Deficit			Income (Loss)			Total
				(As restated)			(As restated)			(As restated)						(As restated)
	(In thousands, except share data)
BALANCES, MARCH 31, 2003, as previously reported		38,412,031		$	332,569		$	(3,992	)	$	(265,248	)	$	4,705		$	68,034
Cumulative effect of restatement		—			18,713			(4,658	)		(19,467	)		—			(5,412	)
BALANCES, MARCH 31, 2003, as restated		38,412,031			351,282			(8,650	)		(284,715	)		4,705			62,622
Components of comprehensive loss:
Net loss		—			—			—			(82,616	)		—			(82,616	)
Foreign currency translation		—			—			—			—			3,748			3,748
Unrealized losses on investments		—			—			—			—			(9	)		(9	)
Total comprehensive loss											—						(78,877	)
Issuance of common stock from secondary stock offering, net of issuance costs of $5.7 million		6,900,000			98,945			—			—			—			98,945
Issuance of common stock under employee stock option and employee stock purchase plans		1,859,717			13,194			—			—			—			13,194
Deferred stock-based compensation related to stock option grants and the issuance of restricted stock to employees		—			2,279			(2,279	)		—			—			—
Tax benefit relating to stock options					2,213												2,213
Amortization of deferred stock-based compensation		—			—			2,900			—			—			2,900
Stock-based compensation expense relating to modification of stock options		—			189			—			—			—			189
Non-employee stock-based compensation		—			1,066			—			—			—			1,066
Reversal of deferred stock-based compensation due to forfeitures		(118,000	)		(3,262	)		3,262			—			—			—
BALANCES, MARCH 31, 2004, as restated		47,053,748			465,906			(4,767	)		(367,331	)		8,444			102,252
Components of comprehensive loss:
Net loss		—			—			—			(17,743	)		—			(17,743	)
Foreign currency translation		—			—			—			—			(842	)		(842	)
Unrealized losses on investments		—			—			—			—			(133	)		(133	)
Total comprehensive loss																	(18,718	)
Issuance of common stock under employee stock option and employee stock purchase plans		749,391			3,710			—			—			—			3,710
Deferred stock-based compensation related to issuance of restricted stock to employees		—			1,240			(1,240	)		—			—			—
Amortization of deferred stock-based compensation		—			—			2,376			—			—			2,376
Non-employee stock-based compensation		—			97			—			—			—			97
Reversal of deferred stock-based compensation due to forfeitures		(23,600	)		(1,752	)		1,752			—			—			—
BALANCES, MARCH 31, 2005, as restated		47,779,539			469,201			(1,879	)		(385,074	)		7,469			89,717
Components of comprehensive loss:
Net income		—			—			—			(104	)					(104	)
Foreign currency translation		—			—			—			—			(6,946	)		(6,946	)
Unrealized gains on investments		—			—			—			—			231			231
Total comprehensive loss																	(6,819	)
Issuance of common stock under employee stock option and employee stock purchase plans		682,696			2,611			—			—			—			2,611
Deferred stock-based compensation related to issuance of restricted stock to employees		—			1,389			(1,389	)		—			—			—
Amortization of deferred stock-based compensation		—			—			1,819			—			—			1,819
Non-employee stock-based compensation		—			351			—			—			—			351
Reversal of deferred stock-based compensation due to forfeitures		—			(130	)		130			—			—			—
BALANCES, MARCH 31, 2006		48,462,235		$	473,422		$	(1,319	)	$	(385,178	)	$	754		$	87,679

The accompanying notes are an integral part of these consolidated financial statements.

54

ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Fiscal Year Ended March 31,
	2006			2005			2004
				(As restated)			(As restated)
				(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS	$	(104	)	$	(17,743	)	$	(82,616	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		23,339			28,442			28,843
Non-cash restructuring charges		—			—			190
Allowance for doubtful accounts		6,791			4,862			222
Asset impairment charges		—			4,645			6,853
Minority interest in net income (loss) of consolidated subsidiaries		14,597			1,101			(4,358	)
Loss on disposal of fixed assets		876			571			431
Stock-based compensation expense		2,170			2,473			4,155
Amortization of lease incentive payments		(208	)		—			—
Deferred taxes, net		(4,929	)		(15,439	)		(6,394	)
Changes in assets and liabilities, net of acquisitions:		—			—			—
Accounts receivable, net		29,081			(48,446	)		(59,370	)
Inventories		(2,046	)		(5,206	)		(2,392	)
Prepaid expenses and other assets		8,072			(5,645	)		1,222
Accounts payable, accrued liabilities and deferred margin		(33,929	)		32,644			45,401
Net cash provided by (used in) operating activities		43,710			(17,741	)		(67,813	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments		(34,985	)		(84,744	)		(38,462	)
Sales or maturity of investments		65,650			79,709			8,500
Release of restricted cash and cash equivalents		—			1,904			1,403
Purchases of property and equipment		(8,524	)		(4,152	)		(6,119	)
Net proceeds from sale of land		—			—			12,106
Net cash used in acquisitions		—			(31	)		(1,179	)
Net cash provided by (used in) investing activities		22,141			(7,314	)		(23,751	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit		429,573			279,885			—
Payments to line of credit		(441,973	)		(271,519	)		(25,000	)
Payments of short-term loans		—			—			(1,923	)
Dividends paid to minority shareholder of ASI		(5,939	)		—			—
Principal payments on long-term debt and capital leases		(8,312	)		(7,920	)		1,939
Proceeds from issuance of common stock		2,611			3,710			112,139
Net cash provided by (used in) financing activities		(24,040	)		4,156			87,155
Effect of exchange rate changes on cash and cash equivalents		(2,283	)		(414	)		(3,898	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		39,528			(21,313	)		(8,307	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		55,094			76,407			84,714
CASH AND CASH EQUIVALENTS, END OF YEAR	$	94,622		$	55,094		$	76,407
Supplemental disclosures:
Cash paid during the year for interest	$	6,229		$	5,690		$	6,751
Cash paid (received) during the year for income taxes, net of refunds	$	14,380		$	3,153		$	(573	)

The accompanying notes are an integral part of these consolidated financial statements.

55

ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Organization of the Company:

The accompanying consolidated financial statements include the accounts of Asyst Technologies, Inc., or Asyst, which was incorporated in California on May 31, 1984, our subsidiaries and our majority-owned joint venture. We develop, manufacture, sell and support integrated automation systems, primarily for the semiconductor and secondarily for the flat panel display (“FPD”) manufacturing industries.

In October 2002, we purchased a 51.0 percent interest in Asyst Shinko, Inc (“ASI”) a joint venture with Shinko Electric, Co. Ltd. (“Shinko”) of Japan.

On July 14, 2006, we purchased an additional 44.1% of outstanding capital stock of ASI (see Note 15)

In April 2003, our majority-owned joint venture, ASI, acquired that portion of Shinko that provides ongoing support to ASI’s North American Automated Material Handling Systems (“AMHS”) customers. ASI renamed this subsidiary Asyst Shinko America (“ASAM”).

The above transactions, which were unrelated, were accounted for using the purchase method of accounting. Accordingly, our Consolidated Statements of Operations and of Cash Flows for each of the years in the three-year period ended March 31, 2006 include the results of these acquired entities for the periods subsequent to the date of the respective acquisitions. We consolidate fully the financial position and results of operations of ASI and account for the minority interest in the consolidated financial statements.

2.   Results of Independent Directors’ Stock Option Investigation

In May 2006, certain analysts published reports suggesting that Asyst may have granted stock options in the past with favorable exercise prices in certain periods compared to stock prices before or after grant date. In response to such reports, management began an informal review of the Company’s past stock option grant practices. On June 7, 2006, the SEC sent a letter to the Company requesting a voluntary production of documents relating to past option grants. On June 9, 2006, the Company’s Board of Directors appointed a special committee of three independent directors to conduct a formal investigation into past stock option grants and practices. The Special Committee retained independent legal counsel and independent forensic and technical specialists to assist in the investigation.

The Special Committee’s investigation was completed on September 28, 2006, with the delivery of the Committee’s final report on that date. The investigation covered option grants made to all employees, directors and consultants during the period from January 1995 through June 2006. The Special Committee found instances wherein incorrect measurement dates were used to account for certain option grants. The Special Committee concluded that none of the incorrect measurement dates was the result of fraud. The last stock option for which the measurement date was found to be in error was granted in February 2004.

Specifically, the Special Committee determined that (1) there was an insufficient basis to rely on the Company’s process and relating documentation to support recorded measurement dates used to account for most stock options granted primarily during calendar years 1998 through 2003, (2) the Company had numerous grants made by means of unanimous written consents signed by Board or Compensation Committee members wherein all the signatures of the members were not received on the grant date specified in the consents; (3) the Company made several company-wide grants pursuant to an approval of the Board or Compensation Committee, but the list of grantees and number of options allocated to each grantee was not finalized as of the stated grant date.

The Special Committee also found that, during the period from April 2002 through February 2004, the Company set the grant date and exercise price of rank and file employee option grants for new hires and promotions at the lowest price of the first five business days of the month following the month of their hire or promotion. The net impact of this practice was an aggregate charge of less than $400,000.

56

ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Special Committee identified isolated instances where stock option grants did not comply with applicable terms and conditions of the stock plans from which the grants were issued. For example, the Committee determined that on two occasions, the Company granted options to directors that exceeded the annual “automatic” grant amount specified in the applicable plan. On another occasion, a grant to a director was approved one day before the individual became a director. In addition, one grant was made to an officer of the Company by the chief executive officer under delegated authority; however, under the terms of the applicable plan, the option grant should have been made by the Company’s Board or its Compensation Committee. There were also isolated instances where option grants were made below fair market value. The applicable stock option plans require that option grants must be made at fair market value on the date of grant. However, the Committee did not find any evidence that these violations were fraudulent or committed for improper purposes.

The Special Committee’s investigation also identified less frequent errors in other categories, such as grants made to a small number of employees who had not formally commenced their employment as of the grant approval date, and modifications or amendments to existing options that had not been appropriately accounted for.

The Special Committee concluded that the errors in measurement dates it reviewed resulted primarily from a combination of unintentional errors, lack of attention to timely paperwork, and insufficient internal control over aspects of equity plan administration (including lack of oversight in applying the accounting rule described below in connection with determining measurement dates) during the period in which the errors occurred. The Special Committee found no evidence that any incorrect measurement dates were the result of fraud.

To determine the correct measurement dates under applicable accounting principles for these options, the Committee followed the guidance in Accounting Principles Board Opinion No. 25 (“APB No. 25”), which deems the “measurement date” as the first date on which all of the following are known: (1) the individual employee who is entitled to receive the option grant, (2) the number of options that an individual employee is entitled to receive, and (3) the option’s exercise price. In instances where the Special Committee determined it could not rely on the original stock option grant date, the Special Committee determined corrected measurement dates based on its ability to establish or confirm, whether through other documentation, consistent or established Company practice or processes, or credible circumstantial information, that all requirements for the proper granting of an option had been satisfied under applicable accounting principles.

Based on the results of the Special Committee’s investigation, the Company recorded stock-based compensation charges and additional payroll taxes with respect to its employee stock option grants for which the measurement dates were found to be in error. While the impact of recording these charges was not material to the fiscal years ended March 31, 2005 and 2004, the Company deemed it appropriate to record the charges in the relevant periods, since recording the cumulative out of period charges in fiscal 2006 would be material to that period. Accordingly, the Company restated the results of fiscal years 2005 and 2004, to record a net charge of approximately $0.2 million or $0.00 per share in fiscal 2005 and a net benefit of $0.8 million or $(0.02) per share in fiscal 2004. Additionally, the Company recorded a net charge of $19.5 million to its accumulated deficit as of April 1, 2003 for cumulative charges relating to fiscal years prior to fiscal 2004.

During the fiscal year ended March 31, 2006, the Company recorded a net charge of approximately $0.3 million relating to the re-measurement of stock options resulting from the investigation. At March 31, 2006, the remaining unamortized deferred stock-based compensation charge to be recognized in future periods was less than $0.1 million.

In view of its history of operating losses, the Company has maintained a full valuation allowance on its US deferred tax assets since fiscal 2003. As a result, there is no material income tax impact relating to the stock-based compensation and payroll tax expenses recorded by the Company resulting from the investigation of the Special Committee during fiscal years 2004, 2005 and 2006. Additionally, there was no material impact of Section 409A and Section 162(m) limitations on deduction of executive stock compensation for fiscal years 2004, 2005 and 2006.

57

ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following tables set forth the effects of the restatement on the Company’s consolidated financial statements for the years ended March 31, 2005 and 2004:

CONSOLIDATED BALANCE SHEET

	March 31, 2005
	(As reported)			(Adjustments)			(As restated)
	(In thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	55,094		$	—		$	55,094
Short-term investments		46,086			—			46,086
Accounts receivable, net		189,943			—			189,943
Inventories		33,515			—			33,515
Prepaid expenses and other current assets		33,971			—			33,971
Total current assets		358,609			—			358,609
Property and equipment, net		15,458			—			15,458
Goodwill		64,014			—			64,014
Intangible assets, net		40,898			—			40,898
Other assets		4,795			—			4,795
	$	483,774		$	—		$	483,774
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term loans and notes payable	$	20,563		$	—		$	20,563
Current portion of long-term debt and capital leases		2,757			—			2,757
Accounts payable		83,913			—			83,913
Accounts payable-related parties		39,242			—			39,242
Accrued and other liabilities		70,439			206			70,645
Deferred margin		6,013			—			6,013
Total current liabilities		222,927			206			223,133
LONG-TERM LIABILITIES
Long-term debt and capital leases, net of current portion		88,750			—			88,750
Deferred tax liability		8,548			—			8,548
Other long-term liabilities		9,771			—			9,771
Total long-term liabilities		107,069			—			107,069
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST		63,855			—			63,855
SHAREHOLDERS’ EQUITY
Common stock, no par value:
Authorized shares — 300,000,000
Outstanding shares — 47,779,539		450,005			19,196			469,201
Deferred stock-based compensation		(1,312	)		(567	)		(1,879	)
Accumulated deficit		(366,239	)		(18,835	)		(385,074	)
Accumulated other comprehensive income		7,469			—			7,469
Total shareholders’ equity		89,923			(206	)		89,717
Total liabilities, minority interest and shareholders’ equity	$	483,774		$	—		$	483,774

58

ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONSOLIDATED STATEMENTS OF OPERATIONS

	Fiscal Year Ended March 31,
	2005									2004
	(As reported)			(Adjustments)			(As restated)			(As reported)			(Adjustments)			(As restated)
	(In thousands, except per share data)
NET SALES	$	612,987		$	—		$	612,987		$	301,642		$	—		$	301,642
COST OF SALES		490,730			42			490,772			248,453			(181	)		248,272
GROSS PROFIT		122,257			(42	)		122,215			53,189			181			53,370
OPERATING EXPENSES:
Research and development		34,747			62			34,809			36,376			(443	)		35,933
Selling, general and administrative		78,247			97			78,344			70,541			(209	)		70,332
Amortization of acquired intangible assets		20,436			—			20,436			20,160			—			20,160
Restructuring and other charges (credits)		1,810			—			1,810			6,581			—			6,581
Asset impairment charges		4,645			—			4,645			6,853			—			6,853
Total operating expenses		139,885			159			140,044			140,511			(652	)		139,859
INCOME (LOSS) FROM OPERATIONS		(17,628	)		(201	)		(17,829	)		(87,322	)		833			(86,489	)
INTEREST AND OTHER INCOME (EXPENSE), NET:
Interest income		1,722			—			1,722			815			—			815
Interest expense		(6,746	)		—			(6,746	)		(7,213	)		—			(7,213	)
Other income (expense), net		4,296			—			4,296			(237	)		—			(237	)
Interest and other (expense), net		(729	)		—			(729	)		(6,635	)		—			(6,635	)
LOSS BEFORE BENEFIT FROM INCOME TAXES AND MINORITY INTEREST		(18,357	)		(201	)		(18,558	)		(93,957	)		833			(93,124	)
BENEFIT FROM INCOME TAXES		1,916			—			1,916			6,150			—			6,150
MINORITY INTEREST		(1,101	)		—			(1,101	)		4,358			—			4,358
NET LOSS	$	(17,542	)	$	(201	)	$	(17,743	)	$	(83,449	)	$	833		$	(82,616	)
BASIC AND DILUTED NET LOSS PER SHARE	$	(0.37	)	$	(0.00	)	$	(0.37	)	$	(2.00	)	$	0.02		$	(1.98	)
SHARES USED IN THE PER SHARE CALCULATION:
Basic and diluted		47,441			47,441			47,441			41,805			41,805			41,805

59

ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	2005									2004
	(As reported)			(Adjustments)			(As restated)			(As reported)			(Adjustments)			(As restated)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS	$	(17,542	)	$	(201	)	$	(17,743	)	$	(83,449	)	$	833		$	(82,616	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		28,442			—			28,442			28,843			—			28,843
Non-cash restructuring charges		—			—			—			190			—			190
Allowance for doubtful accounts		4,862			—			4,862			222			—			222
Asset impairment charges		4,645			—			4,645			6,853			—			6,853
Minority interest in net income (loss) of consolidated subsidiaries		1,101			—			1,101			(4,358	)		—			(4,358	)
Loss on disposal of fixed assets		571			—			571			431			—			431
Stock-based compensation expense		1,621			852			2,473			2,646			1,509			4,155
Amortization of lease incentive payments		—			—			—			—			—			—
Deferred taxes, net		(15,439	)		—			(15,439	)		(6,394	)		—			(6,394	)
Changes in assets and liabilities, net of acquisitions:								—									—
Accounts receivable, net		(48,446	)		—			(48,446	)		(59,370	)		—			(59,370	)
Inventories		(5,206	)		—			(5,206	)		(2,392	)		—			(2,392	)
Prepaid expenses and other assets		(5,645	)		—			(5,645	)		1,222			—			1,222
Accounts payable, accrued liabilities and deferred margin		33,295			(651	)		32,644			47,743			(2,342	)		45,401
Net cash provided by (used in) operating activities		(17,741	)		—			(17,741	)		(67,813	)		—			(67,813	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments (See Note 5)		(84,744	)		—			(84,744	)		(38,462	)		—			(38,462	)
Sales or maturity of investments (See Note 5)		79,709			—			79,709			8,500			—			8,500
Release of restricted cash and cash equivalents		1,904			—			1,904			1,403			—			1,403
Purchases of property and equipment, net		(4,152	)		—			(4,152	)		(6,119	)		—			(6,119	)
Net proceeds from sale of land		—			—			—			12,106			—			12,106
Net cash used in acquisitions		(31	)		—			(31	)		(1,179	)		—			(1,179	)
Net cash provided by (used in) investing activities		(7,314	)		—			(7,314	)		(23,751	)		—			(23,751	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit		279,885			—			279,885			—			—			—
Payments to line of credit		(271,519	)		—			(271,519	)		(25,000	)		—			(25,000	)
Payments of short-term loans		—			—			—			(1,923	)		—			(1,923	)
Principal payments on long-term debt and capital leases		(7,920	)		—			(7,920	)		1,939			—			1,939
Proceeds from issuance of common stock		3,710			—			3,710			112,139			—			112,139
Net cash provided by (used in) financing activities		4,156			—			4,156			87,155			—			87,155
Effect of exchange rate changes on cash and cash equivalents		(414	)		—			(414	)		(3,898	)		—			(3,898	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(21,313	)		—			(21,313	)		(8,307	)		—			(8,307	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		76,407			—			76,407			84,714			—			84,714
CASH AND CASH EQUIVALENTS, END OF YEAR (See Note 5)	$	55,094		$	—		$	55,094		$	76,407		$	—		$	76,407

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

3.   Liquidity:

Since inception, we have incurred aggregate consolidated net losses of approximately $385.2 million, and have incurred losses during each of the last 5 years. In recent years, we have funded our operations primarily from cash generated from the issuance of debt or equity securities. Cash, cash equivalents and short-term investments aggregated $109.9 million at March 31, 2006. We believe that our current cash position and the availability of additional financing via existing lines of credit will be sufficient to meet our expected cash requirements for at least the next 12 months.

We received a letter dated August 16, 2006, from the trustee under the indenture relating to our convertible notes asserted that Asyst is in default under the notes’ indenture because of the previously announced delays in filing with the SEC and the trustee this report on Form 10-K and in filing with the SEC our the Form 10-Q for the fiscal quarter ended June 30, 2006. The letter stated that this asserted default was not an “Event of Default” under the indenture if the Company cures the default within 60 days after receipt of the notice, or if the default were waived by the holders of a majority in aggregate principal amount of the notes outstanding. If an Event of Default were to occur, and is continuing under the indenture, the trustee or the holders of at least 25% in aggregate principal amount of the notes at the time outstanding may accelerate maturity of the notes.

Asyst does not agree with the trustee’s assertion that the delayed filing of the annual and quarterly reports is a default under the indenture. However, in conjunction with the filing of this report on Form 10-K we also intend to file with the SEC our report on Form 10-Q for the fiscal quarter ended June 30, 2006. Upon completion of those filings, we intend to deliver to the trustee copies of the reports on Forms 10-K and 10-Q, and that delivery will cure any purported defaults under the indenture and asserted by the trustee in its letter referenced above.

As a result also of our filing delays, we have received notices from the NASDAQ Global Market to the effect that our common stock would be de-listed unless, prior to November 30, 2006, we filed this Form 10-K and the Form 10-Q for the fiscal quarter ended June 30, 2006, with any required restatements (further conditioned upon our providing supplemental information requested by the panel, which we timely provided).

As a result of the delay in filing this report and the Form 10-Q for our fiscal quarter ended June 30, 2006, we are not eligible to register any of our securities on Form S-3 for sale by us or resale by others until we have timely filed all reports required to be filed under the Securities Exchange Act of 1934 during the 12 months, and any portion of a month, immediately preceding the filing of a registration statement on Form S-3. This condition may adversely affect our ability to restructure outstanding indebtedness, to raise capital by other means, or to acquire other companies by using our securities to pay the acquisition price.

Under certain circumstances, Shinko can accelerate upon thirty (30) days written notice our obligation to purchase the remaining 4.9% equity it holds in ASI (see Note 15). These circumstances include (a) when AJI’s equity ownership in ASI falls below 50%; (b) when bankruptcy or corporate reorganization proceedings are filed against the Company or AJI; (c) when a merger or corporate reorganization has been approved involving all or substantially all of the Company’s assets; (d) when Shinko’s equity ownership in ASI falls below 4.9%; or (e) when the Company has failed to make any payment when due in respect of any loan secured by a pledge of the Company’s right, title and interest in and to the shares of ASI (and the holder of such security interest elects to exercise its rights against AJI in respect of such shares). In any such event, an acceleration could impose on us an unforeseen payment obligation, which could impact our liquidity or which payment could be subject to restrictions or covenants, or be subject to third party approvals under our debt facilities. Our inability to purchase the remaining ASI equity held by Shinko, when and as required, could significantly impact our continued control and ownership of ASI. Due to the cyclical and uncertain nature of cash flows and collections from our customers, the Company (or its subsidiaries) may from time to time incur borrowings which could cause the Company to exceed the permitted total leverage ratios under the credit agreement. Under any such scenario, the Company may pay down the outstanding borrowings from cash to maintain compliance with its financial covenants.

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The cyclical nature of the semiconductor industry makes it very difficult for us to predict future liquidity requirements with certainty. Any upturn in the semiconductor industry may result in short-term uses of cash in operations as cash may be used to finance additional working capital requirements such as accounts receivable and inventories. Alternatively, continuation or further softening of demand for our products may cause us to fund additional losses in the future. At some point in the future we may require additional funds to support our working capital and operating expense requirements or for other purposes. We may seek to raise these additional funds through public or private debt or equity financings, or the sale of assets. These financings may not be available to us on a timely basis, if at all, or, if available, on terms acceptable to us or not dilutive to our shareholders. If we fail to obtain acceptable additional financing, we may be required to reduce planned expenditures or forego investments, which could reduce our revenues, increase our losses, and harm our business.

4.   Significant Accounting Policies:

Basis of Preparation

The accompanying consolidated financial statements include the accounts of Asyst and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. Minority interest represents the minority shareholders’ proportionate share of the net assets and results of operations of our majority-owned joint venture, ASI, and our majority-owned subsidiary, Asyst Japan, Inc. (“AJI”.)

Effective as of February 18, 2005, we changed our fiscal year-end date from the last Saturday in March to March 31. Accordingly, fiscal years 2005 and 2006 ended on March 31, 2005 and 2006, respectively, and fiscal year 2004 ended on March 27, 2004. For convenience of presentation and comparison to current and prior fiscal years ended March 31, we refer throughout this report to a fiscal year ended March 31, 2004. However, all references to our fiscal year ended March 31, 2004 mean our actual fiscal year ended March 27, 2004.

Revisions to Prior Year Financial Statements

The classification of certain prior year amounts in the consolidated financial statements and the notes thereto has been revised where necessary to conform to the current year’s presentation. In particular, we have revised the classification of certain auction rate securities, for which interest rates reset in less than three months, but for which the maturity date is longer than three months. This resulted in a revision in the consolidated statements of cash flows for the fiscal years ended March 31, 2005 and 2004, to reflect the gross purchases and sales of these securities as investing activities rather than as a component of cash and cash equivalents (see Note 5). The revisions did not have an effect on the prior periods’ net loss or cash flow from operations.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include revenues and costs under long-term contracts, collectibility of accounts receivable, obsolescence of inventory, cost of product warranties, recoverability of depreciable assets, intangibles and deferred tax assets and the adequacy of acquisition-related and restructuring reserves. Although we regularly assess these estimates, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.

Foreign Currency Translation

Our subsidiaries located in Japan and their subsidiaries operate using the Japanese Yen as their functional currency. Accordingly, all assets and liabilities of these subsidiaries are translated using exchange rates in effect at the end of the period, and revenues and costs are translated using average exchange rates for the period. The

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

resulting translation adjustments are presented as a separate component of accumulated other comprehensive income (loss).

All other foreign subsidiaries use the U.S. dollar as their functional currency. Accordingly, assets and liabilities of those subsidiaries are translated using exchange rates in effect at the end of the period, except for non-monetary assets, such as inventories and property, plant and equipment that are translated using historical exchange rates. Revenues and costs are translated using average exchange rates for the period, except for costs related to those balance sheet items that are translated using historical exchange rates. The resulting translation gains and losses are included in the Consolidated Statements of Operations as incurred.

Cash and Cash Equivalents

We consider all highly liquid investments with an original or remaining maturity of three months or less from the date of purchase to be cash equivalents. The carrying value of the cash equivalents approximates their current fair market value.

Short-term Investments

As of March 31, 2006, our short-term investments consisted of equity securities and debt investments with maturities, at the time of purchase, greater than three months. Auction rate debt securities with interest rates that reset in less than three months but with maturity dates longer than three months, are classified as short-term investments. All such investments have been classified as “available-for-sale” and are carried at fair value. Unrealized holding gains and losses, net of taxes reported, are recorded as a component of other comprehensive income (loss). The cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization, interest income, realized gains and losses and declines in value that are considered to be other than temporary, are included in interest and other income (expense), net, in the Consolidated Statements of Operations. There have been no declines in value that are considered to be other than temporary for any of the three years in the period ended March 31, 2006. The cost of investments sold is based on specific identification. We do not intend to hold individual securities for greater than one year.

Fair Value of Financial Instruments

The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable, short-term notes payable, and accounts payable and accrued expenses, approximate fair value due to the short maturities of these financial instruments. At March 31, 2006, the carrying amount of long-term debt, including current portion, was $88.5 million and the estimated fair value was $81.5 million. At March 31, 2005, the carrying amount of long-term debt, including current portion, was $91.5 million and the estimated fair value was $90.6 million. The estimated fair value of long-term debt is based primarily on quoted market prices for the same or similar issues.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentration of credit risk consist primarily of trade receivables, cash equivalents and short-term investments in treasury bills, certificates of deposit and commercial paper. We restrict our investments to repurchase agreements with major banks, U.S. government and corporate securities, and mutual funds that invest in U.S. government securities, which are subject to minimal credit and market risk. Our customers are concentrated in the semiconductor and flat panel display industries, and relatively few customers account for a significant portion of our revenues. We regularly monitor the credit worthiness of our customers and believe that we have adequately provided for exposure to potential credit losses. During fiscal year 2006, Taiwan Semiconductor Manufacturing Corp. accounted for 12 percent of net sales. During fiscal year 2005, AU Optronics Corp. and Taiwan Semiconductor Manufacturing Corp. accounted for approximately 20 percent and 12 percent of net sales, respectively. During fiscal year 2004, L.G. Philips and Taiwan Semiconductor

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Manufacturing Corp. accounted for approximately 18 percent and 10 percent of net sales, respectively. No customers accounted for more than 10 percent of our total billed and unbilled accounts receivable at March 31, 2006 and 2005, respectively.

Allowance for Doubtful Accounts

We estimate our allowance for doubtful accounts based on a combination of specifically identified amounts, as well as a portion of the reserve calculated based on the aging of receivables. If circumstances change (such as an unexpected material adverse change in a major customer’s ability to meet its financial obligations to us or its payment trends), we may adjust our estimates of the recoverability of amounts due to us.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market and include materials, labor and manufacturing overhead costs. Provisions, when required, are made to reduce excess and obsolete inventories to their estimated net realizable values. Such provisions, once established, are not reversed until the related inventories have been sold or scrapped.

Goodwill and Other Intangible Assets

Intangible assets subject to amortization are being amortized over the following estimated useful lives using the straight-line method: purchased technology, three to eight years; customer lists and other intangible assets, five to 10 years; and licenses and patents, five to 10 years.

We have completed annual impairment tests in accordance with SFAS No. 142 during the quarter ended December 31, 2006, 2005 and 2004, respectively, and concluded that there was no impairment of goodwill in fiscal years 2006, 2005 and 2004. To determine the amount of any possible impairment, we estimated the fair value of our reporting units that contained goodwill (based primarily on expected future cash flows), reduced the amount by the fair value of identifiable intangible assets other than goodwill (also based primarily on expected future cash flows), and then compared the unallocated fair value of the business to the carrying value of goodwill. To the extent goodwill exceeded the unallocated fair value of the business; an impairment expense would have been recognized. In connection with the annual impairment analysis for goodwill, we also assessed the recoverability of the intangible assets subject to amortization in accordance with SFAS No. 144 and concluded that there was no impairment of intangible assets.

Property and Equipment

Property and equipment are recorded at cost or in the case of property and equipment purchased through corporate acquisitions at fair value based upon the allocated purchase price on the acquisition date. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. The useful lives of our property and equipment are as follows:

Land	none
Buildings	38 to 50 years
Leasehold improvements	7 years or lease term, if shorter
Machinery and equipment	2 to 5 years
Office equipment, furniture and fixtures	5 years

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Warranty Reserve

We provide for the estimated cost of product warranties at the time revenue is recognized. The table below summarizes the movement in the warranty reserve for the fiscal years ended March 31, 2006, 2005 and 2004 (in thousands):

	Fiscal Year Ended March 31,
	2006			2005			2004
Beginning Balance	$	13,509		$	8,185		$	7,561
Reserve for warranties issued during the period		10,338			19,780			4,881
Settlements made (in cash or in kind)		(14,966	)		(14,443	)		(4,257	)
Foreign currency translation		(914	)		(13	)		—
Ending Balance	$	7,967		$	13,509		$	8,185

Revenue Recognition

We recognize revenue when persuasive evidence of an arrangement exists, product delivery has occurred or service has been rendered, the seller’s price is fixed or determinable, and collectibility is reasonably assured. Some of our products are large volume consumables that are tested to industry and/or customer acceptance criteria prior to shipment and delivery. Our primary shipping terms are FOB shipping point. Therefore, revenue for these types of products is recognized when title transfers. Certain of our product sales are accounted for as multiple-element arrangements. We allocate consideration to multiple element transactions based on relative objective evidence of fair values, which we determine based on prices charged for such items when sold on a stand alone basis. If we have met defined customer acceptance experience levels with both the customer and the specific type of equipment, we recognize the product revenue at the time of shipment and transfer of title, with the remainder when the other elements, primarily installation, have been completed. Some of our other products are highly customized systems and cannot be completed or adequately tested to customer specifications prior to shipment from the factory. We do not recognize revenue for these products until formal acceptance by the customer. Revenue for spare parts sales is recognized at the time of shipment and the transfer of title. Deferred revenue consists primarily of product shipments creating legally enforceable receivables that did not meet our revenue recognition policy. Revenue related to maintenance and service contracts is recognized ratably over the duration of the contracts. Unearned maintenance and service contract revenue is not significant and is included in accrued liabilities and other.

We recognize revenue for long-term contracts at ASI in accordance with the American Institute of Certified Public Accountants’ (“AICPA”) Statement of Position (“SOP”) 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts. We use the percentage of completion method to calculate revenue and related costs of these contracts because they are long-term in nature and estimates of cost to complete and extent of progress toward completion of long-term contracts are available and reasonably dependable. We record revenue and unbilled receivables each period based on the percentage of completion to date on each contract, measured by costs incurred to date relative to the total estimated costs of each contract. Unbilled receivables amount is reclassified to trade receivables once invoice is issued. We disclose material changes in our financial results that result from changes in estimates.

We account for software revenue in accordance with the AICPA SOP 97-2, Software Revenue Recognition.  Revenue for integration software work is recognized on a percentage-of-completion basis. Software license revenue, which is not material to the consolidated financial statements, is recognized when persuasive evidence of an arrangement exists, delivery has occurred or, the selling price is fixed or determinable and collectibility is probable.

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Income Taxes

The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of our assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

We have completed the analysis of the impact of the one-time favorable foreign dividend provision recently enacted as part of the American Jobs Creation Act of 2004. Based on the analysis performed, we have decided not to take actions by repatriating our foreign earnings at the current moment. As of March 31, 2006, and based on the tax laws in effect at that time, we intended to continue to indefinitely reinvest our undistributed foreign earnings and accordingly, no deferred tax liability has been recorded on these undistributed foreign earnings.

The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. The Company recognizes potential liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result.

Net Income (Loss) Per Share

Basic net income (loss) per share is computed using the weighted average number of common shares outstanding, while diluted net income (loss) per share is computed using the sum of the weighted average number of common and common equivalent shares outstanding. Common equivalent shares used in the computation of diluted earnings per share result from the assumed exercise of stock options and warrants, using the treasury stock method. For periods for which there is a net loss, the numbers of shares used in the computation of diluted net income (loss) per share are the same as those used for the computation of basic net income (loss) per share as the inclusion of dilutive securities would be anti-dilutive.

	Fiscal Year Ended March 31,
	2006			2005			2004
				(As restated)			(As restated)
Basic and diluted net loss per share:
Numerator:
Net loss	$	(104	)	$	(17,743	)	$	(82,616	)
Denominator:
Weighted average common shares outstanding, excluding unvested restricted stock units		47,972			47,441			41,805
Denominator for basic and diluted calculation		47,972			47,441			41,805
Net loss per share, basic and diluted	$	(0.00	)	$	(0.37	)	$	(1.98	)

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes securities outstanding which were not included in the calculation of diluted net loss per share as to do so would be anti-dilutive (in thousands):

	Fiscal Year Ended March 31,
	2006		2005		2004
Restricted stock awards and units		9		136		59
Stock options		6,879		6,827		8,212
Convertible notes		5,682		5,682		5,682
Total		12,570		12,645		13,953

Stock-Based Compensation

We account for employee stock-based compensation arrangements in accordance with the provisions of Accounting Principles Board Opinion (“APB”) No. 25, Accounting for Stock Issued to Employees, Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 44, Accounting for Certain Transactions Involving Stock Compensation, an Interpretation of APB Opinion No. 25 and FIN No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans, and comply with the disclosure provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, Accounting for Stock-Based Compensation, and SFAS No. 148, Accounting for Stock Based Compensation — Transition and Disclosure — an amendment of FAS No. 123. Under APB No. 25, compensation expense is based on the difference, if any, on the date of grant, between the estimated fair value of our common stock and the exercise price. SFAS No. 123 defines a fair value based method of accounting for an employee stock option or similar equity instrument. We amortize stock-based compensation using the straight-line method over the remaining vesting periods of the related options, which is generally three years.

The Company has decided to use the Modified Prospective Application (“MPA”) method. By using the MPA, the Company will not restate its prior period financial statements. Instead, the Company applies SFAS 123(R) for new options granted after the adoption of SFAS 123(R), i.e. April 1, 2006, and any portion of options that were granted after December 15, 1994 and have not vested by April 1, 2006. The Company uses a Black-Scholes option pricing model for calculating its option grant date fair value under SFAS 123(R).

We account for equity instruments issued to non-employees in accordance with the provisions of SFAS No. 123 and the Emerging Issues Task Force (“EITF”) 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services and value awards using the Black-Scholes option pricing model as of the date at which the non-employees performance is complete. We recognize the fair value of the award as a compensation expense as the non-employees interest in the instrument vests.

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Had compensation expense for our stock options, employee stock purchase plan and the restricted stock issuances been determined based on the fair value of the grant date for awards in fiscal years 2006, 2005 and 2004 consistent with the provision of SFAS No. 123, and SFAS No. 148, our net loss for fiscal years 2006, 2005 and 2004 would have increased to the pro forma amounts indicated below (in thousands, except per share amounts):

	Fiscal Year Ended March 31,
	2006			2005			2004
				(As restated)			(As restated)
Net loss — as reported	$	(104	)	$	(17,743	)	$	(82,616	)
Add: employee stock-based compensation expense included in reported net loss, net of tax		1,819			2,376			3,089
Less: total employee stock-based compensation expense determined under fair value, net of tax		(6,838	)		(12,383	)		(14,436	)
Net loss — as adjusted	$	(5,123	)	$	(27,750	)	$	(93,963	)
Basic and diluted net loss per share — as reported	$	(0.00	)	$	(0.37	)	$	(1.98	)
Basic and diluted net loss per share — as adjusted	$	(0.11	)	$	(0.58	)	$	(2.25	)
SHARES USED IN THE PER SHARE CALCULATION:
Basic and diluted		47,972			47,441			41,805

Recent Accounting Pronouncements

In November 2004, the FASB issued SFAS No. 151, Inventory Costs — an Amendment of ARB No. 43, Chapter 4 (“SFAS No. 151”). SFAS No. 151 amends ARB 43, Chapter 4, to clarify those abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) that should be recognized as current-period charges. In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The provisions of this Statement are effective for inventory costs incurred during fiscal years beginning after June 15, 2005. We do not believe the impact of the adoption of the provisions of SFAS No. 151 will materially impact our financial position or results of operations.

In December 2004, the FASB issued SFAS No. 153, Exchange of Nonmonetary Assets — an amendment of APB Opinion No. 29 (“SFAS No. 153”). SFAS No. 153 amends APB Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of this Statement are effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of the provisions of SFAS No. 153 did not have a material impact on our financial position or results of operations.

In December 2004, the FASB issued SFAS No. 123(R), which replaces SFAS No. 123, “Accounting for Stock-Based Compensation,” and supersedes APB Opinion No. 25. Under SFAS No. 123(R), companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In April 2005, the SEC postponed the implementation date to the fiscal year beginning after June 15, 2005. The Company will adopt SFAS No. 123(R) in the first quarter of fiscal 2007.

The Company has decided to use the Modified Prospective Application (“MPA”) method. By using the MPA, the Company will not restate its prior period financial statements. Instead, the Company applies SFAS 123(R) for

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

new options granted after the adoption of SFAS 123(R), i.e. April 1, 2006, and any portion of options that were granted after December 15, 1994 and have not vested by April 1, 2006. The Company uses a Black-Scholes option pricing model for calculating its option grant date fair value under SFAS 123(R).

The adoption of SFAS No. 123(R) will have a significant adverse impact on the Company’s results of operations, although it will have no impact on its overall financial position. SFAS No. 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. While the Company cannot estimate what those amounts will be in the future (because they depend on, among other things, when employees exercise stock options), the amount of operating cash flows recognized for such excess tax deductions was zero for fiscal years 2006, 2005 and 2004.

In March 2005, the SEC issued Staff Accounting Bulletin (“SAB”) No. 107, which provides guidance on the implementation of SFAS No. 123(R), “Share-Based Payment” (see discussion below). In particular, SAB No. 107 provides key guidance related to valuation methods (including assumptions such as expected volatility and expected term), the accounting for income tax effects of share-based payment arrangements upon adoption of SFAS No. 123(R), the modification of employee share options prior to the adoption of SFAS No. 123(R), the classification of compensation expense, capitalization of compensation cost related to share-based payment arrangements, first-time adoption of SFAS No. 123(R) in an interim period, and disclosures in Management’s Discussion and Analysis subsequent to the adoption of SFAS No. 123(R). SAB No. 107 became effective on March 29, 2005. It did not have a material impact on the Company’s financial position or results of operations.

In June 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections: a Replacement of Accounting Principles Board Opinion No. 20 (“APB 20”) and FASB Statement No 3 (“SFAS No. 154”.) SFAS No. 154 requires retrospective application for voluntary changes in accounting principle unless it is impracticable to do so. Retrospective application refers to the application of a different accounting principle to previously issued financial statements as if that principle had always been used. SFAS No. 154’s retrospective-application requirement replaces APB 20’s requirement to recognize most voluntary changes in accounting principle by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. This Statement defines retrospective application as the application of a different accounting principle to prior accounting periods as if that principle had always been used or as the adjustment of previously issued financial statements to reflect a change in the reporting entity. This Statement also redefines restatement as the revising of previously issued financial statements to reflect the correction of an error. The requirements are effective for accounting changes made in fiscal years beginning after December 15, 2005 and will only impact the consolidated financial statements in periods in which a change in accounting principle is made.

In October 2005, the FASB issued FASB Staff Position (“FSP”) No. FAS 13-1, Accounting for Rental Costs Incurred during a Construction Period, (“FSP 13-1”). FSP 13-1 addresses the accounting for rental costs associated with operating leases that are incurred during a construction period. The guidance in FSP 13-1 is effective for the first fiscal period after December 15, 2005 and its adoption in the three-month period ended March 31, 2006, did not have a material impact on our financial position or results of operations.

In November 2005, the FASB issued FSP Nos. FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments, (“FSP 115-1 and 124-1”) which addresses the determination as to when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. FSP 115-1 and 124-1 also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. The guidance in FSP 115-1 and 124-1 amends FASB Statements No. 115, Accounting for Certain Investments in Debt and Equity Securities, and No. 124, Accounting for Certain Investments Held by Not-for-Profit Organizations, and APB Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock. The guidance in FSP 115-1 and 124-1 is

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effective for the first fiscal period after December 15, 2005 and its adoption in the three-month period ended March 31, 2006, did not have a material impact on our financial position or results of operations.

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes: An Interpretation of FASB Statement No. 109 (FIN No. 48). This interpretation clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS No. 109. FIN No. 48 prescribes a recognition threshold and measurement principles for the financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. This interpretation is effective for fiscal years beginning after December 15, 2006 and as such, the Company will adopt FIN No. 48 in the year ended March 31, 2007. We are currently assessing the impact the adoption of FIN No. 48 will have on our financial position or results of operations.

In June 2006, the FASB ratified the Emerging Issues Task Force (EITF) consensus on EITF Issue No. 06-2, “Accounting for Sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement No. 43” (EITF 06-2). EITF 06-2 requires companies to accrue the cost of such compensated absences over the requisite service period. The company currently accounts for the cost of compensated absences for sabbatical programs when the eligible employee completes the requisite service period, which is 10 to 20 years of service. The company is required to apply the provisions of EITF 06-2 at the beginning of fiscal 2008. EITF 06-02 allows for adoption through retrospective application to all prior periods or through a cumulative effect adjustment to retained earnings if it is impracticable to determine the period-specific effects of the change on prior periods presented. The company is currently evaluating the financial impact of this guidance and the method of adoption which will be used.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108 (“SAB No. 108”). SAB No. 108 addresses the process and diversity in practice of quantifying financial statement misstatements resulting in the potential build up of improper amounts on the balance sheet. We will be required to adopt the provisions of SAB No. 108 in the year ending March 31, 2007. We currently do not believe that the adoption of SAB No. 108 will have a material impact on our financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, (“SFAS No. 157”). SFAS No. 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements. The changes to current practice resulting from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. The Statement is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. We do not believe that the adoption of the provisions of SFAS No. 157 will materially impact our financial position or results of operations.

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R), (“SFAS No. 158”). SFAS No. 158 requires an employer to recognize the over-funded or under-funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position. To recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. The provisions of this Statement are effective for an employer with publicly traded equity securities are required to recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. We do not believe that the adoption of the provisions of SFAS No. 158, in the year ending March 31, 2007, will materially impact our financial position or results of operations.

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5.   Balance Sheet Components:

Cash and Cash Equivalents

We consider all highly liquid investments with an original or remaining maturity of three months or less from the date of purchase to be cash equivalents. The carrying value of the cash equivalents approximates their current fair market value.

Cash equivalents as end of March 31, 2006 and 2005, by type are as follows (in thousands):

			Unrealized
2006	Cost		Gains (Losses)			Fair Value
Institutional money market funds	$	19,656	$	100		$	19,756
Commercial paper		2,994		(1	)		2,993
Total cash equivalents	$	22,750	$	99		$	22,749

			Unrealized
2005	Cost		Loss			Fair Value
Institutional money market funds	$	5,280	$	—		$	5,280
Commercial paper		4,995		(1	)		4,994
Total cash equivalents	$	10,275	$	(1	)	$	10,274

Short-term Investments

Short-term investments by security type are as follows (in thousands):

			Unrealized
	Cost		Loss			Fair Value
March 31, 2006
Auction rate securities	$	8,300	$	—		$	8,300
Corporate debt securities		6,014		(9	)		6,005
Federal agency notes		1,000		(1	)		999
	$	15,314	$	(10	)	$	15,304
March 31, 2005
Auction rate securities	$	19,803	$	—		$	19,803
Corporate debt securities		9,915		(47	)		9,868
Municipal debt securities		501		(1	)		500
International debt securities		1,009		(2	)		1,007
Federal agency notes		15,000		(92	)		14,908
	$	46,228	$	(142	)	$	46,086

Contractual maturities of available-for-sale debt securities as of March 31, 2006 were as follows (in thousands):

Due within one year	$	12,064
Due within 39 years		3,250
Total	$	15,314

All of the investments in the table above were in a continuous unrealized loss position for less than twelve months and these unrealized losses were considered not to be other-than-temporary due primarily to their nature,

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quality and short-term holding. None of the investments in the table above had unrealized gains as of March 31, 2006 and 2005.

As more fully described in Note 4 the following table summarizes the cash and cash equivalents balances as previously reported in the Consolidated Statements of Cash Flows and as revised as of March 31, 2004 (in thousands):

	As Reported		As Revised
	Cash and Cash		Cash and Cash
	Equivalents		Equivalents
March 31, 2004	$	101,907	$	76,407

As a result of these changes, we revised the following line items in the Consolidated Statements of Cash Flows for the years ended March 31, 2005 and 2004 (in thousands):

	As Reported								As Revised
				Sales/								Sales/
	Purchase of			Maturities of					Purchase of			Maturities of
	Available for			Available for					Available for			Available for
Fiscal Year Ended	Sale Securities			Sale Securities		Net			Sale Securities			Sale Securities		Net
March 31, 2005	$	(71,594	)	$	41,059	$	(30,535	)	$	(84,744	)	$	79,709	$	(5,035	)
March 31, 2004	$	(12,962	)	$	8,500	$	(4,462	)	$	(38,462	)	$	8,500	$	(29,962	)

Accounts Receivable, net of allowance for doubtful accounts

Accounts receivable, net of allowance for doubtful accounts were as follows (in thousands):

	March 31,
	2006			2005
Trade receivables	$	83,008		$	77,196
Trade receivables-related party		90			100
Unbilled receivables		63,435			110,778
Other receivables		6,788			8,849
Less: Allowance for doubtful accounts		(11,868	)		(6,980	)
Total	$	141,453		$	189,943

We estimate our allowance for doubtful accounts based on a combination of specifically identified amounts and an additional reserve calculated based on the aging of receivables. The additional reserve is provided for the remaining accounts receivable after specific allowances at a range of percentages from 1.25 percent to 100.0 percent based on the aging of receivables. If circumstances change (such as an unexpected material adverse change in a major customer’s ability to meet its financial obligations to us or its payment trends), we may adjust our estimates of the recoverability of amounts due to us. During the fiscal year ended March 31, 2006, we wrote off $1.2 million of accounts receivable which we determined to be uncollectible and for which we had recorded specific reserves in previous quarters. We do not record interest on outstanding and overdue accounts receivable.

All of our unbilled receivables are from our majority-owned joint venture, ASI. Payments related to these unbilled receivables are expected to be received within one year from March 31, 2006 and as such the balances are classified within current assets on our consolidated balance sheet.

Other receivables include notes receivable from customers in Japan and Korea in settlement of trade accounts receivable balances.

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We offer both open accounts and letters of credit to our customer base. Our standard open account terms range from net 30 days to net 90 days; however, the customary local industry practices may differ and prevail where applicable.

Our subsidiaries in Japan, AJI and ASI have agreements with certain Japanese financial institutions to sell certain trade receivables. For the fiscal years ended March 31, 2006 and 2005, AJI and ASI combined sold approximately $77.8 million and $46.6 million, respectively, of accounts receivable without recourse, and $1.4 million and $0.4 million, respectively, with recourse. At March 31, 2006, the Company had approximately $1.4 million of borrowings, secured by accounts receivable balances, for which the Company did not meet the true sale criteria.

Inventories

Inventories consisted of the following (in thousands):

	March 31,
	2006		2005
Raw materials	$	9,882	$	14,040
Work-in-process		22,180		17,905
Finished goods		1,157		1,570
Total	$	33,219	$	33,515

At March 31, 2006 and 2005, we had a reserve of $13.3 million and $15.3 million, respectively, for estimated excess and obsolete inventory.

We outsourced a majority of our Fab Automation Product manufacturing to Solectron Corporation (“Solectron.”) As part of the arrangement, Solectron purchased inventory from us and we may be obligated to reacquire inventory purchased by Solectron for our benefit if the inventory is not used over certain specified period of time per the terms of our agreement. No revenue was recorded for the sale of this inventory to Solectron and any inventory buyback in excess of our demand forecast is fully reserved. At March 31, 2006 and 2005, total inventory held by Solectron was $13.0 million and $14.5 million, respectively. During the fiscal years ended March 31, 2006 and 2005, we repurchased $14.1 million and $7.1 million of this inventory, respectively, that was not used by Solectron in manufacturing our products.

Prepaid expenses and other

Prepaid expenses and other consisted of the following (in thousands):

	March 31,
	2006		2005
Prepaid expenses	$	7,078	$	3,146
Deferred tax assets		16,886		16,379
Other		2,867		14,446
Total	$	26,831	$	33,971

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Intangible assets

Intangible assets were as follows (in thousands):

	March 31, 2006						March 31, 2005
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
	Amount		Amortization		Net		Amount		Amortization		Net
Amortizable intangible assets:
Developed technology	$	58,289	$	44,275	$	14,014	$	62,626	$	34,069	$	28,557
Customer base and other intangible assets		31,935		29,419		2,516		33,767		25,167		8,600
Licenses and patents		6,316		3,512		2,804		6,989		3,248		3,741
Total	$	96,540	$	77,206	$	19,334	$	103,382	$	62,484	$	40,898

Amortization expense was $16.6 million, $20.4 million and $20.2 million for the years ended March 31, 2006, 2005 and 2004, respectively.

Expected future intangible amortization expense, based on current balances is as follows (in thousands):

Fiscal Year ending March 31,
2007	$	11,920
2008		5,939
2009		677
2010		317
2011 and thereafter		481
	$	19,334

Goodwill

Goodwill balances by segment were as follows (in thousands):

	Fab Automation		AMHS			Total
Balance at March 31, 2005	$	3,397	$	60,617		$	64,014
Foreign currency translation		—		(5,174	)		(5,174	)
Balances at March 31, 2006	$	3,397	$	55,443		$	58,840

The changes in the carrying amount of goodwill for the years ended March 31, 2006 and 2005, respectively, are as follows (in thousands):

Balances at March 31, 2004	$	71,973
Purchase accounting adjustments		(6,953	)
Foreign currency translation		(1,006	)
Balances at March 31, 2005		64,014
Foreign currency translation		(5,174	)
Balances at March 31, 2006	$	58,840

The purchase accounting adjustments in fiscal 2005 were primarily for the adjustment of deferred tax asset valuation allowance relating to pre-acquisition deferred tax assets.

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Property and Equipment

Depreciation expense was $5.8 million, $6.8 million and $8.7 million for the fiscal years ended March 31, 2006, 2005 and 2004, respectively. Property and equipment consisted of the following (in thousands):

	March 31,
	2006			2005
Land	$	2,115		$	2,312
Buildings		7,332			8,231
Leasehold improvements		21,174			12,608
Machinery and equipment		29,325			28,050
Office equipment, furniture and fixture		36,377			34,947
Sub-total		96,323			86,148
Less accumulated depreciation		(73,215	)		(70,690	)
Total	$	23,108		$	15,458

Accrued and other liabilities

Accrued and other liabilities consisted of the following (in thousands):

	March 31,
	2006		2005
			(As restated)
Income taxes payable	$	23,818	$	18,378
Other taxes payable		405		5,877
Warranty reserve		7,967		13,509
Contract loss reserve		—		248
Restructuring reserve		105		883
Employee compensation		9,308		8,822
Customer deposits		1,984		2,918
Other accrued expenses		19,315		20,010
Total	$	62,902	$	70,645

Other long-term liabilities

Other long-term liabilities consisted of the following (in thousands):

	March 31,
	2006		2005
Accrued pension benefit liability	$	6,975	$	9,463
Lease Incentive		3,747		—
Other		252		308
Total	$	10,974	$	9,771

Accumulated Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners

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and distributions to owners and is to include unrealized gains and losses that have historically been excluded from net loss and reflected instead in equity. The following table presents our accumulated other comprehensive income (loss) items (in thousands):

	March 31,
	2006		2005
Unrealized gain (losses) on investments	$	89	$	(142	)
Foreign currency translation adjustments		665		7,611
Accumulated other comprehensive income	$	754	$	7,469

6.   Restructuring and Other Charges (Credits):

Restructuring and other charges accrual and the related utilization for the fiscal years ended March 31, 2006, 2005 and 2004 were (in thousands):

	Severance and			Excess			Fixed Assets
	Benefits			Facilities			Impairment			Total
Balance, March 31, 2003	$	291		$	3,617		$	192		$	4,100
Additional (reduction in) accruals		5,460			1,075			46			6,581
Non-cash related utilization		70			(444	)		(205	)		(579	)
Amounts paid in cash		(5,757	)		(2,058	)		(33	)		(7,848	)
Balance, March 31, 2004		64			2,190			—			2,254
Additional (reduction in) accruals		1,803			7			—			1,810
Amounts paid in cash		(1,803	)		(1,390	)		—			(3,193	)
Foreign currency translation adjustment		3			9			—			12
Balance, March 31, 2005		67			816			—			883
Additional (reduction in) accruals		(7	)		(39	)		—			(46	)
Non-cash related utilization		(60	)		(96	)		—			(156	)
Amounts paid in cash		—			(573	)		—			(573	)
Foreign currency translation adjustment		—			(3	)		—			(3	)
Balance, March 31, 2006	$	—		$	105		$	—		$	105

During fiscal year 2006, we experienced certain minor changes in estimates to our restructuring and other charges accrual as a result of completion of various lease and sub-lease agreements, as well as final payments and adjustments on severance and benefit programs that were included in prior restructurings. The outstanding accrual balance of $0.1 million at March 31, 2006 consists of future lease obligations on operating leases which will be paid over the next two fiscal years. All remaining accrual balances are expected to be settled in cash.

In fiscal year 2005, we recorded net severance and other charges of $1.8 million, primarily for severance costs from a reduction in workforce in December 2004. In December 2004, we announced a restructuring initiative in our Fab Automation reporting segment, which involved the termination of employment of approximately 70 employees. The total costs of this restructuring were approximately $1.8 million in termination benefits.

In fiscal year 2004, we recorded net severance and other charges of $5.5 million, primarily related to $3.4 million in severance costs from a reduction in workforce in April 2003, and a $1.0 million charge related to the settlement and release of claims arising from the termination of a former officer. Included also were $1.1 million of severance expenses, primarily from headcount reductions in our Japanese operations. In addition to the severance charges, we recorded $1.1 million for exiting a facility in connection with our restructuring activities and for future

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lease obligations on a vacated facility in excess of estimated future sublease proceeds. As a result of these restructuring activities, we terminated the employment of approximately 245 employees from our U.S. as well as international operations.

7.   Asset Impairment Charges:

In conjunction with the restructuring in fiscal 2005, we had removed from service and made available for sale certain land and a building owned by AJI. The building had been underutilized since a prior decision to outsource the manufacturing of our next-generation robotics products, part of an overall strategy to outsource the manufacture of all our Fab Automation segment products. As a result, we recorded an impairment charge of $4.6 million to write the assets down to their estimated fair value, based on a market valuation, less cost to sell. We accounted for these assets as held-for-sale under SFAS No. 144.

In the third quarter of fiscal year 2006, we re-evaluated the status of the AJI facility discussed above and based on an assessment of our expected future business needs, we reclassified the assets, as held-and-used.

In the fiscal year ended March 31, 2004, we completed the sale of land in Fremont, California. The net proceeds from the sale were $12.1 million. We had intended to construct corporate headquarters facilities on the land and subsequently decided not to build these facilities. In fiscal year 2004, we recorded a $6.9 million write-down based on our latest estimate of market value as supported by the pending sale agreement at the time.

8.   Income Taxes:

The provision for (benefit from) income taxes is based upon income (loss) before income taxes, minority interest and discontinued operations as follows (in thousands):

	Fiscal Year Ended March 31,
	2006			2005			2004
Domestic	$	(18,553	)	$	(25,004	)	$	(72,995	)
Foreign		51,792			6,446			(20,129	)
	$	33,239		$	(18,558	)	$	(93,124	)

The provision for (benefit from) income taxes consisted of (in thousands):

	Fiscal Year Ended March 31,
	2006			2005			2004
Current:
Federal	$	(537	)	$	(334	)	$	—
State		41			—			31
Foreign		22,671			15,388			2,272
Total Current		22,175			15,054			2,303
Deferred:
Federal		—			—			—
State		—			—			—
Foreign		(3,429	)		(16,970	)		(8,453	)
Total Deferred		(3,429	)		(16,970	)		(8,453	)
Total provision for (benefit from) income taxes	$	18,746		$	(1,916	)	$	(6,150	)

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The provision for (benefit from) income taxes is reconciled with the Federal statutory rate as follows:

	Fiscal Year Ended March 31,
	2006			2005			2004
Tax provision (or benefit) at federal statutory rate		35.0	%		(35.0	)%		(35.0	)%
State taxes, net of Federal benefit		0.1	%		(3.9	)%		(5.7	)%
Foreign income and withholding taxes in excess of statutory rate		3.4	%		(20.7	)%		0.9	%
Non-deductible expenses and other		(1.4	)%		(1.4	)%		(0.8	)%
Change in valuation allowance		19.3	%		50.7	%		40.0	%
Effective income tax rate		56.4	%		(10.3	)%		(6.6	)%

The components of the net deferred tax assets and liabilities are as follows (in thousands):

	Fiscal Year Ended March 31,
	2006			2005
				(As restated)
Net operating loss and credit carryforwards	$	110,479		$	106,353
Reserves and accruals		36,975			40,089
Depreciation and Amortization		2,360			2,612
Capitalized R&D		2,971			3,506
Gross deferred tax assets		152,785			152,560
Valuation allowance		(132,666	)		(130,211	)
Net deferred tax assets	$	20,119		$	22,349
Deferred tax liabilities:
Intangible assets	$	(6,022	)	$	(12,748	)

At March 31, 2006, we had federal and state net operating losses of $275.4 million and $76.8 million, respectively. The federal net operating losses expire at various dates beginning 2012 through March 2026. The state net operating losses expire at various dates through 2016. Approximately $17 million of net operating losses relate to stock options which when realized will be credited primarily to equity.

At March 31, 2006, we had federal and state research and development tax credits of $4.1 million and $4.3 million, respectively. The federal research and development tax credits will begin to expire in 2022, while the state research and development tax credits may be carried forward indefinitely.

Utilization of the net operating losses and credit carryovers may be subject to a substantial annual limitation due to the ownership change limitation provided be the Internal Revenue Code of 1986, as amended and similar state provisions. The annual limitation may result in the expiration of net operating loss and credit carry forwards before utilization.

Based on the available objective evidence, we cannot conclude that it is more likely than not that the U.S. deferred tax assets, including the net operating losses, will be realizable. Accordingly, we have provided a full valuation allowance against the U.S. deferred tax assets at March 31, 2006.

Undistributed earnings of our foreign subsidiaries are indefinitely reinvested in foreign operations. No provision has been made for taxes that might be payable upon remittance of such earnings, nor is it practicable to determine the amount of this liability.

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9.   Debt:

We had $1.4 million of short-term debt issued by banks in Japan as of March 31, 2006, owed by our Japanese subsidiary, AJI and was guaranteed by the Company in the United States. As of March 31, 2006, the interest rate ranged from 1.4 percent to 2.0 percent. Substantially all of the debt is guaranteed by Asyst in the United States.

Long-term debt and capital leases consisted of the following (in thousands):

	March 31,
	2006			2005
Convertible subordinated notes	$	86,250		$	86,250
Long-Tern loans		1,762			4,397
Capital leases		524			860
Total long-term debt		88,536			91,507
Less: Current portion of long-term debt and capital leases		(1,368	)		(2,757	)
Long-term debt and capital leases net of current portion	$	87,168		$	88,750

At March 31, 2006, maturities of all long-term debt and capital leases are as follows (in thousands):

Fiscal Year Ending March 31,	Amount
2007	$	1,368
2008		724
2009		86,444
2010 and thereafter		—
	$	88,536

Convertible Subordinated Notes

On July 3, 2001, we completed the sale of $86.3 million of 53/4 percent convertible subordinated notes that resulted in aggregate proceeds of $82.9 million to us, net of issuance costs. The notes are convertible, at the option of the holder, at any time on or prior to maturity into shares of our common stock at a conversion price of $15.18 per share, which is equal to a conversion rate of 65.8718 shares per $1,000 principal amount of notes. The notes mature on July 3, 2008, pay interest on January 3 and July 3 of each year and are redeemable at par and at our option after July 3, 2004. Debt issuance costs of $2.9 million, net of amortization are included in other assets. Issuance costs are being amortized over 84 months and are being charged to other income (expense). Debt amortization costs totaled $0.5 million during each of the fiscal years ended March 31, 2006, 2005 and 2004, respectively.

Asyst received a letter dated August 16, 2006, from U.S. Bank National Association, as trustee under the Indenture related to the notes, which asserts that Asyst is in default under the Indenture because of the delays in filing its Form 10-K for the fiscal year ended March 31, 2006 and Form 10-Q for the fiscal quarter ended June 30, 2006. Asyst does not agree with the trustee’s assertion that the delayed filing of the annual and quarterly reports is a default under the indenture. See Note 15 for further discussion.

Lines of Credit

At March 31, 2006, we had a two-year revolving line of credit with a commercial bank, with a then-current maturity date of July 31, 2007. We amended the line of credit during the first and third quarters of fiscal year 2006. As amended, the maximum borrowing available under the line was $40.0 million; however, only $25.0 million of borrowing was available to us as long as ASI maintained $65.0 million of aggregate available borrowing under its lines of credit in Japan. The line of credit required compliance with certain financial covenants, including a

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

quarterly net income/loss target, calculated on an after-tax basis (excluding depreciation, amortization and other non-cash items), and a requirement that we maintain during the term of the line of credit a minimum cash and cash equivalents balance of $40.0 million held in the U.S., at least $20.0 million of which had to be maintained with the bank. The specific amount of borrowing available under the line of credit at any time, however, could have changed based on the amount of letters of credit the amount of aggregate borrowing by ASI and the cash balance held at the bank. As of March 31, 2006, there was no amount outstanding under the line of credit, but the maximum borrowing had been reduced by $0.8 million with the issuance of a letter of credit during November 2005. We were in compliance with all financial covenants and had available $29.7 million as of March 31, 2006. This line of credit was terminated in July 2006 (see Note 15).

At March 31, 2006, ASI had revolving lines of credit with five Japanese banks. These lines allow aggregate borrowing of up to 7 billion Japanese Yen, or approximately $60 million at the exchange rate as of March 31, 2006. As of March 31, 2006, ASI had no outstanding balance and a total of 7 billion Japanese yen available under these lines of credit. As of March 31, 2005, ASI had outstanding borrowings of 1.4 billion Japanese Yen, or approximately $13.0 million at the exchange rate as of March 31, 2005, which is recorded in short-term debt.

ASI’s lines of credit carry original terms of six months to one year, at variable interest rates based on the Tokyo Interbank Offered Rate (“TIBOR”) which was 0.06 percent at March 31, 2006 plus margins of 0.80 to 1.25 percent. Under the terms of certain of these lines of credit, ASI generally is required to maintain compliance with certain financial covenants, including requirements to report an annual net profit on a statutory basis and to maintain at least 80.0 percent of the equity reported as of its prior fiscal year-end.

ASI was in compliance with these covenants at March 31, 2006. None of these lines requires collateral and none of these lines requires guarantees from us or our subsidiaries in the event of default by ASI. In June 2006, we amended two of these lines of credit representing 4.0 billion Yen, or approximately $34 million, of borrowing capacity to extend the expiry dates to June 30, 2007, at which time all amounts outstanding under these lines of credit will be due and payable, unless the lines of credit are extended.

Our Japanese subsidiary, AJI, has terms loans outstanding with two Japanese banks. These loans are repayable monthly or quarterly through various dates ranging from May 2006 through May 2008. The loans carry annual interest rates between 1.4 to 3.0 percent and substantially all of these loans are guaranteed by the Company in the United States. As of March 31, 2006, AJI had outstanding borrowings of 0.2 billion Japanese Yen or approximately $1.8 million, at exchange rates as of March 31, 2006, that are recorded as short-term and long-term debt.

10.   Common Stock:

As of March 31, 2006, the following shares of our common stock were available for issuance:

Employee Stock Option Plans	1,679,959
Employee Stock Purchase Plan	116,205
	1,796,164

Sale of Equity Securities

No equity securities were sold during fiscal year 2006, other than through exercise of stock options, restricted stock awards or through the Employee Stock Purchase Plan. In November 2003, we sold 6,900,000 shares of our common stock, including exercise of the underwriters’ over-allotment option, at an offering price to the public of $15.17 per share. We received total proceeds of $98.9 million, net of the related issuance fees and costs of $5.7 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Stock Option Plans

We have four stock option plans, the 1993 Employee Stock Option Plan (“the 93 Plan”), the 1993 Non-Employee Directors’ Stock Plan, the 2001 Non-Officer Equity Plan (“the 2001 Plan”) and the 2003 Equity Incentive Plan (“the 2003 Plan”). Under all of our stock option plans, options are currently granted for six year periods and become exercisable ratably typically over a vesting period of three years or as determined by the Board of Directors.

The 1993 Plan was terminated in 2003, and there are no further stock options available for issuance.

The 1993 Non-Employee Directors’ Stock Plan was terminated in 1999, and there are no further stock options available for issuance.

Under the 2001 Plan, adopted in January 2001, there were 2,100,000 shares of common stock which were reserved for issuance. The 2001 Plan provides for the grant of only non-qualified stock options to employees (other than officers or directors) and consultants (not including directors). Under the 2001 Plan, options may be granted at prices not less than the fair market value of our common stock at grant date.

Under the amended 2003 Plan, adopted in August 2005, 3,900,000 shares of common stock are reserved for issuance. The 2003 Plan provides for the grant of non-qualified stock options, incentive stock options and the issuance of restricted stock to employees. Under the 2003 Plan, options may be granted at prices not less than the fair market value of our common stock at grant date.

Total stock-based compensation expenses recorded during fiscal years 2006, 2005 and 2004 consisted of the following (in thousands):

	Fiscal Year Ended March 31,
	2006		2005		2004
			(As restated)		(As restated)
Cost of sales	$	157	$	281	$	267
Research and development		179		406		1,062
Selling, general and administrative		1,834		1,786		2,826
	$	2,170	$	2,473	$	4,155

During the fourth quarter of fiscal year 2005, the Board of Directors approved accelerating the vesting of 394,000 certain outstanding “out-of-the-money” unvested stock options with exercise prices of $10.11 per share granted to employees under the “All Employee Award” program of May 28, 2004. The decision to accelerate vesting of these options was made primarily to avoid recognizing the related compensation cost in future financial statements upon the adoption of SFAS No. 123(R). As these options’ vesting was accelerated in fiscal year 2005, additional compensation cost of $1.8 million, which represented the unamortized cost of accelerated unvested options, was included when calculating the pro forma net loss for disclosure under SFAS No. 123 and SFAS No. 148 for fiscal year 2005 in Note 4.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Activity in our stock option plans is summarized as follows:

	Fiscal Year Ended March 31,
	2006					2005					2004
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Options outstanding, beginning of year		6,819,001		$	10.00		8,176,309		$	11.09		9,210,061		$	12.20
Granted		1,671,083			5.73		1,699,250			7.17		3,014,508			6.67
Exercised		(367,355	)		4.87		(460,148	)		5.64		(1,695,160	)		6.75
Cancelled		(1,246,317	)		10.23		(2,596,410	)		12.35		(2,317,904	)		12.80
Options outstanding, end of year		6,876,412		$	9.19		6,819,001		$	10.00		8,211,505		$	11.05
Exercisable, end of year		4,522,974		$	10.74		4,674,163		$	11.37		4,417,856		$	12.40

In addition, 436,500 shares, 27,286 shares and 886 shares of restricted stock and restricted stock units were granted during fiscal years ended March 31, 2006, 2005 and 2004, respectively, with a weighted average grant-date fair value of $4.00, $10.09 and $8.07 per share, respectively. There were 75,326 shares of restricted stock and restricted stock units issued during the fiscal year ended March 31, 2006, as a result of the lapse in the restriction due to fulfillment of the service period requirement.

The following table summarizes our outstanding and exercisable stock options as of March 31, 2006:

	Options Outstanding						Exercisable Options
			Weighted
			Average		Weighted				Weighted
	Number		Remaining		Average		Number		Average
Range of Exercise Prices	Outstanding		Contractual		Exercise Price		Exercisable		Exercise Price
$ 0.00 - $ 3.95		1,249,039		5.61	$	3.79		640,610	$	3.71
4.13 -   4.94		845,556		5.23		4.72		242,970		4.70
4.98 -   5.05		727,167		6.90		5.04		454,339		5.05
5.09 -   8.02		724,721		6.47		6.45		426,630		6.55
8.19 -   9.65		722,539		5.81		9.08		434,145		8.94
9.75 -  11.25		691,431		6.96		10.26		524,189		10.21
11.30 -  14.25		700,461		5.33		12.95		654,638		12.90
14.40 -  19.06		899,298		5.48		17.32		829,253		17.43
19.38 -  37.31		312,950		4.18		24.57		312,950		24.57
51.38 -  51.38		3,250		4.03		51.38		3,250		51.38
$ 0.00 - $51.38		6,876,412		5.83	$	9.19		4,522,974	$	10.74

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The weighted-average grant date fair value of options during fiscal years ended March 31, 2006, 2005 and 2004 was $5.71, $5.09 and $4.37, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in fiscal years ended March 31, 2006, 2005 and 2004:

	Fiscal Year Ended March 31,
	2006			2005			2004
Risk-free interest rate		4.7	%		3.4	%		3.0	%
Expected term of options (in years)		3.3			4.6			4.7
Expected volatility		83	%		91	%		81	%
Expected dividend yield		0	%		0	%		0	%

The volatility for fiscal year 2006 is a combination of historical volatility for the nine month period ended December 31, 2005 and a combination of historical and implied volatility for the three month period ended March 31, 2006. The volatility for fiscal years 2005 and 2004 was based on historical volatility.

Employee Stock Purchase Plan

Under the 1993 Employee Stock Purchase Plan (the “Plan”), as amended, 2,450,000 shares of common stock are reserved for issuance to eligible employees. The Plan permits employees to purchase common stock through payroll deductions, which may not exceed 10.0 percent of an employee’s compensation, at a price not less than 85.0 percent of the market value of the stock on specified dates. During fiscal years ended March 31, 2006, 2005 and 2004 the number of shares issued under the plan were 240,015, 261,399 and 163,671 shares, respectively. As of March 31, 2006 the number of shares purchased by employees under the Plan totaled 2,335,515.

The weighted-average fair value of stock purchases during fiscal years ended March 31, 2006, 2005 and 2004 was $4.04, $2.41 and $7.69, respectively. The fair value of each stock purchase is calculated on the date of purchase using the Black-Scholes model with the following weighted average assumptions used:

	Fiscal Year Ended March 31,
	2006			2005			2004
Risk-free interest rate		3.9	%		2.7	%		1.2	%
Expected life (in years)		0.5			0.5			0.5
Expected volatility		51	%		73	%		81	%
Expected dividend yield		0	%		0	%		0	%

11.   Employee Benefit Plans:

Defined Benefit Pension Plans

Our joint venture, ASI, provides a defined benefit pension plan for its employees. The joint venture deposits funds for this plan with insurance companies, third-party trustees, or into government-managed accounts, and/or accrues for the unfunded portion of the obligation, in each case consistent with the requirements of Japanese law. The plan is managed jointly and its assets are commingled with those of the retired employees of Shinko, the minority shareholder of ASI.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The changes in the benefit obligations and plan assets for the plan described above were as follows (in thousands):

	Fiscal Year Ended March 31,
	2006			2005
Change in projected benefit obligation:
Beginning projected benefit obligation	$	18,842		$	18,703
Acquisitions/Employee Transfers		—			132
Service cost		781			738
Interest cost		350			364
Actuarial loss		135			1,268
Currency exchange rate changes		(1,593	)		(280	)
Benefits paid to plan participants		(1,641	)		(2,083	)
Ending projected benefit obligation	$	16,874		$	18,842
Change in Plan Assets:
Beginning fair value of plan assets	$	7,300		$	6,153
Actual return on plan assets		1,274			154
Employer contributions		2,371			2,515
Currency exchange rate changes		(722	)		(93	)
Benefits paid to participants		(1,155	)		(1,429	)
Ending fair value of plan assets	$	9,068		$	7,300
Funded Status:
Ending funded status	$	(7,806	)	$	(11,542	)
Unrecognized net actuarial loss		831			1,912
Net amount recognized	$	(6,975	)	$	(9,630	)
Amounts Recognized in the Balance Sheet:
Accrued pension liability	$	(6,975	)	$	(9,630	)

Plan asset allocations were as follows:

	March 31,
	2006			2005
Japanese equity securities		42.0	%		37.0	%
Japanese debt securities		25.0	%		27.0	%
Non-Japanese equity securities		22.0	%		21.0	%
Non-Japanese debt securities		8.0	%		9.0	%
Others		3.0	%		6.0	%
Total		100.0	%		100.0	%

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The range of target allocation percentages for each major category of plan assets as of March 31, 2006 was as follows:

Japanese equity securities	30% to 45%
Japanese debt securities	20% to 30%
Non-Japanese equity securities	20% to 30%
Non-Japanese debt securities	10% to 20%
Others	0% to 10%

The discount rate is an assumption used to determine the actuarial present value of benefits attributed to the service rendered by participants in our pension plans. The rate used reflects our best estimate of the rate at which pension benefits could be effectively settled. We estimate this rate based on available rates of return on high-quality fixed-income investments currently available, primarily the yield on long-term Japanese government bonds with terms similar to the expected timing of payments to be made under our pension obligations.

Weight-average assumptions used to determine benefit obligations:

	March 31,
	2006		2005
Discount rate		2.0%		2.0%
Rate of compensation increase		2.5%		2.5%

Weight-average assumptions used to determine net periodic benefit cost for:

	Fiscal Year Ended March 31,
	2006		2005
Discount rate		2.0%		2.0%
Expected return on plan assets		3.5%		3.5%
Rate of compensation increase		2.5%		2.5%

Asset return assumptions are required by generally accepted accounting principles and are derived, following actuarial and statistical methodologies, from the analysis of long-term historical data relevant to Japan where the plan is in effect, and the investment applicable to the plan. Plans are subject to regulation under local law which may directly or indirectly affect the types of investment that the plan may hold.

The net periodic pension cost for the plan included the following components (in thousands):

	Fiscal Year Ended March 31,
	2006			2005			2004
Company service cost	$	781		$	738		$	688
Interest cost		350			364			352
Expected return on plan assets		(266	)		(246	)		(243	)
Amortization of unrecognized loss		2			—			—
Net periodic pension cost	$	867		$	856		$	797

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Future expected benefit payments over the next ten fiscal years are as follows (in thousands):

Fiscal Year Ending March 31,
2007	$	889
2008		1,568
2009		2,560
2010		2,496
2011		2,121
2012 through 2016		4,128
Total	$	13,762

The net periodic pension cost for the fiscal year ending March 31, 2007 is expected to be approximately $0.9 million. Cash funding for benefits to be paid for fiscal year 2007 is expected to be approximately $0.3 million. The long-term portion of the benefit liability is included in other long-term liabilities, while the current portion is included in accrued and other liabilities.

At March 31, 2006, the plan’s accumulated benefit obligation of $13.8 million and the plan’s projected benefit obligation of $16.9 million exceed the plan assets of $9.1 million. At March 31, 2005, the plan’s accumulated benefit obligation of $15.6 million and the plan’s projected benefit obligation of $18.8 million exceed the plan assets of $7.3 million.

Our majority-owned Japanese subsidiary, AJI, has an unfunded defined benefit pension plan for its employees. At March 31, 2006, the projected benefit obligation and accrued benefit liability were $1.0 million and $0.8 million, respectively. The net periodic pension cost for the fiscal years ended March 31, 2006 and 2005 was $0.2 million and $0.3 million, respectively.

Employee Savings and Retirement Plan

We maintain a 401(k) retirement savings plan for our full-time employees. Participants in the 401(k) plan may contribute up to 20.0 percent of their annual salary, limited by the maximum dollar amount allowed by the Internal Revenue Code. Employer matching contributions were approximately $0.6 million and $0.5 million during fiscal years ended March 31, 2006 and 2005, respectively. There was no employer matching contribution during the fiscal year ended March 31, 2004.

12.   Reportable Segments:

We have two reportable segments: Fab Automation and AMHS. Fab Automation Products include interface products, substrate-handling robotics, wafer and reticle carriers, auto-ID systems, sorters and connectivity software. AMHS products include automated transport and loading systems for semiconductor fabs and flat panel display manufacturers.

The segments represent management’s view of the Company’s business and how it evaluates performance and allocate resources based on revenues and operating income (loss). Income (loss) from operations for each segment includes selling, general and administrative expenses directly attributable to the segment. Amortization of acquired intangible assets, including impairment of these assets and of goodwill, and acquisition-related and restructuring charges are excluded from the segments’ income (loss) from operations. Our non-allocable overhead costs, which include corporate general and administrative expenses, are allocated between the segments based upon segment revenues.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Segment information is summarized as follows (in thousands):

	March 31,
	2006		2005
AMHS:
Fixed Assets Additions, fiscal year ended	$	3,721	$	2,636
Total Assets	$	251,477	$	312,391
Fab Automation Products:
Fixed Assets Additions, fiscal year ended	$	11,068	$	1,312
Total Assets	$	163,817	$	171,383
Consolidated:
Fixed Assets Additions, fiscal year ended	$	14,789	$	3,948
Total Assets	$	415,294	$	483,774

	Fiscal Year Ended March 31,
	2006			2005			2004
				(As restated)			(As restated)
AMHS:
Net sales	$	294,483		$	380,596		$	168,510
Cost of Sales		196,571			333,956			145,636
Gross Profit	$	97,912		$	46,640		$	22,874
Income (loss) from operations	$	47,782		$	844		$	(19,245	)
Amortization and Depreciation	$	14,461		$	17,284		$	17,048
Fab Automation Products:
Net sales	$	164,738		$	232,391		$	133,132
Cost of Sales		101,404			156,816			102,636
Gross Profit	$	63,334		$	75,575		$	30,496
Income (loss) from operations	$	(15,496	)	$	(18,673	)	$	(67,244	)
Amortization and Depreciation	$	7,901		$	10,325		$	12,183
Consolidated:
Net sales	$	459,221		$	612,987		$	301,642
Cost of Sales		297,975			490,772			248,272
Gross Profit	$	161,246		$	122,215		$	53,370
Income (loss) from operations	$	32,286		$	(17,829	)	$	(86,489	)
Amortization and Depreciation	$	22,362		$	27,609		$	29,231

Total loss from operations is equal to consolidated loss from operations for the periods presented.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Net sales by geography, based on the ship to location of the customers, were as follows (in thousands):

	Fiscal Year Ended March 31,
	2006		2005		2004
United States	$	87,266	$	112,923	$	63,863
Japan		183,079		146,752		83,778
Taiwan		109,174		230,334		46,211
Korea		21,123		30,240		45,785
Other Asia/Pacific		27,336		70,879		41,381
Europe		31,243		21,859		20,624
Total	$	459,221	$	612,987	$	301,642

Total property and equipment, net and other assets, excluding deferred tax assets, were as follows (in thousands):

	March 31,
	2006		2005
United States	$	12,057	$	6,243
Japan		12,992		11,915
Other		312		324
Total	$	25,361	$	18,482

13.   Commitments and Contingencies:

Lease Commitments

We lease various facilities under non-cancelable capital and operating leases. At March 31, 2006, the future minimum commitments under these leases are as follows (in thousands):

Fiscal Year Ending March 31,	Capital Lease			Operating Lease
2007	$	231		$	3,292
2008		162			3,189
2009		148			1,585
2010		—			1,449
2011 and thereafter		—			4,238
Total	$	541		$	13,753
Less: interest		(17	)
Present value of minimum lease payments		524
Less: current portion of capital leases		(216	)
Capital leases, net of current portion	$	308

Rent expense under our operating leases was approximately $6.2 million, $5.8 million and $5.0 million for the years ended March 31, 2006, 2005 and 2004, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Purchase Commitments

At March 31, 2006, total non-cancelable purchase orders or contracts for the purchase of raw materials and other goods and services was $13.6 million.

Legal Commitments

On October 28, 1996, we filed suit in the United States District Court for the Northern District of California against Empak, Inc., Emtrak, Inc., Jenoptik AG, and Jenoptik Infab, Inc., alleging, among other things, that certain products of these defendants infringe our United States Patents Nos. 5,097,421 (“the ‘421 patent”) and 4,974,166 (“the ‘166 patent”). Defendants filed answers and counterclaims asserting various defenses, and the issues subsequently were narrowed by the parties’ respective dismissals of various claims, and the dismissal of defendant Empak pursuant to a settlement agreement. The remaining patent infringement claims against the remaining parties proceeded to summary judgment, which was entered against us on June 8, 1999. We thereafter took an appeal to the United States Court of Appeals for the Federal Circuit. On October 10, 2001, the Federal Circuit issued a written opinion, Asyst Technologies, Inc. v. Empak, 268 F.3d 1365 (Fed. Cir. 2001), reversing in part and affirming in part the decision of the trial court to narrow the factual basis for a potential finding of infringement, and remanding the matter to the trial court for further proceedings. The case was subsequently narrowed to the ‘421 patent, and we sought monetary damages for defendants’ infringement, equitable relief, and an award of attorneys’ fees. On October 9, 2003, the court: (i) granted defendants’ motion for summary judgment to the effect that the defendants had not infringed our patent claims at issue and (ii) directed that judgment be entered for defendants. We thereafter took a second appeal to the United States Court of Appeals for the Federal Circuit. On March 22, 2005, the Federal Circuit issued a second written opinion, Asyst Technologies, Inc. v. Empak, 402 F.3d 1188 (Fed. Cir. 2005), reversing in part and affirming in part the decision of the trial court to narrow the factual basis for a potential finding of infringement, and remanding the matter to the trial court for further proceedings.

Following remand, the Company filed a motion for summary judgment that defendants infringe several claims of the ‘421 patent, and defendants filed a cross-motion seeking a determination of non-infringement. On March 31, 2006, the Court entered an order granting in part, and denying in part, the Company’s motion for summary judgment and at the same time denied defendants’ cross motion for summary judgment. The Court found as a matter of law that defendants’ IridNet system infringed the ’421 Patent under 35 U.S.C. § 271(a), but denied without prejudice that portion of the motion regarding whether defendants’ foreign sales infringed under 35 U.S.C. §271(f). At a case management conference held June 23, 2006, the Court set a trial date of December 1, 2006. In the interim, the defendants continue to assert certain defenses, and are seeking a reexamination by the Patent and Trademark Office of the claims in suit. A reexamination could significantly narrow or invalidate our patents in suit, or narrow or preclude damages recoverable by us in this action. We intend to continue to prosecute the matter before the trial court, seeking monetary damages for defendants’ infringement, equitable relief, and an award of attorneys’ fees.

On August 29, 2005, a suit was filed in the Osaka District Court, Japan, against Shinko and ASI. The suit, filed by Auckland UniServices Limited and Daifuku Corporation (“Plaintiffs”), alleges, among other things, that certain Shinko and ASI products infringe Japanese Patent No. 3304677 (the “ ‘677 Patent”), and seeks monetary damages against both Shinko and ASI in an amount to be determined. The suit alleges infringement of the ‘677 Patent by elements of identified Shinko products and of ASI’s Over-head Shuttle and Over-head Hoist Transport products. ASI has asserted various defenses, including non-infringement of the asserted claims under the ‘677 Patent, and intends to defend the matter vigorously. ASI is also consulting with Shinko concerning issues relating to a mutual defense of the claims.

As discussed in Note 2, the Company received a letter dated June 7, 2006, from the SEC requesting that Asyst voluntarily produce documents relating to stock options granted from January 1, 1997 to the present. The Company is cooperating in the SEC’s inquiry. On June 26, 2006, the Company received a grand jury subpoena of the same date from the United States District Court for the Northern District of California, requesting the production of documents relating to the Company’s past stock option grants and practices for the period from 1995 to the present. The

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company intends to cooperate fully with the U.S. Attorney’s office and is responding to this subpoena. Due to the inherent uncertainties involved with such investigations, the Company cannot accurately predict the ultimate outcome of these governmental inquiries.

In addition, certain of the current and former directors and officers of the Company have been named as defendants in two consolidated shareholder derivative actions filed in the United States District Court of California, captioned In re Asyst Technologies, Inc. Derivative Litigation (N.D. Cal.) (the “Federal Action”), and one similar shareholder derivative action filed in California state court, captioned Forlenzo v. Schwartz, et al. (Alameda County Superior Court) (the “State Action”). Plaintiffs in the Federal and State Actions allege that certain of the current and former defendant directors and officers backdated stock option grants beginning in 1995. Both Actions assert causes of action for breach of fiduciary duty, unjust enrichment, corporate waste, abuse of control, gross mismanagement, accounting, rescission and violations of Section 25402 et. seq. of the California Corporations Code. The Federal Action also alleges that certain of the current and former defendant directors and officers breached their fiduciary duty by allegedly violating Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated there under, Section 14(a) of the Exchange Act and Rule 14a-9 promulgated there under, and Section 20(a) of the Exchange Act. Both Actions seek to recover unspecified monetary damages, disgorgement of profits and benefits, equitable and injunctive relief, and attorneys’ fees and costs. The State Action also seeks the imposition of a constructive trust on all proceeds derived from the exercise of allegedly improper stock option grants. The Company is named as a nominal defendant in both the Federal and State Actions, thus no recovery against the Company is sought. The Company has engaged outside counsel to represent it in the government inquiries and pending lawsuits.

From time to time, we are also involved in other legal actions arising in the ordinary course of business. Litigation is inherently unpredictable, and we cannot predict the outcome of the legal proceedings described above with any certainty. Should there be an adverse judgment against us, it may have a material adverse impact on our financial statements. Because of uncertainties related to both the amount and range of losses in the event of an unfavorable outcome in the lawsuits listed above or in certain other pending proceedings for which loss estimates have not been recorded, we are unable to make a reasonable estimate of the losses that could result from these matters and hence have recorded no accrual in our financial statements as of March 31, 2006.

Indemnifications

We, as permitted under California law and in accordance with our Bylaws, indemnify our officers, directors and members of our senior management for certain events or occurrences, subject to certain limits, while they were serving at its request in such capacity. In this regard, we have received numerous requests for indemnification by current and former officers and directors, with respect to asserted liability under the governmental inquiries shareholder derivative actions described in the immediately preceding Legal Commitments section. The maximum amount of potential future indemnification is unlimited; however, we have a Director and Officer Insurance Policy that enables us to recover a portion of future amounts paid, subject to conditions and limitations of the polices. As a result of the insurance policy coverage, we believe the fair value of these indemnification agreements is not material.

Our sales agreements indemnify our customers for any expenses or liability resulting from claimed infringements of patents, trademarks or copyrights of third parties. The terms of these indemnification agreements are generally perpetual any time after execution of the agreement. The maximum amount of potential future indemnification is unlimited. However, to date, we have not paid any claims or been required to defend any lawsuits with respect to any claim.

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

14.   Related Party Transactions:

At March 31, 2006 and 2005, we did not hold any outstanding loans due to us from current employees. At March 31, 2004, we held notes from two then current non-officer employees totaling $0.4 million, which were repaid during fiscal year 2005.

Our majority-owned subsidiary, ASI, has certain transactions with its minority shareholder, Shinko. Our majority-owned subsidiary, AJI, has certain transactions with MECS Korea, in which AJI is a minority shareholder. At March 31, 2006 and 2005, significant balances with Shinko and MECS Korea were (in thousands):

	March 31,
	2006		2005
Accounts payable due to Shinko	$	13,406	$	39,221
Accrued liabilities due to Shinko	$	59	$	450
Accounts receivable from MECS Korea	$	90	$	100
Accounts payable due to MECS Korea	$	3	$	21
Accrued liabilities due to MECS Korea	$	81	$	—

In addition, the consolidated financial statements reflect that ASI purchased various products, administrative and IT services from Shinko. AJI also purchased IT services from MECS Korea. During the fiscal years ended March 31, 2006, 2005 and 2004, sales to and purchases from Shinko and MECS Korea were (in thousands):

	Fiscal Year Ended March 31,
	2006		2005		2004
Material and service purchases from Shinko	$	57,043	$	96,097	$	42,511
Material and service purchases from MECS Korea	$	3	$	414	$	2
Sales to MECS Korea	$	568	$	378	$	138

As noted in more detail in Part III, below, the Company has appointed Richard H. Janney, as interim Chief Financial Officer and interim Principal Accounting Officer. From 2004 to September 2006, Mr. Janney served as Engagement Manager for Jefferson Wells, a global provider of professional services in the areas of risk, controls, compliance, and financial process improvement. During and after Asyst’s fiscal year ended March 31, 2006, Mr. Janney, and other consultants from Jefferson Wells worked closely with Asyst, advising Asyst on its internal controls and processes relating to its financial reporting and assisting it in its continuing efforts to comply with its requirements under Section 404 of the Sarbanes-Oxley Act. Asyst paid an aggregate amount of approximately $1.68 million to Jefferson Wells for these and other consulting services from April 2005 through July 2006. For the current period of his service to Asyst, Mr. Janney has agreed to devote his professional time to his positions at Asyst (but may provide limited services to Jefferson Wells that do not conflict with his agreed undertaking with Asyst).

15.   Subsequent Events:

NASDAQ Delisting Proceedings

On June 22, 2006, the Company notified the NASDAQ National Market (renamed the NASDAQ Global Market on July 1, 2006) that Asyst would not file its Form 10-K for the year ended March 31, 2006, within the 15 calendar day extension period contemplated by its Form 12b-25 filed with the SEC on June 14, 2006. On June 30, 2006, the Company received a letter from the NASDAQ Listing Qualifications Department indicating that, because of the Company’s previously announced delay in timely filing its Annual Report on Form 10-K for its fiscal year ended March 31, 2006, the Company was not in compliance with the filing requirements for continued listing on NASDAQ as set forth in NASDAQ Marketplace Rule 4310(c)(14). The Company made a request for a hearing before a NASDAQ Listings Qualifications Panel to address the filing delay, which hearing was held on August 31, 2006. On September 21, 2006, the Company received a letter from the NASDAQ Listing Qualifications Hearings

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ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

department stating that a NASDAQ Listing Qualifications Panel has determined to continue the listing of Asyst’s common stock on the NASDAQ Global Market, subject to the conditions that:

•  On or before September 27, 2006, the Company submits supplemental information outlined in the letter concerning the previously announced Special Committee investigation into stock option grants and practices; and

•  On or before November 30, 2006, the Company files its Form 10-K for the fiscal year ended March 31, 2006, its Form 10-Q for the quarter ended June 30, 2006, and all required restatements (if any).

On September 27, 2006, Asyst submitted to NASDAQ the supplemental information requested from the Company.

Acquisition and Related Debt Financing Facility

On July 14, 2006, Asyst and AJI purchased from Shinko shares of ASI representing an additional 44.1% of outstanding capital stock of ASI for a cash purchase price of JPY 11.7 billion (approximately US$102 million at the July 14 exchange rate). This purchase increased Asyst’s consolidated ownership of ASI to 95.1%.

At any time prior to the first anniversary of the closing, and subject to the other provisions of the agreement, either Shinko or AJI may give notice to the other, calling for AJI to purchase from Shinko shares representing the remaining 4.9% of outstanding capital stock of ASI for a fixed payment of JPY 1.3 billion (approximately US$11.3 million at the July 14 exchange rate).

On June 22, 2006, Asyst entered into a Credit Agreement with Bank of America, N.A., as Administrative Agent, and Banc of America Securities LLC, as Lead Arranger and Book Manager, and the other parties to the agreement. The $115 million senior secured credit facility under this agreement consists of a $90 million revolving credit facility, including a $20 million sub-limit for letters of credit and $10 million sub-limit for swing-line loans, and a $25 million term loan facility. The credit agreement will terminate and all amounts outstanding will be due 3 years after the credit agreement closing date (provided that Asyst’s outstanding 53/4% convertible subordinated notes due July 3, 2008, are redeemed or repurchased, or the maturity of the notes extended, on terms reasonably satisfactory to the administrative agent on or before March 31, 2008; otherwise, amounts outstanding under the credit agreement will be due on March 31, 2008).

Interest on the credit facility is based on the applicable margin plus either (i) LIBOR (or such other indices as may be agreed upon), or (ii) for dollar-denominated loans only, the higher of (a) the Bank of America prime rate, or (b) the Federal Funds rate plus 0.50%. The applicable margin ranges from 1% to 2.75%, depending on various factors set forth in the credit agreement. The agreement also requires a range of commitment, letter of credit and other fees.

The credit agreement is a direct obligation of Asyst and its direct and indirect subsidiaries, and is guaranteed by Asyst’s direct and indirect domestic subsidiaries. The credit facility is secured by a lien on all of the assets of Asyst and its subsidiaries in which security interests can be granted.

In conjunction with executing the $115 million senior secured credit facility, Asyst terminated the $40 million revolving bank line of credit that was originally scheduled to expire on July 31, 2007.

Notice of default relating to Convertible Subordinated Notes

Asyst received a letter dated August 16, 2006, from U.S. Bank National Association, as trustee under the Indenture related to Asyst’s 53/4% Convertible Subordinated Notes due 2008, which asserts that Asyst is in default under the Indenture because of the delays in filing its Form 10-K for the fiscal year ended March 31, 2006 and Form 10-Q for the fiscal quarter ended June 30, 2006.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The letter states that this asserted default is not an “Event of Default” under the Indenture if the company cures the default within 60 days after receipt of this notice, or the default is waived by the holders of a majority in aggregate principal amount of the notes outstanding. If an Event of Default were to occur, and is continuing under the indenture, the trustee of the holders of at least 25% in aggregate principal amount of the notes, of which $86.3 million principal amount is outstanding, may accelerate maturity of the notes.

Asyst does not agree with the trustee’s assertion that the delayed filing of the annual and quarterly reports is a default. Nonetheless, in conjunction with the filing of this report on Form 10-K, we also intend to file with the SEC our report on Form 10-Q for the fiscal quarter ended June 30, 2006. Upon completion of those filings, we intend to deliver to the trustee copies of the reports on Forms 10-K and 10-Q, and that delivery will cure any purported defaults under the indenture and asserted by the trustee in its letter referenced above.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Asyst Technologies, Inc.:

We have completed integrated audits of Asyst Technologies, Inc.’s fiscal 2006 and fiscal 2005 consolidated financial statements and of its internal control over financial reporting as of March 31, 2006, and an audit of its fiscal 2004 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

Consolidated financial statements and financial statement schedule

In our opinion, the accompanying consolidated financial statements listed in the index appearing under Item 8 present fairly, in all material respects, the financial position of Asyst Technologies, Inc. and its subsidiaries (the “Company”) at March 31, 2006 and March 31, 2005, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2006 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 8 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described in Note 2 to the consolidated financial statements, the Company has restated its fiscal 2005 and fiscal 2004 consolidated financial statements.

Internal control over financial reporting

Also, we have audited management’s assessment, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A, that Asyst Technologies, Inc. did not maintain effective internal control over financial reporting as of March 31, 2006, because (1) the Company did not maintain effective controls over the completeness and accuracy of revenue and deferred revenue, and (2) the Company did not maintain effective controls over the completeness, accuracy and timeliness of recognition of accrued liabilities and deferred costs, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable

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assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The following material weaknesses have been identified and included in management’s assessment as of March 31, 2006:

1. The Company did not maintain effective controls over the completeness and accuracy of revenue and deferred revenue. Specifically, effective controls were not designed and in place to prevent or detect the Company’s (a) failure to properly defer revenue for post-delivery installation obligations at its wholly-owned subsidiary in Japan, Asyst Japan, Inc. (“AJI”), (b) failure to recognize installation revenue on a timely basis at its majority-owned joint venture in Japan, Asyst Shinko, Inc. (“ASI”), and (c) failure to properly defer revenue on one contract until the contract was signed. This control deficiency resulted in audit adjustments to the interim consolidated financial statements for the second and third quarter of fiscal 2006 and audit adjustments to the Company’s fiscal 2006 annual consolidated financial statements. Additionally, this control deficiency could result in a misstatement of revenue and deferred revenue that would result in a material misstatement to the Company’s interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness.

2. The Company did not maintain effective controls over the completeness, accuracy and timeliness of recognition of accrued liabilities and deferred costs. Specifically, effective controls were not designed and in place to prevent or detect the Company’s (a) capitalization of certain operating expenses that should have been expensed, (b) failure to accrue certain freight charges on a timely basis and (c) failure to accurately and timely accrue certain cost of sales at ASI. This control deficiency resulted in audit adjustments to the interim consolidated financial statements for all quarters of fiscal 2006 and audit adjustments to the Company’s fiscal 2006 annual consolidated financial statements. Additionally, this control deficiency could result in a misstatement of prepaid costs, accrued liabilities, cost of sales and operating expenses that would result in a material misstatement to the Company’s interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness.

These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the fiscal 2006 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

In our opinion, management’s assessment that Asyst Technologies, Inc. did not maintain effective internal control over financial reporting as of March 31, 2006, is fairly stated, in all material respects, based on criteria established in Internal Control  — Integrated Framework issued by the COSO. Also, in our opinion, because of the effects of the material weaknesses described above on the achievement of the objectives of the control criteria, Asyst Technologies, Inc. has not maintained effective internal control over financial reporting as of March 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the COSO.

/s/  PricewaterhouseCoopers LLP

San Jose, California

October 13, 2006

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Supplementary Financial Data

Selected Quarterly Financial Data (Unaudited) for the two year period ended March 31, 2006.

QUARTERLY FINANCIAL DATA

	Year Ended March 31, 2006
	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
	(In thousands, except per share data)
As reported
Net sales	$	117,451		$	124,595		$	106,824		$	110,351
Gross profit		33,734			43,476			41,996			42,112
Net income (loss)	$	(3,587	)	$	(1,545	)	$	2,979		$	2,437
Basic net income (loss) per share	$	(0.08	)	$	(0.03	)	$	0.06		$	0.05
Diluted net income (loss) per share	$	(0.08	)	$	(0.03	)	$	0.06		$	0.05
Shares used in basic net income (loss) per share calculations		47,812			47,963			48,019			48,216
Shares used in diluted net income (loss) per share calculations		47,812			47,963			48,789			50,178
Adjustments
Net sales	$	—		$	—		$	—		$	—
Gross profit		(26	)		(26	)		(20	)		—
Net income (loss)	$	(107	)	$	(91	)	$	(190	)	$	—
Basic net income (loss) per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Diluted net income (loss) per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Shares used in basic net income (loss) per share calculations		47,812			47,963			48,019			48,216
Shares used in diluted net income (loss) per share calculations		47,812			47,963			48,789			50,178
As restated
Net sales	$	117,451		$	124,595		$	106,824		$	110,351
Gross profit		33,708			43,450			41,976			42,112
Net income (loss)	$	(3,694	)	$	(1,636	)	$	2,789		$	2,437
Basic net income (loss) per share	$	(0.08	)	$	(0.03	)	$	0.06		$	0.05
Diluted net income (loss) per share	$	(0.08	)	$	(0.03	)	$	0.06		$	0.05
Shares used in basic net income (loss) per share calculations		47,812			47,963			48,019			48,216
Shares used in diluted net income (loss) per share calculations		47,812			47,963			48,789			50,178

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	Year Ended March 31, 2005
	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
As reported
Net sales	$	139,425		$	168,606		$	161,383		$	143,573
Gross profit		27,095			30,848			27,569			36,745
Net loss	$	(2,286	)	$	(1,831	)	$	(11,644	)	$	(1,781	)
Basic and diluted net loss per share	$	(0.05	)	$	(0.04	)	$	(0.24	)	$	(0.04	)
Shares used in basic and diluted net loss per share calculations		47,179			47,428			47,553			47,678
Adjustments
Net sales	$	—		$	—		$	—		$	—
Gross profit		(21	)		(15	)		(1	)		(5	)
Net income (loss)	$	(98	)	$	(56	)	$	(27	)	$	(20	)
Basic and diluted net income (loss) per share	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.00	)
Shares used in basic and diluted net loss per share calculations		47,179			47,428			47,553			47,678
As restated
Net sales	$	139,425		$	168,606		$	161,383		$	143,573
Gross profit		27,074			30,833			27,568			36,740
Net loss	$	(2,384	)	$	(1,887	)	$	(11,671	)	$	(1,801	)
Basic and diluted net loss per share	$	(0.05	)	$	(0.04	)	$	(0.25	)	$	(0.04	)
Shares used in basic and diluted net loss per share calculations		47,179			47,428			47,553			47,678

Comparability of quarterly data is affected by the following items which occurred during fiscal years 2006 and 2005:

Asset impairment charges of $4.6 million were recorded in the third quarter of fiscal year 2005. These charges relate to write-downs in fixed assets, including land held for sale, by AJI.

Loss contract accruals of $1.9 million and $0.4 million were recorded in the second and fourth quarters of fiscal year 2005, respectively.

Restructuring and other charges of $0.2 million, $0.5 million and $1.1 million were recorded in the first, second and third quarters of fiscal year 2005, respectively. These charges were primarily for severance, excess facility and asset impairment charges related to workforce reductions and consolidation of our facilities.

The net loss for the fourth quarter of fiscal year 2005 included a net credit of $0.7 million relating to the first three quarters of fiscal 2005 to properly record certain inter-company sales and costs of ASI with its subsidiaries.

Stock-based compensation and related payroll tax expenses (benefits) of $107,000, $91,000, $74,000 and $(8,000) were recorded in cost of sales and other operating expenses in the first, second, third and fourth quarters of fiscal year 2006, respectively.

Stock-based compensation and related payroll tax expenses of $98,000, $56,000, $27,000 and $20,000 were recorded in cost of sales and other operating expenses in the first, second, third and fourth quarters of fiscal year 2005, respectively.

These charges were primarily related to the investigation which began in June 2006, relating to the dating of stock option awards granted from fiscal year 1995 through fiscal year 2004.

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Refer to the consolidated financial statements contained in this Form 10-K for further disclosure of the above items.

Item 9 —  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A  — Controls and Procedures

Special Committee Investigation into Past Option Grants and Practices and Restatement

Background Findings and Restatement

In May 2006, certain analysts published reports suggesting that Asyst may have granted stock options in the past with favorable exercise prices compared to stock prices before or after the reported grant dates. In response to such reports, management began an informal review of the Company’s past stock option grant practices. On June 7, 2006, the SEC sent a letter to the Company requesting a voluntary production of documents relating to past option grants. On June 9, 2006, the Company’s Board of Directors appointed a special committee of three independent directors to conduct a formal investigation into past stock option grants and practices. The Special Committee retained independent legal counsel and independent forensic and technical specialists to assist in the investigation.

Special Committee’s Investigation: Scope, Report and Findings

The Special Committee’s investigation was completed on September 28, 2006, with the delivery of the Committee’s final report on that date. The investigation covered option grants to all employees, directors and consultants’ stock options and associated grant dates during the period of January 1995 through June 2006. The Special Committee found instances wherein incorrect measurement dates were used to account for certain option grants. The last stock option for which the measurement date was found to be in error was granted in February 2004. The Special Committee concluded that none of the incorrect measurement dates was the result of fraud.

Specifically, the Special Committee determined that (1) there was an insufficient basis to rely on the Company’s process and related documentation to support recorded measurement dates used to account for most stock options granted primarily during calendar years 1998 through 2003; (2) the Company had numerous grants made by means of unanimous written consents signed by Board or Compensation Committee members wherein all the signatures of the members were not received on the grant date specified in the consents; and (3) the Company made several company-wide grants pursuant to an approval of the Board or Compensation Committee, but the list of grantees and number of options allocated to each grantee was not finalized as of the stated grant date.

The Special Committee also found that, during the period from April 2002 through February 2004, the Company set the grant date and exercise price of rank and file employee option grants for new hires and promotions at the lowest price of the first five business days of the month following the month of their hire or promotion. The net impact of this practice was an aggregate charge of less than $400,000.

The Special Committee identified isolated instances where stock option grants did not comply with applicable terms and conditions of the stock plans from which the grants were issued. For example, the Committee determined that on two occasions, the Company granted options to directors that exceeded the annual “automatic” grant amount specified in the applicable plan. On another occasion, a grant to a director was approved one day before the individual became a director. In addition, one grant was made to an officer of the Company by the chief executive officer under delegated authority; however, under the terms of the applicable plan, the option grant should have been made by the Company’s Board or its Compensation Committee. There were also isolated instances where option grants were made below fair market value. The applicable stock option plans require that option grants must be made at fair market value on the date of grant. However, the Committee did not find any evidence that these violations were fraudulent or committed for improper purposes.

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Corrected Measurement Dates and Determination to Restate

To determine the correct measurement dates under applicable accounting principles for these options, the Committee relied on Accounting Principles Board Opinion No. 25 (“APB No. 25”), which deems the “measurement date” as the first date on which all of the following are known: (1) the individual employee who is entitled to receive the option grant, (2) the number of options that an individual employee is entitled to receive, and (3) the option’s purchase price. In instances where the Special Committee determined it could not rely on the original stock option grant date, the Special Committee determined corrected measurement dates based on its ability to establish or confirm, whether through other documentation, consistent or established Company practice or processes, or credible circumstantial information, that all requirements for the proper granting of an option had been satisfied under applicable accounting principles. In instances where the Special Committee could not independently establish a corrected measurement date based on this criterion, the Committee determined to use as the appropriate measurement date for accounting purposes that date on which the option grant was entered and recorded in the Company’s stock administration data system. The Special Committee concluded that such date was the most objective evidence available to it of when the authorization process of the stock option grant had been formally concluded.

Based on the results of the Special Committee’s investigation, the Company is recording stock compensation charges, and additional payroll taxes with respect to its employee stock options grants for which the measurement dates were found to be in error. While the impact of recording these charges was not material to the fiscal years ended March 31, 2005 and 2004, the Company deemed it appropriate to record the charges in the relevant periods. Accordingly, the Company restated the results of fiscal years 2005 and 2004, to record a net charge of approximately $0.2 million or $0.00 per share in fiscal 2005 and a net benefit of $0.8 million or $(0.02) per share in fiscal 2004. Additionally, the Company recorded a net charge of $19.5 million to its accumulated deficit as of April 1, 2003 for cumulative charges relating to fiscal years prior to fiscal 2004.

During the fiscal year ended March 31, 2006, the Company recorded a net charge of approximately $0.3 million relating to the re-measurement of stock options resulting from the investigation. At March 31, 2006, the remaining unamortized deferred stock-based compensation charge to be recognized in future periods was less than $0.1 million.

Management’s Conclusion Regarding the Effectiveness of Internal Controls over Stock Option Grant Practices

In assessing whether our disclosure controls and procedures and our internal control over financial reporting were effective as of March 31, 2006, management considered, among other things, the immaterial impact of the restatement of the financial statements for fiscal years 2004 and 2005, the nature of the restatement as disclosed in Note 2 to the Consolidated Financial Statements, and the effectiveness of internal controls in this area as of March 31, 2006.

Management’s Consideration of the Restatement

In coming to the conclusion that our disclosure controls and procedures and our internal control over financial reporting were not effective as of March 31, 2006, management considered, among other things, the control deficiencies related to accounting for stock-based compensation and control environment. Management also considered the conclusions of the Special Committee, following an extensive review of our past and current stock option grants and practices, that: (a) while the Company used incorrect accounting measurement dates for certain stock option grants, as more fully discussed above, those errors were not a result of fraud and the Special Committee found no evidence raising any concerns about the integrity of current management; and (b) the Company’s option grant practices had improved significantly since February 2004, when the last grant with a measurement date discrepancy was made. These control deficiencies resulted in the need to restate our previously issued financial statements as disclosed in Note 2, “Results of Independent Directors’ Stock Option Investigation,” included in Item 8 of this report. Management has concluded that the control deficiencies that resulted in the restatement of the previously issued financial statements did not constitute a material weakness as of March 31, 2006 because management determined that as of March 31, 2006 there were effective controls designed and in place to prevent or

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detect a material misstatement and therefore the likelihood of stock-based compensation, deferred compensation and deferred tax assets being materially misstated is remote.

Specifically, beginning in early calendar year 2004, the Company implemented new policies and processes to provide greater internal controls over the Company’s stock option grant approvals, including

•  consistent practices for the approval of all stock option grants by the Compensation Committee

•  high level of objectivity in determination of pricing of stock option grants made to all employees

•  greater advance review and certification of proposed option grants to ensure proper accounting and compliance with the applicable stock plan terms and conditions

•  consistent use of improved stock option grant approval documentation

•  increased review of Company stock option grant plans and approval processes and documentation by the Company’s counsel (internal and outside)

•  increased review by the Compensation Committee of the Company’s stock option grant practices

•  use of outside consultants to review the Company’s stock option grant practices

•  quarterly internal reconciliations of stock option grant activities

•  use of additional training resources for personnel in areas associated with the stock option granting processes to increase competency levels of the personnel involved

•  greater use of restricted stock awards (as opposed to option grants) as components of the Company’s overall equity incentive and compensation programs.

Management determined that, as of March 31, 2006, there were effective controls designed and in place and that the likelihood of stock-based compensation charges being materially misstated was remote. Management has concluded therefore that the control deficiencies that resulted in the restatement of the previously issued financial statements did not constitute a material weakness as of March 31, 2006.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and we cannot be certain that any design will succeed in achieving its stated goals under all potential future conditions.

Our management is responsible for establishing and maintaining our disclosure controls and procedures. Our Chief Executive Officer and Chief Financial Officer participated with our management in evaluating the effectiveness of our disclosure controls and procedures as of March 31, 2006. In light of the material weaknesses set forth below, these officers have concluded that our disclosure controls and procedures were not effective as of that date to provide reasonable assurance that they will meet their defined objectives. Notwithstanding the material weaknesses described below, we performed additional analyses and other post-closing procedures to ensure our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. Based in part on these additional efforts, our Chief Executive Officer and Chief Financial Officer have included their certifications as exhibits to this Form 10-K to the effect that, among other statements made in the

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certifications and based on their knowledge, the consolidated financial statements included in this Form 10-K fairly present in all material respects Asyst’s financial condition, results of operations and cash flows for the periods presented and this Form 10-K does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has assessed the effectiveness of our internal control over financial reporting as of March 31, 2006. In making this assessment, our management used the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management’s assessment identified the following material weaknesses in our internal control over financial reporting as of March 31, 2006:

1. We did not maintain effective controls over the completeness and accuracy of revenue and deferred revenue. Specifically, effective controls were not designed and in place to prevent or detect our (a) failure to properly defer revenue for post-delivery installation obligations at our wholly-owned subsidiary in Japan, Asyst Japan, Inc. (“AJI”), (b) failure to recognize installation revenue on a timely basis at our majority-owned joint venture in Japan, Asyst Shinko, Inc. (“ASI”), and (c) failure to properly defer revenue on one contract until the contract was signed. This control deficiency resulted in audit adjustments to the interim consolidated financial statements for the second and third quarters of fiscal 2006 and audit adjustments to our fiscal 2006 annual consolidated financial statements. Additionally, this control deficiency could result in a misstatement of revenue and deferred revenue that would result in a material misstatement to our interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness.

2. We did not maintain effective controls over the completeness, accuracy and timeliness of recognition of accrued liabilities and deferred costs. Specifically, effective controls were not designed and in place to prevent or detect our (a) capitalization of certain operating expenses that should have been expensed, (b) failure to accrue certain freight charges on a timely basis and (c) failure to accurately and timely accrue certain cost of sales at ASI. This control deficiency resulted in audit adjustments to the interim consolidated financial statements for all quarters of fiscal 2006 and audit adjustments to our fiscal 2006 annual consolidated financial statements. Additionally, this control deficiency could result in a misstatement of prepaid costs, accrued liabilities, cost of sales and operating expenses that would result in a material misstatement to our interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness.

Because of the material weaknesses discussed above, we have concluded that Asyst did not maintain effective internal control over financial reporting as of March 31, 2006, based on the criteria established in Internal Control — Integrated Framework issued by the COSO.

Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2006 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

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Management’s Remediation Initiatives

The material weaknesses described above also existed at March 31, 2005. In response to the material weaknesses discussed above, we plan to continue to review and make necessary changes to improve our internal control over financial reporting. We plan to further strengthen our controls over revenue recognition and accrued liabilities and deferred costs with additional hiring and continuous improvements in our training in the application of U.S. generally accepted accounting principles for revenue recognition, accrued liabilities and deferred costs. We plan to further improve the discipline throughout the organization to achieve greater compliance with policies, procedures and controls that have already been introduced by us.

Remediation of Previously Disclosed Material Weaknesses

Changes in our internal control over financial reporting during the fourth quarter of fiscal 2006 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting relate to the completion of our plan to remediate the material weaknesses described below which were previously disclosed in our Annual Report on Form 10-K for the year ended March 31, 2005.

In connection with our remediation plan, completed during the fourth quarter of fiscal 2006, management: (i) identified the control objectives and new controls, that result in the material weaknesses being eliminated; (ii) obtained sufficient evidence of the design and operating effectiveness of the new controls including documentation of the new controls; and (iii) determined the new controls have been in effect for a sufficient period of time to permit the assessment of their design and operating effectiveness. As a result of this assessment, management has concluded the following material weaknesses were remediated as of March 31, 2006.

We did not maintain an effective control environment based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Specifically, the financial reporting organizational structure was not adequate to support the size, complexity or activities of the Company. Our remedial actions with regard to this material weakness included the hiring additional qualified accounting personnel in the U.S. and in Japan, in the areas of general accounting, compliance reporting, internal audit and tax; and implementing an enhanced formal training process for financial staff in an effort to ensure that personnel have the necessary competency, training and supervision for their assigned level of responsibility and the nature and complexity of our business.

We did not maintain effective controls over the timely and accurate reconciliation and review of ASI’s intercompany accounts. Our remedial actions with regard to this material weakness included the development of effective controls and the training of accounting personnel to ensure the timely and accurate reconciliation and review of ASI’s intercompany accounts between ASI and its subsidiaries.

ASI did not maintain effective controls over the identification and reporting of related party transactions. Specifically, ASI’s controls over its related party transactions were ineffective in identifying all significant related party transactions between ASI and its minority joint venture partner on a timely basis in order for such transactions to be appropriately reflected in our interim and annual consolidated financial statements. Our remedial actions with regard to this material weakness included the development of controls over ASI’s related party transactions that were effective in identifying all significant related party transactions between ASI and its minority joint venture partner on a timely basis.

ASI did not maintain effective controls over the timely preparation, review and approval of account reconciliations for significant financial statement accounts. Specifically, ASI did not maintain effective controls over significant account reconciliations for inventory, accruals, other assets and suspense accounts. Our remedial actions with regard to this material weakness included implementing new month-end closing procedures with improved account reconciliation controls and the use of standardized checklists to help ensure such procedures are consistently and effectively applied throughout at ASI.

ASI did not maintain effective controls over the timely review and approval of ASI financial information included in our consolidated financial statements. Specifically, our review of ASI’s financial results, including the review of manual post-close journal entries, both at ASI and Corporate, were not sufficient to detect errors in ASI’s interim and annual financial information. Our remedial actions with regard to this material weakness included the

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implementation of overall improvements throughout our consolidated financial reporting process in an effort to ensure accurate and timely preparation and review of our consolidated financial statements.

We did not maintain effective controls over inventory and the related cost of sales accounts at ASI and our operations in the United States. Specifically, our controls over the accuracy of the allocation of inventory variances and the valuation of inventory reserves were not effective. Our remedial actions with regard to this material weakness included the implementation of key controls over the accuracy of the allocation of inventory variances and the valuation of inventory reserves.

We did not maintain effective controls over the accounting for awards made under our various stock compensation plans. Specifically, modifications to stock compensation arrangements and non-routine stock compensation arrangements were not timely communicated to the appropriate accounting personnel responsible for recording the financial consequences of such modifications in our consolidated financial statements. Our remedial actions with regard to this material weakness included the implementation of a key control to ensure that modifications to stock compensation arrangements and non-routine stock compensation arrangements were communicated on a timely basis to the accounting personnel.

We did not maintain effective controls over our income tax provision and the related balance sheet accounts. Specifically, we failed to properly allocate the release of the deferred tax asset valuation allowance between the income statement and intangible assets. This control deficiency resulted in audit adjustments to our fiscal 2005 annual consolidated financial statements. Our remedial actions with regard to this material weakness included increasing our diligence throughout our tax process in an effort to ensure accurate and timely preparation of tax calculations and disclosures, as well as the hiring of a qualified Tax Director.

We did not maintain effective controls over the preparation of our interim and annual consolidated financial statements. Specifically, we did not maintain effective controls over the process for identifying and accumulating certain required supporting information to ensure the completeness and accuracy of our interim and annual consolidated financial statements and the related disclosures. Our remedial actions with regard to this material weakness included the implementation of overall improvements throughout our consolidated financial reporting process in an effort to ensure accurate and timely preparation and review of our consolidated financial statements.

Changes in Internal Control over Financial Reporting

Special Committee’s Recommended Further Measures Regarding Stock Option Grants

The Special Committee noted that management had significantly improved the Company’s stock option grant practices since February 2004. However, the Special Committee identified the following changes and enhancements for consideration in light of its investigation into the Company’s past stock option grant processes:

•  reduce the number of occasions on which options are granted

•  Compensation Committee meetings to approve option grants should be regularly scheduled, and the committee should minimize the use of unanimous written consents

•  option grants approved at Compensation Committee meetings should be effective two business days after the release of quarterly earnings results

•  the Company’s finance department should provide greater advance review and certification of proposed option grants to ensure proper accounting and compliance with the applicable stock plan terms and conditions

•  the Company should improve documentation of option grant approvals and approved grants should be promptly entered into the Company’s financial records and stock option database

•  the Compensation Committee should be provided with enhanced technical support to ensure proper accounting and compliance with the applicable stock plan terms and conditions

•  the Company’s stock administration personnel should receive regular training, and the finance and internal audit functions should regularly review stock option grant records and processes

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•  the Company’s management should report quarterly to the Company’s Audit Committee that the Company’s stock option grants comply with internal procedures, proper accounting principles, and applicable SEC disclosure requirements

•  a member of the Special Committee should be added to the Compensation Committee to provide for an efficient transfer of the information obtained by the Special Committee through its investigative process

Item 9B — Other Information

Not applicable

PART III

Item 10 — Directors and Executive Officers of the Registrant

Directors

The names of the incumbent directors currently serving on Asyst’s Board of Directors and related biographical information are set forth below.

Name	Age		Principal Occupation
Stephen S. Schwartz, Ph.D.		46	Chair of our Board of Directors, President and Chief Executive Officer of Asyst
Stanley Grubel		64	Retired Vice President and General Manager, Philips Semiconductor Manufacturing, Inc., and retired CEO of MiCRUS
Tsuyoshi Kawanishi		77	Retired Executive Senior Vice President and Director, Toshiba Electronic Co., Ltd.
Robert A. McNamara		52	President and Chief Executive Officer, LVI Services, Inc.
Anthony E. Santelli		66	Retired Executive Vice Chairman, USA Global Link, and retired General Manager, IBM
William Simon		68	Retired Executive Vice President, BearingPoint, Inc., and retired National Managing Partner, KPMG LLP
Walter W. Wilson		62	Retired Senior Vice President, Solectron Corporation

Dr. Schwartz has served as Chair of our Board since January 2003. He has been a director of Asyst since August 2002, when he was elected to the Board in conjunction with his appointment as our President and Chief Executive Officer. He joined Asyst in January 2001 as Senior Vice President, Product Groups and Operations, and became Executive Vice President, Product Groups and Operations in October 2001. Prior to joining us, he served as President of Consilium, a software company and wholly owned subsidiary of Applied Materials, Inc., from May 1999 to January 2001. Between May 1997 and May 1999, Dr. Schwartz served as Vice President and General Manager of Applied Materials’ Global Service Business, a supplier of products and services to the global semiconductor industry. From September 1992 to May 1997, Dr. Schwartz also served as General Manager of Applied Materials’ High Temperature Films Division. From 1987 to 1992, Dr. Schwartz held various marketing, business development and engineering positions at Applied Materials. He has been a director of Semiconductor Equipment and Materials International, or SEMI, since July 2003.

Mr. Grubel has served as a director of Asyst since January 1997. He served as a Vice President and General Manager of Philips Semiconductor Manufacturing, Inc. from June 2000 until his retirement in 2002. Prior to such time, he served as Chief Executive Officer of MiCRUS, a semiconductor manufacturing company, from September 1994 through June 2000. Between January 1990 and September 1994, he served in various executive positions for IBM. Since May 1999, he has also served as a director of CH Energy Group, Inc.

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Mr. Kawanishi has served as a director of Asyst since June 2003. He currently also serves as a director of Semiconductor Manufacturing International Corporation, a semiconductor foundry in the People’s Republic of China, and Tata Consultancy Services Japan. Mr. Kawanishi previously served on the board of Applied Materials, Inc. from 1994 to 2001. He is a former Executive Senior Vice President and director of Toshiba Electronic Co., Ltd. He currently serves as chairman of The Society of Semiconductor Industry Seniors in Japan, and previously served on the International Advisory Panel for Singapore Technologies Pte Ltd.

Mr. McNamara has served as a director of Asyst since October 1999. He currently is President and Chief Executive Officer of LVI Services, Inc., an environmental services company. Mr. McNamara also currently serves as a consultant to the Fluor Corporation, an engineering, procurement, construction and maintenance company. He recently retired as Senior Group President of Fluor, a position he held beginning in 2004. From 2001 to 2004 he served as Group President of Fluor. From June 1999 to 2001, he served as Group President of the Manufacturing and Life Sciences Strategic Business Unit of the Fluor Daniel division of Fluor Corporation. From October 1996 to June 1999, Mr. McNamara served as a Vice President of Fluor Daniel. Prior to such time, he served as President and Chief Operations Officer of Marshall Contractors from 1982 until Marshall was acquired by Fluor Corporation in October 1996.

Mr. Santelli has served as a director of Asyst since May 2001. He served as Executive Vice Chairman of USA Global Link, a telecommunications and information services company, from August 1999 until retiring in May 2001. From March 1997 until July 1999, Mr. Santelli served as a General Manager of IBM Printing Systems Company. From November 1995 to March 1997, Mr. Santelli was General Manager, Product and Brand Management, of IBM Personal Computer Company.

Mr. Simon joined our Board in January 2005.  From February 2001 to July 2004, Mr. Simon was a director of Duane Reade, Inc., serving as chair of its audit committee and as its audit committee financial expert. From July 1998 to 2002, Mr. Simon held various executive positions with BearingPoint, Inc., a business and systems integration consulting firm (which, prior to its public offering in 2001, was the consulting entity of KPMG LLP). From 2001 until his retirement from BearingPoint in 2002, Mr. Simon served as its Executive Vice President, International Consulting, and from July 1998 to 2001 as its CEO, Latin America Consulting. Mr. Simon held various positions with KPMG LLP over a 37-year period, until his retirement, including until June 1998 as its National Managing Partner for the firm’s Manufacturing, Retailing and Distribution Practice (a vice chair position). Mr. Simon also served as Partner in Charge of KPMG’s Management Consulting and Audit Practices (vice chair positions), as well as serving as Chair of its Audit and Management Consulting Practice Committees.

Mr. Wilson has served as a director of Asyst since January 1995. Since October 2000, he has been a business consultant. From 1989 until he retired in October 2000, Mr. Wilson held numerous management positions at Solectron Corporation, a provider of electronics manufacturing and integrated supply chain services, most recently as its Senior Vice President, Business Integration.

There are three standing committees of our Board: Audit Committee, Governance and Nominating Committee, and Compensation Committee. The members of these committees currently are:

			Governance and
	Audit		Nominating		Compensation
Director Name and Positions	Committee		Committee		Committee
Stephen S. Schwartz (Chairman, Chief Executive Officer and President)		—		—		—
Stanley Grubel (Director)		X		Chair		X
Tsuyoshi Kawanishi (Director)		—		—		—
Robert A. McNamara (Director)		X		—		—
Anthony E. Santelli (Director)		—		—		Chair
William Simon (Director)		Chair		—		—
Walter W. Wilson (Director)		X		X		X

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The members of a Special Committee of the Board appointed to conduct the previously announced investigation into our past stock option grant practices are Mr. McNamara, Mr. Simon and Mr. Wilson. Mr. Simon serves as the Chair of that Special Committee.

Executive Officers

The names of our current executive officers and related biographical information are set forth below.

Name	Age		Principal Occupation
Stephen S. Schwartz		46	Chair of the Board, Chief Executive Officer and President
Anthony C. Bonora		63	Executive Vice President, Research and Development, Chief Technical Officer and Asyst Fellow
Alan S. Lowe		44	Senior Vice President, Global Business Solutions
Steve Debenham		44	Vice President, General Counsel and Secretary
Richard H. Janney		48	Interim Chief Financial Officer and interim Principal Accounting Officer

Biographical information for Dr. Schwartz is set forth under “Directors” above.

Mr. Bonora joined Asyst in 1984 and has been Executive Vice President, Research and Development of Asyst since 1986, Chief Technical Officer since January 1996, and Asyst Fellow since April 2000. From 1975 to 1984, he held various management positions at Siltec Corporation, a manufacturer of products for the semiconductor industry, including Vice President, Research and Development and General Manager of its Cybeq equipment division.

Mr. Lowe joined Asyst as Senior Vice President, Global Business Solutions, effective as of August 29, 2005. From 1989 to 2003, Mr. Lowe served in various positions at Read-Rite Corporation, a manufacturer of thin-film recording heads for disk and tape drives, and at one of Read-Rite’s affiliated companies. Mr. Lowe’s positions included President and Chief Executive Officer of Read-Rite from 2000-2003, Chief Executive Officer of Scion Photonics from 2000-2001, a majority-owned subsidiary of Read-Rite that supplied application-specific photonic components and subsystems to the telecommunications industry, and President and Chief Operating Officer of Read-Rite from 1997-2000. In June 2003, Read-Rite filed for voluntary Chapter 7 bankruptcy court protection. Before joining Read-Rite, he served in various sales positions with Microcom Corporation and IBM Corporation. Mr. Lowe holds bachelor degrees in Computer Science and Business Economics from the University of California, at Santa Barbara.

Mr. Debenham joined Asyst in September 2003 as Vice President, General Counsel and Secretary. From May 2000 to June 2003, Mr. Debenham was with myCFO, Inc., a financial services firm, most recently as its Senior Vice President and General Counsel. From April 1998 to April 2000, Mr. Debenham was Assistant General Counsel with Lam Research Corporation, a semiconductor equipment manufacturer. Prior to joining Lam, Mr. Debenham was in private practice from December 1989 to April 1998 with the law firm of Jackson Tufts Cole & Black, LLP, most recently as a partner with its Litigation Practice Group.

Mr. Janney joined Asyst, effective as of September 25, 2006, as interim Chief Financial Officer and interim Principal Accounting Officer. From 2004 to September 2006, Mr. Janney served as Engagement Manager for Jefferson Wells, a global provider of professional services in the areas of risk, controls, compliance, and financial process improvement. During and after Asyst’s fiscal year ended March 31, 2006, Mr. Janney, and other consultants from Jefferson Wells worked closely with Asyst, advising Asyst on its internal controls and processes relating to its financial reporting and assisting it in its continuing efforts to comply with its requirements under Section 404 of the Sarbanes-Oxley Act. Asyst paid an aggregate amount of approximately $1.68 million to Jefferson Wells for these and other consulting services from April 2005 through July 2006. For the current period of his service to Asyst in Item 11 below, Mr. Janney has agreed to devote his professional time to his positions at Asyst (but may provide limited services to Jefferson Wells that do not conflict with his agreed undertaking with Asyst). From 2002 to 2004, he served as an executive consultant providing financial, accounting and consulting services to a variety of

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companies. From 2000-2002 he was Chief Financial Officer for ZeBU, Inc., a privately held enterprise solution, web-enabled database software company. Before joining ZeBU, he served as Chief Financial Officer for Cholestech Corporation, a publicly-held medical diagnostic equipment manufacturer and as Acting Chief Financial Officer for the business operations of G. Gund III, an individual. Mr. Janney began his career with Price Waterhouse, LLP (1984-1992), serving most recently as Audit Manager.

There are no family relationships among any of our directors or executive officers.

Audit Committee

Charter and Purposes.  The Company’s Board of Directors has a separately designated, standing Audit Committee. The charter of the Audit Committee was amended and restated by our Board in May 2004 and is available on our website at www.asyst.com, by clicking on “Investor Relations,” then “Corporate Governance,” and then “Highlights.” The primary purposes of this committee are to oversee on behalf of our Board: (a) Asyst’s accounting and financial reporting processes and integrity of Asyst’s financial statements; (b) the audits of Asyst’s financial statements and appointment, compensation, qualifications, independence and performance of Asyst’s independent registered public accounting firm; (c) Asyst’s compliance with legal and regulatory requirements; and (d) Asyst’s internal control over financial reporting.

Members.  The current members of the audit committee are William Simon (Chair), Stanley Grubel, Robert McNamara, and Walter W. Wilson. Each of the audit committee members is an independent director as defined in Rule 4200 of the NASDAQ listing standards and under the additional SEC rules defining independence for members of an audit committee. Our Board has also determined that each of the members of the Audit Committee meets the requirement of the NASDAQ listing standards that the member is able to read and understand fundamental financial statements, including a company’s balance sheet, income and cash flow statements. Additionally, our Board has determined that each member meets the requirement of the NASDAQ listing standards that at least one member of the committee has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background which results in the individual’s financial sophistication.

Audit Committee Financial Expert.  Our Board has determined that incumbent director Mr. Simon meets the definition of an “audit committee financial expert,” as defined in SEC rules.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required during the fiscal year ended March 31, 2006, our officers, directors and greater than ten percent beneficial owners complied with all applicable Section 16(a) filing requirements as of that date.

Code of Ethics

Information relating to the Code of Ethics defined in SEC rules is set forth above in Part I, Item 1 “Business — Additional Information and Governance Matters,” and is incorporated herein by reference.

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Item 11 — Executive Compensation

Summary of Compensation

The following table shows for the fiscal years ended March 31, 2006, 2005 and 2004, compensation awarded or paid to, or earned by, our Chief Executive Officer, and our other four most highly compensated executive officers as of March 31, 2006 (the “Named Executive Officers”):

								Long Term Compensation Awards
								Awards				Payouts
			Annual Compensation					Restricted		Securities		LTIP		All Other
	Fiscal		Salary		Bonus			Stock		Underlying		Payouts		Compensation
Name and Principal Position	Year		($)		($)(1)			Awards ($)(2)		Options (#)		($)		($)
Stephen S. Schwartz(3)		2006		362,885		450,000			276,500		100,000		—		2,938	(4)
Chairman of the Board,		2005		330,000		—			—		100,000		—		1,098	(5)
President and Chief		2004		305,692		—			—		280,000		—		809	(5)
Executive Officer
Anthony C. Bonora		2006		270,963		150,000			128,375		30,000		—		223,931	(6)
Executive Vice President,		2005		260,000		30,675			—		60,000		—		200,012	(7)
Research and		2004		245,000		—			—		115,000		—		18,500	(8)
Development
Chief Technical Officer
Alan S. Lowe		2006		166,154		150,000			186,400		220,000		—		381	(5)
Senior Vice President,		2005		—		—			—		—		—		—
Global Business Solutions		2004		—		—			—		—		—		—
Robert J. Nikl(9)		2006		265,000		140,000			128,200		25,000		—		1,325	(5)
Senior Vice President,		2005		135,558		—			—		200,000		—		556	(5)
Chief Financial Officer		2004		—		—			—		—		—		—
Steve Debenham		2006		223,656		100,000			88,875		35,000		—		778	(10)
Vice President,General		2005		214,988		—			—		50,000		—		651	(11)
Counsel and Secretary		2004		115,500		45,000	(12)		—		100,000		—		256	(11)

(1)

Our officers are eligible for annual cash bonuses under the terms of our Executive Bonus Plan. Payments of bonuses are based upon achievement of specified company financial and individual performance objectives determined at the beginning of each fiscal year by our Board and its Compensation Committee. Company financial objectives are based, in part, on our operating budget and results of operations.

(2)

These amounts represent the closing market value of the awarded shares of restricted stock, determined as of the date of grant.

The number and value of the aggregate holdings of unvested restricted stock of the Named Executive Officers on March 31, 2006 were as follows, based on a closing market value of $10.41 on that date.

	Total Unvested		Value as of
Named Executive Officer	Restricted Shares Held (#)		March 31, 2006 ($)
Stephen S. Schwartz		53,333		555,197
Anthony C. Bonora		24,999		260,240
Alan S. Lowe		40,000		416,400
Robert J. Nikl		30,833		320,972
Steve Debenham		16,666		173,493

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Unvested restricted shares as of March 31, 2006, were held in the form of:

	Award		Award		Award		Award		Award
Name	Type A(A)		Type B(B)		Type C(C)		Type D(D)		Type E(E)
Schwartz		33,333		20,000		0		0		0
Bonora		14,999		10,000		0		0		0
Lowe		0		0		30,000		10,000		0
Nikl (F)		8,333		7,500		0		0		15,000
Debenham		11,666		5,000		0		0		0

(A)	Vests in increments of one half on each of March 31, 2007, and May 16, 2008.
(B)	Vests, if at all, on May 16, 2008, as to 100% of the shares if Asyst’s market capitalization has appreciated relative to the top one-third of an identified group of semiconductor capital equipment companies determined to be comparable to Asyst, 50% of the shares if Asyst’s market capitalization has appreciated relative to the middle one-third of that group, and none of the shares if Asyst’s market capitalization has only appreciated relative to the bottom one-third of that group (with the measurement of the relative market capitalization performance to be made as of March 31, 2008).
(C)	Vests in increments of one-third on each of August 31, 2006, August 31, 2007, and August 31, 2008.
(D)	Vests, if at all, on August 31, 2008, as to 100% of the shares if Asyst’s market capitalization has appreciated relative to the top one-third of an identified group of semiconductor capital equipment companies determined to be comparable to Asyst, 50% of the shares if Asyst’s market capitalization has appreciated relative to the middle one-third of that group, and none of the shares if Asyst’s market capitalization has only appreciated relative to the bottom one-third of that group (with the measurement of the relative market capitalization performance to be made as of March 31, 2008).
(E)	Vests in increments of one-half on each of April 29, 2008 and April 29, 2009
(F)	Upon Mr. Nikl’s termination of employment as of June 30, 2006, the unvested restricted shares allocated to him in the table above were deemed cancelled.

(3)	Dr. Schwartz was appointed our President and Chief Executive Officer in August 2002 and the Chair of our Board in January 2003.
(4)	Consists of a five-year service award of $1,500, premiums for term life insurance and supplemental disability insurance totaling $1,160 and an in-kind service award valued at $278.
(5)	Consists of premiums for term life and supplemental disability insurance.
(6)	Consists of (i) a $222,018 distribution of previously earned salary but deferred to our Executive Deferred Compensation Program, (ii) payments totaling $1,501 under our inventor incentive compensation program as consideration for assignment to us of rights to patentable inventions developed during employment, (iii) a payment of $100 as a special recognition award, and (iv) an in-kind service award valued at $312.
(7)	Consists of (i) a $197,679 distribution of previously earned salary but deferred to our Executive Deferred Compensation Program and (ii) payments of $2,333 under our inventor incentive compensation program as consideration for assignment to us of rights to patentable inventions developed during employment.
(8)	Consists of payments under our inventor incentive compensation program as consideration for assignment to us of rights to patentable inventions developed during employment.
(9)	Mr. Nikl gave us notice on May 26, 2006, that he would be resigning as our Chief Financial Officer effective as of June 19, 2006 and leaving Asyst on June 30, 2006.
(10)	Consists of (i) premiums for term life and supplemental disability insurance totaling $474 and (ii) an in-kind service award valued at $304.
(11)	Consists of premiums for term life, supplemental disability insurance, and health club membership dues.
(12)	Consists of a sign-on bonus.

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Stock Option Grants and Exercises

We have awarded options and restricted stock to our executive officers under our 1993 Stock Option Plan and 2003 Equity Incentive Plan. On June 22, 2003, the 1993 Plan expired; therefore, no shares are available for future grant under that plan.

The following tables show for the fiscal year ended March 31, 2006, certain information regarding options awarded to and exercised by the Named Executive Officers during the fiscal year, and held at fiscal year end by the Named Executive Officers:

Option Grants in Last Fiscal Year

				Percentage of							Potential Realizable
				Total Options							Value at Assumed
	Number of			Granted to							Annual Rates of Stock
	Securities Underlying			Employees in			Exercise				Price Appreciation for
	Options Granted			Fiscal Year			Price		Expiration		Option Term(3)
Name	(#)			(1)			($/Sh)(2)		Date		5%($)		10%($)
Stephen S. Schwartz		50,000	(4)		2.99	%		3.95		5/15/2011		67,169		152,383
		50,000	(5)		2.99	%		3.95		5/15/2011		67,169		152,384
		100,000			5.98	%						134,338		304,767
Anthony C. Bonora		30,000	(4)		1.80	%		3.95		5/15/2011		40,301		91,340
Alan S. Lowe		220,000	(6)		13.17	%		4.81		8/30/2011		359,889		816,466
Robert J. Nikl		25,000	(4)		1.50	%		3.95		5/15/2011		33,584		76,192
Steve Debenham		10,000	(4)		0.60	%		3.95		5/15/2011		13,434		30,476
		25,000	(7)		1.50	%		4.13		5/26/2011		35,115		79,664
		35,000			2.10	%						48,549		110,140

(1)	Based on an aggregate of 1,671,083 options awarded to directors and employees of Asyst in fiscal year 2006, including the Named Executive Officers.
(2)	The exercise price per share of each option is equal to the fair market value of the underlying stock on the date of the award.
(3)	The potential realizable value is calculated based on the six-year terms of the options. It is calculated by assuming that the stock price on the date of award appreciates at the indicated annual rate, compounded annually for the entire term of the option, and that the option is exercised and sold on the last day of its term for the appreciated stock price.
(4)	Consists of options that vest in the following increments: one-third on each of March 31, 2006, March 31, 2007, and May 16, 2008.
(5)	Consists of options that vest as of the date the closing price of the Company’s common stock reported on NASDAQ has been $15.00 or more for each of ten consecutive days.
(6)	Consists of options that vest in the following increments: one-third on August 31, 2006, one-third on August 31, 2007, and one-third on August 31, 2008.
(7)	Consists of options that vest in full as of December 31, 2006.

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Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values, as of March 31, 2006

					Number of Securities		Value of Unexercised
	Shares		Value		Underlying Unexercised		In-the-Money Options
	Acquired on		Realized		Options at FY-End (#)		at FY-End ($)
Name	Exercise (#)		($)(1)		Exercisable/Unexercisable		Exercisable/Unexercisable(2)
Stephen S. Schwartz		0		0		752,917/252,083		1,259,886/1,257,581
Anthony C. Bonora		95,000		401,382		360,747/101,250		831,207/426,750
Alan S. Lowe		0		0		0/220,000		0/1,232,000
Robert J. Nikl(3)		0		0		58,334/166,666		350,671/928,162
Steve Debenham		0		0		108,691/76,309		167,417/172,350

(1)	Based on the fair market value of our common stock as of the date of exercise, minus the exercise price of the option.
(2)	Based on the fair market value of our common stock as of March 31, 2006, which was $10.41, minus the exercise price of the option.
(3)	In light of Mr. Nikl’s termination of employment as of June 30, 2006, all of his unexercised options have been cancelled.

Employment, Severance and Change of Control Agreements

In January 2001, we entered into an at-will employment letter agreement with Dr. Schwartz, initially to join Asyst as its Senior Vice President, Product Groups. Under the terms of the agreement, Dr. Schwartz receives an annual base salary and an annual management target bonus (depending upon Company and individual performance objectives achieved). The employment agreement also provided for an award to Dr. Schwartz to purchase 225,000 shares of our common stock vesting over four years from the date of award, and an additional award to purchase 150,000 shares of our common stock which would vest five years and three months from the award date (or upon the earlier achievement of agreed performance objectives). Dr. Schwartz would also be eligible to participate in all employee welfare and benefit plans normally offered to other senior executives of Asyst. In August 2004, the 150,000 share option award was amended to extend the term from six to ten years. In May 2006, the Compensation Committee set Dr. Schwartz’s base salary at $400,000 and target bonus at up to 125% of base salary.

In August 2003, we entered into an at-will employment letter agreement with Mr. Debenham to join Asyst as its Vice President and General Counsel. Under the terms of the agreement, Mr. Debenham receives an annual base salary and an annual management target bonus (depending upon Company and individual performance objectives achieved). The agreement also provided for an award to Mr. Debenham to purchase 100,000 shares of our common stock, 1/42 of which award vests and becomes exercisable per month, commencing as of the seventh month following the date of commencement of his employment. Under the agreement, the award was subject to approval of our Board. Mr. Debenham also received a bonus of $45,000 in conjunction with commencement of his employment. Under the agreement, Mr. Debenham would also be eligible to participate in all employee welfare and benefit plans normally offered to other senior executives of Asyst. In May 2006, the Compensation Committee set Mr. Debenham’s base salary at $240,000 and target bonus at up to 65% of base salary.

In May 2006, the Compensation Committee set for Mr. Bonora a base salary at $285,000 and target bonus at up to 75% of base salary. Asyst has not otherwise entered into an employment agreement with Mr. Bonora.

In August 2005, we entered into an at-will employment letter agreement with Mr. Lowe to join Asyst as its Senior Vice President, Global Business Solutions. Under the terms of the agreement, Mr. Lowe receives an annual base salary and an annual management target bonus (depending upon Company and individual performance objectives achieved). The agreement also provided for awards to Mr. Lowe of 30,000 shares of our common stock and an option to purchase an additional 220,000 shares of our common stock, 1/3rd of each such award vests and/or becomes exercisable on each anniversary of the award date. The agreement also provided for an additional award to Mr. Lowe of 10,000 shares of our common stock, which vest 100%, 50% or 0% as of the third anniversary of the award date, to the extent the Company’s market capitalization has performed over our fiscal years 2006 through

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2008, relative to an established group of peer companies. Under the agreement, the awards were subject to approval of our Board. Additionally, under the agreement Mr. Lowe was assured of a minimum bonus payment by the Company of $150,000 under our fiscal year 2006 performance-based bonus plan. Mr. Lowe was also eligible under the agreement to participate in all employee welfare and benefit plans normally offered to other senior executives of Asyst. In May 2006, the Compensation Committee set Mr. Lowe’s base salary at $315,000 and target bonus at up to 75% of base salary.

In September 2006, Mr. Janney joined Asyst as interim Chief Financial Officer and interim Principle Accounting Officer under a fixed term contract, through November 30, 2006. Mr. Janney (described in Mr. Janney’s biography set forth under Item 10 above), Jefferson Wells and Asyst entered into a fixed term contract for Mr. Janney’s services to be provided to Asyst through November 30, 2006. Under the contract, the Company will pay to Jefferson Wells an hourly rate of $200 for Mr. Janney’s services during that period, and reimburse reasonable out-of-pocket expenses actually incurred. Asyst agreed under the contract to provide Mr. Janney with indemnification consistent with the Company’s general indemnification policies. Mr. Janney is not eligible for any other compensation or benefits from the Company

We have entered into Change in Control Agreements with each of Dr. Schwartz (October 2003), Mr. Bonora (January 2005), Mr. Lowe (May 2006), and Mr. Debenham (May 2006). Under each agreement, the officer will be entitled to certain compensation and benefits in the event his employment is terminated, without cause or under certain circumstances identified in the agreement, within the two-year period following a change in control of our Company. The compensation and benefits may include the officer’s base salary, annual or discretionary bonus, unused vacation, unreimbursed business expenses, deferred compensation, and other compensation and benefits accrued or earned through the date of termination of his employment. In addition, the officer may also receive under the agreement: (a) compensation equal to two times the sum of (x) his annual base salary and (y) the average of his annual bonuses for the three years prior to such termination; (b) continuing coverage for two years under life, disability, accident and health benefit programs covering senior executives; and (c) immediate accelerated vesting of any unvested stock options, with up to 12 months following termination of his employment to exercise stock options held by the officer (and, in the case of Dr. Schwartz, 24 months following termination of his employment to exercise certain options covering 375,000 shares). The agreement remains in effect for two years (provided a change in control has not occurred within that two-year period). In the case of agreements for Messrs. Lowe and Debenham, there are certain additional provisions relating to Section 409A of the Code, including an extended exercise period that will not exceed the later of (x) the 15th day of the 3rd month following the date at which, or (y) December 31 of the calendar year in which, the right to exercise such option would have otherwise expired; provided that in no event will that exercise period extend beyond the date that is one year after the termination of employment, and any payment that is “nonqualified deferred compensation” subject to Section 409A of the Code will be delayed for six months following termination of employment.

In the event of an acquisition of Asyst or certain other corporate transactions, as defined in our 2003 Plan or 1993 Employee Stock Option Plan, any surviving or acquiring corporation may assume or continue awards outstanding under the plans or may substitute similar awards. If any surviving or acquiring corporation does not assume or continue such awards, or substitute similar awards, then with respect to awards held by participants whose service with Asyst or an affiliate has not terminated as of the effective date of the corporate transaction, the vesting of such awards (and, if applicable, the time during which such awards may be exercised) will be accelerated in full and the awards will terminate if not exercised (if applicable) at or prior to such effective date.

On May 9, 2006, Warren C. Kocmond, Jr. resigned from his position as our Senior Vice President, Chief Operating Officer. Under a separation agreement entered into on May 12, 2006, and in lieu of any bonus with respect to fiscal year 2006 and in return for a general release in favor of Asyst and confirmation of other obligations, he was entitled on May 31, 2006, to a lump sum payment of $200,000 and accelerated vesting of 10,000 shares of restricted stock that would otherwise have vested in 2007 and 2008 if he remained employed through those dates. He remained an employee of Asyst through May 31, 2006 at his then current salary. His other outstanding equity awards cease vesting on May 31, 2006, but otherwise remain exercisable in accordance with the original terms of the awards. Under the terms of an existing award, Mr. Kocmond received in conjunction with termination of his employment accelerated vesting of 7,500 shares of restricted stock that otherwise would have vested in 2007. His

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existing employment agreement and change of control agreement are deemed terminated and superseded by this separation agreement.

On May 26, 2006, Robert J. Nikl, then serving as Senior Vice President, Chief Financial Officer, gave us notice on May 26, 2006, that he would be resigning his position as Chief Financial Officer, effective as of June 19, 2006, and leaving Asyst on June 30, 2006. His employment and change of control agreements are deemed terminated on that latter date and he received accrued compensation legally owing to him as of that date.

Director Compensation

The following summarizes our standard compensation arrangements for non-employee directors’ service on our Board of Directors and its committees. Dr. Schwartz, Chairman and Chief Executive Officer, does not receive additional compensation for his service as a director. Non-employee directors also are reimbursed for their expenses incurred in connection with attendance at Board and committee meetings, in accordance with our reimbursement policy. In addition, non-employee directors are eligible to receive service awards as part of a Company-wide recognition program. The awards are based solely on length of service with Asyst, and the directors’ eligibility is the same as for all other Asyst employees. The eligible employee or director may select from a pre-determined selection of items that in the past has included commonly available goods that Asyst considers individually to have de minimis value.

Sign-on equity award.  Upon appointment to our Board, Asyst grants to each new non-employee director a sign-on award, on a deferred basis, of shares of our common stock with a value equal to $120,000 at the date of the award. The award vests over three years from the date of award, but the shares subject to the award cannot be sold unless and until the recipient has ceased to be a member of our Board for any reason (however, members are permitted to direct the sale of incremental shares subject to such awards to cover taxes or fees assessed on imputed or other income associated with vesting).

Annual equity award.  In fiscal year 2006, each non-employee director received an annual award of shares of our common stock (13,000 shares for each director) with a value equal to approximately $60,840, determined as of the beginning of the fiscal year. The award vests over three years from the date of the award, but the shares subject to the award cannot be sold during the three-year period unless and until the recipient ceases to be a member of the Board for any reason (however, members are permitted to direct the sale of incremental shares subject to such awards to cover taxes or fees assessed on imputed or other income associated with vesting). In fiscal year 2007, each non-employee director received an annual award of shares of our common stock (13,000 shares for each director) with a value equal to approximately $126,000, determined as of the beginning of the fiscal year. The award vests over three years from the date of the award, and is subject to the same restrictions on sale over the vesting term.

Director cash retainer and board meeting fees.  Each non-employee director receives:

•  a $35,000 annual cash retainer, or a pro-rata portion thereof, for service on our Board, and

•  $2,000 for each Board meeting attended in person and $1,000 if attended telephonically.

Committee cash retainer and committee meeting fees.  Each member of the Audit Committee, the Compensation Committee and the Governance and Nominating Committee receives:

•  a $5,000 annual cash retainer, or pro-rated portion thereof, and

•  $1,000 for each committee meeting attended in person and $500 if attended telephonically (including for service on Special Committees).

Committee chair cash fees.  The chair of the Audit Committee and, if the audit committee financial expert is not also serving as the chair of the audit committee, the audit committee financial expert, each receives an additional annual cash retainer of $12,500, or pro-rated portion thereof. The chair of the Compensation Committee and Governance and Nominating Committee each receives an additional annual cash retainer of $7,500, or pro-rated portion thereof.

Other fees and reimbursements.  An annual cash retainer of $5,000, or pro-rated portion thereof, is paid to each non-employee director of our Board who also serves as a director of our majority-owned subsidiary, Asyst

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Japan, Inc. Directors are not paid by the hour for work performed on special projects. Instead, directors will receive $5,000 per assignment or $1,000 per day, as determined by the Board, for projects outside the United States. The members of our Board also are reimbursed for their expenses incurred in connection with attendance at Board and committee meetings, in accordance with our reimbursement policy.

The following table sets forth the compensation earned by our non-employee directors for fiscal year 2006:

							Committee					Total		Stock
	Annual		Committee		All Meeting		Chair/Financial		Other			Cash		Awards
Non-employee Director	Retainer		Retainer(s)		Fees(1)		Expert Fees		Payments			Payments		($)(2)
Stanley Grubel	$	35,000	$	15,000	$	29,000	$	7,500				$	86,500	$	60,840
Tsuyoshi Kawanishi	$	35,000			$	13,000			$	40,829	(3)	$	88,829	$	60,840
Robert A. McNamara	$	35,000	$	5,000	$	17,000						$	57,000	$	60,840
Anthony E. Santelli	$	35,000	$	5,000	$	22,000	$	7,500				$	69,500	$	60,840
William Simon(4)	$	35,000	$	5,000	$	28,000		5,000				$	73,000	$	60,840
Walter W. Wilson(5)	$	35,000	$	10,000	$	25,000		5,000				$	75,000	$	60,840

(1)	Includes cash attendance fees for meetings of the Board of Directors and committees on which the individual serves, including meetings of a Special Committee, in fiscal year 2006.
(2)	Represents the value as of April 1, 2005, of the number of shares underlying restricted stock awarded as the annual stock award for fiscal year 2006 to non-employee directors, having vesting and other terms summarized above. No director joined the board during fiscal 2006, and therefore no sign-on stock was awarded.
(3)	Represents a $5,000 annual retainer for service as a director of our majority-owned subsidiary Asyst Japan, Inc. and consulting fees of JPY400,000 paid monthly for services directly to that subsidiary (such consulting fees totaled US$40,829 for fiscal year 2006, based on March 31, 2006 exchange rates).
(4)	Mr. Simon is designated as our audit committee financial expert, and beginning October 1, 2005 is Chair of the Audit Committee.
(5)	Mr. Wilson served as Chair of the Audit Committee through September 30, 2005.

This table does not reflect (i) reimbursement of travel or other expenses incurred in connection with attending meetings, (ii) de minimis time-based service awards, or (iii) equity awards or other compensation granted or paid for prior years. There were no fees paid for special projects with respect to fiscal year 2006

Item 12 —  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the ownership of our common stock as of August 31, 2006, by:

•  each incumbent director;

•  each of our named executive officers;

•  all of our named executive officers and incumbent directors as a group; and

•  all those known by Asyst to be beneficial owners of more than five percent (5%) of our common stock.

Beneficial ownership is determined in accordance with SEC rules, and generally includes voting or investment power with respect to securities. Beneficial ownership also includes shares of our common stock subject to options currently exercisable within 60 days after August 31, 200. These shares are not deemed outstanding for purposes of computing the percentage ownership of each other person. Beneficial ownership excludes shares of our common stock represented by restricted stock units whose distribution a recipient has elected to defer. Percentage of beneficial ownership is based on 48,953,784 shares of our common stock outstanding as of August 31, 2006.

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	Beneficial
	Ownership(1)
	Number of		Percent of
Beneficial Owner	Shares (#)		Total (%)
Wellington Management Company LLP(2)		6,681,000		13.6	%
75 State Street Boston, MA 02109
Alexandra Global Master Fund L.P.(3)		4,808,959		9.8	%
767 Third Avenue, 39th Floor New York, NY 10017
Stephen S. Schwartz(4)		956,767		2.0	%
Anthony C. Bonora(5)		434,567		*
Alan S. Lowe(6)		73,334		*
Robert J Nikl(7)		2,503		*
Steve Debenham(8)		165,180		*
Stanley Grubel(9)		121,164		*
Tsuyoshi Kawanishi(10)		72,922		*
Robert A. McNamara(11)		79,944		*
Anthony E. Santelli(12)		73,978		*
William Simon(13)		39,315		*
Walter W. Wilson(14)		109,664		*
All current directors and named executive officers as a group (11 persons)(15)		2,129,338		4.3	%

*	Less than one percent.
(1)	This table is based upon information supplied by officers, directors and principal shareholders, and Schedules 13G filed with the SEC. Schedule 13G provides information as to beneficial ownership only as of their dates of filing, and, consequently, the beneficial ownership of Asyst’s principal shareholders may have changed between such dates and August 31, 2006. Unless otherwise indicated in the footnotes to this table, and subject to community property laws where applicable, Asyst believes that each of the shareholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned.
(2)	In an amended Schedule 13G filed February 14, 2006, Wellington Management Company LLP, in its capacity as investment adviser, reports shared voting power over 3,479,000 shares, and shared dispositive power over 6,681,000 shares, which are reportedly held of record by clients of Wellington Management Company LLP.
(3)	In a Schedule 13G filed December 12, 2005, Alexandra Global Master Fund Ltd. reports shared voting and dispositive power over 4,715,744 shares, and Alexandra Investment Management, LLC, Mikhail A. Filimonov, and Dimitri Sogoloff each report shared voting and dispositive power over 4,808,959 shares. That Schedule 13G also reported that of the total shares reported, 4,715,744 are shares of common stock that Alexandra Global Master Fund Ltd. has the right to acquire upon conversion of 5.75% Convertible Subordinated Notes Due 2008 issued by Asyst.
(4)	Includes 834,167 shares subject to stock options exercisable within 60 days after August 31, 2006.
(5)	Includes 402,000 shares subject to stock options exercisable within 60 days after August 31, 2006.
(6)	Consists of 73,334 shares subject to stock options exercisable within 60 days of August 31, 2006.
(7)	Mr. Nikl gave us notice on May 26, 2006, that he would be resigning as our Chief Financial Officer effective as of June 19, 2006 and leaving Asyst on June 30, 2006. The figure in the table is his estimated beneficial ownership as of August 31, 2006.
(8)	Includes 122,977 shares subject to stock options exercisable within 60 days after August 31, 2006.
(9)	Includes 99,500 shares subject to stock options exercisable within 60 days after August 31, 2006. Excludes 1,750 shares represented by restricted stock units whose distribution Mr. Grubel has elected to defer.

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(10)	Includes 49,508 shares subject to stock options exercisable within 60 days after August 31, 2006.
(11)	Includes 47,500 shares subject to stock options exercisable within 60 days after August 31, 2006.
(12)	Includes 39,062 shares subject to stock options exercisable within 60 days after August 31, 2006.
(13)	Excludes 1,313 shares represented by restricted stock units whose distribution Mr. Simon has elected to defer.
(14)	Includes 91,500 shares subject to stock options exercisable within 60 days after August 31, 2006. Excludes 5,250 shares represented by restricted stock units whose distribution Mr. Wilson has elected to defer.
(15)	Includes 1,759,548 shares beneficially owned by all current directors and executive officers that are subject to options exercisable within 60 days after August 31, 2006. Excludes 8,313 shares represented by restricted stock units whose distribution the recipient has elected to defer.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides certain information as of our fiscal year end, March 31, 2006, with respect to all of our equity compensation plans then in effect.

							Number of Securities
	Number of						Remaining Available
	Securities						for Issuance Under
	to be Issued Upon			Weighted-Average			Equity Compensation
	Exercise of			Exercise Price of			Plans (Excluding
	Outstanding Options,			Outstanding Options,			Securities Reflected in
	Warrants and Rights			Warrants and Rights			Column (a))
Plan Category	(a)(1)			(b)			(c)
Equity compensation plans approved by security holders		5,301,668	(2)	$	9.55	(3)		1,703,439	(4),(5)
Equity compensation plans not approved by security holders		1,583,931	(6)	$	8.01			92,725
Total		6,876,412		$	9.20			1,796,164	(7)

(1)	Column (a) does not include shares of restricted stock that are deemed outstanding, but does include shares underlying restricted stock units outstanding as of March 31, 2006, that may be delivered in the future upon satisfaction of applicable vesting requirements and deferral arrangements. The weighted average exercise price in column (b) does not account for shares underlying these latter awards that have no exercise price.
(2)	We have four equity compensation plans approved by shareholders under which awards remain outstanding: 2003 Incentive Plan, 1993 Employee Stock Option Plan, 1993 Non-Employee Directors’ Stock Plan, and 1993 Employee Stock Purchase Plan. The column (a) number does not include Purchase Plan shares or previously issued shares of restricted stock. The column (a) number (i) does include 9,187 shares of common stock that are issuable under restricted stock units that have been granted but have not yet vested but (ii) does not include shares issued under granted stock awards.
(3)	This calculation does not take into account either (i) granted but unvested stock units with no exercise price or (ii) granted stock awards.
(4)	Of these shares, 116,205 remain available as of March 31, 2006 for purchase under our Purchase Plan, and 1,587,234 remain available as of March 31, 2006 for issuance under future awards from our 2003 Plan. The latter number does not include the indefinite number of additional shares that may become available for future award under the 2003 Plan due to cancellations of options or other expirations or forfeitures that by the terms of the applicable plan are added back to the available share reserve. The 2003 Plan currently provides that up to 30% of the shares authorized for issuance may be awarded as restricted stock.
(5)	The 1993 Employee Stock Option Plan and 1993 Non-Employee Directors’ Stock Plan have expired or been terminated, and no shares remain available for issuance as future awards under those expired or terminated plans.
(6)	This total includes 1,981 shares issuable under outstanding options as of March 31, 2006, with a weighted average exercise price of $2.19 that we assumed or otherwise issued outside of our other equity compensation

116

plans in connection with our acquisition of other companies. No additional options may be awarded under any plans or other arrangements assumed in these acquisitions.

(7)

These shares represent the number of shares available for issuance as of March 31, 2006 under future awards of stock options or restricted stock from the 2001 Non-Officer Equity Plan, described below. This number does not include the indefinite number of additional shares that may become available for future award due to cancellations of options or other expirations or forfeitures that by the terms of the applicable plan are added back to the available share reserve.

2001 Non-Officer Equity Plan

In January 2001, our Board adopted the 2001 Non-Officer Equity Plan, and subsequently amended it in July 2001 and March 2002. The 2001 Non-Officer Equity Plan, as amended, or the 2001 Plan, has not been approved by shareholders. The 2001 Plan reserves for issuance up to 2,100,000 shares of our common stock pursuant to: (a) the exercise of options awarded under the 2001 Plan; (b) the award of stock bonuses under the 2001 Plan; and (c) the award of restricted stock under the 2001 Plan. The number of shares available for future awards under the 2001 Plan are subject to adjustment for any future stock dividends, splits, mergers, combinations, or other changes in capitalization as described in the 2001 Plan.

Eligibility for Participation.  Employees and consultants who are not directors or officers for Section 16 reporting purposes are eligible to receive awards under the 2001 Plan.

Terms of Options.  Nonstatutory stock options are available for award under the 2001 Plan. The exercise price of options awarded under the 2001 Plan may not be less than 85% of the fair market value of our common stock on the date of award. Payment of the exercise price may be made in cash at the time the option is exercised, or at the discretion of the Board: (a) by delivery of other common stock of Asyst; (b) pursuant to a deferred payment arrangement; or (c) in any other form of legal consideration acceptable to the Board. The term of a stock option under the 2001 Plan may not exceed ten years.

Options awarded under the 2001 Plan are generally made subject to vesting over time. Options may also be made exercisable under conditions the Board may establish, such as if the optionee remains employed until a specified date or if specified performance goals have been met. If an optionee’s employment terminates for any reason, the option remains exercisable for a period of time following termination, as determined by the Board and provided in the respective stock option agreement.

Terms of Stock Bonuses and Purchases of Restricted Stock.  The Board determines the purchase price for a restricted stock purchase but the purchase price may not be less than 85% of the fair market value of our common stock on the date of purchase. The Board may award stock bonuses in consideration of past services without a purchase payment. The purchase price of stock acquired pursuant to a restricted stock purchase agreement under the 2001 Plan must be paid either in cash at the time of purchase or: (a) by delivery of other common stock of Asyst; (b) pursuant to a deferred payment arrangement; or (c) in any other form of legal consideration acceptable to the Board. Shares of stock sold or awarded under the 2001 Plan may, but need not, be subject to a repurchase option in favor of Asyst in accordance with a vesting schedule as determined by the Board. The Board has the power to accelerate the vesting of stock acquired pursuant to a restricted stock purchase agreement under the 2001 Plan. Rights under a stock bonus or restricted stock bonus agreement may not be transferred.

Effect of Certain Corporate Events.  The 2001 Plan requires that, in the event of specified types of merger or other corporate reorganization affecting us, any surviving or acquiring corporation must either assume any stock awards outstanding under the 2001 Plan, or substitute similar stock awards for those outstanding under this plan. In the event that any surviving corporation declines to assume or continue the stock awards outstanding under the 2001 Plan, or to substitute similar stock awards, then stock awards under the 2001 Plan that are held by persons then performing services as employees or as consultants for us become fully vested and exercisable, and will terminate if not exercised prior to the merger or other corporate reorganization affecting us.

117

Item 13 — Certain Relationships and Related Transactions

See information concerning Mr. Janney in Items 10 and 11 above, which is incorporated in this item by reference.

Item 14 — Principal Accountant Fees and Services

The following is a summary of the fees and expenses billed to Asyst by PricewaterhouseCoopers LLP for professional services with respect to Audit Fees billed for, and other listed services rendered during, the fiscal years ended March 31, 2006, and March 31, 2005:

	March 31,		March 31,
Fee Category	2006		2005
Audit Fees	$	4,822,886	$	4,721,992
Audit-Related Fees		—		—
Tax Fees		458,391		414,260
All Other Fees		—		—
Total Fees	$	5,281,277	$	5,136,252

Audit Fees:  This category includes fees and expenses for the audit of our annual financial statements and audit of our management’s assessment of internal control contained in our most recently filed Form 10-K, review of the financial statements included in our quarterly reports on Form 10-Q, services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements for those fiscal years, and statutory audits required by non-U.S. jurisdictions.

Audit-Related Fees:  No services in this category were rendered during fiscal year 2006 or fiscal year 2005

Tax Fees:  The services in fiscal year 2006 and 2005 for the fees and expenses disclosed under this category include tax return preparation, technical tax advice, and tax compliance.

All Other Fees:  No services in this category were rendered during fiscal year 2006 or fiscal year 2005.

Under SEC rules governing independence of the independent registered public accounting firm, the Audit Committee of our Board must approve in advance all audit and permissible non-audit services to be provided by that accounting firm. Under these rules, the Audit Committee may adopt pre-approval policies and procedures that are detailed as to the particular service, require that the Audit Committee be informed about each service, and do not result in the delegation of the Audit Committee’s authority to management. At this time, the Audit Committee has not implemented other pre-approval policies. Notwithstanding any pre-approval policies that may be implemented, all permissible advisory services relating to internal control over financial reporting are pre-approved by the Audit Committee.

PART IV

Item 15 — Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Annual Report on Form 10-K

(1) Financial Statements

See Index to Consolidated Financial Statements under Item 8 on page 43 of this Annual Report on Form 10-K.

(2) Financial Statement Schedule

See Index to Consolidated Financial Statements under Item 8 on page 43 of this Annual Report on Form 10-K.

118

(3) Exhibits

The exhibits listed in the accompanying Index to Exhibits are filed or incorporated by reference as part of this Annual Report on Form 10-K.

(b) Exhibits

Exhibit				Incorporated by Reference							Filed
Number			Exhibit Description	Form		Ex. No.			File No.	Filing Date	Herewith
	2	.1‡	Share Purchase Agreement dated as of June 22, 2006, between Shinko Electric Co., Ltd., Asyst Technologies, Inc. and Asyst Japan Inc. The schedules to the Share Purchase Agreement are omitted but will be furnished to the Securities and Exchange Commission supplementally upon request.		8-K		2	.1	000-22430	7/20/2006
	3	.1	Amended and Restated Articles of Incorporation of the Company.		S-1		3	.1	333-66184	7/19/1993
	3	.2	Bylaws of the Company.		S-1		3	.2	333-66184	7/19/1993
	3	.3	Certificate of Amendment of the Amended and Restated Articles of Incorporation, filed September 24, 1999.		10-Q		3	.2	000-22430	10/21/1999
	3	.4	Certificate of Amendment of the Amended and Restated Articles of Incorporation, filed October 5, 2000.		DEF 14A		App	.	000-22430	7/31/2000
	4	.1	Rights Agreement among the Company and Bank of Boston, N.A., as Rights Agent, dated June 25, 1998.		8-K		99	.2	000-22430	6/29/1998
	4	.2	Indenture dated as of July 3, 2001 between the Company, State Street Bank and Trust Company of California, N.A., as trustee, including therein the forms of the notes.		10-Q		4	.3	000-22430	8/14/2001
	4	.3	Registration Rights Agreement dated as of July 3, 2001 between the Company and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, and ABN Amro Rothschild LLC.		10-Q		4	.4	000-22430	8/14/2001
	4	.4	Amendment to Rights Agreement among the Company and Bank of Boston, N.A. as Rights Agent, dated November 30, 2001.		10-K		4	.5	000-22430	6/28/2002
	10	.1*	Form of Indemnity Agreement entered into between the Company and certain directors.		S-1		10	.1	333-66184	7/19/1993
	10	.2*	Company’s 1993 Stock Option Plan and related form of stock option agreement.		S-1		10	.2	333-88246	2/13/1995
	10	.3*	Company’s 1993 Employee Stock Purchase Plan and related offering document.		S-1		10	.3	333-66184	7/19/1993
	10	.4*	Company’s 1993 Non-Employee Directors’ Stock Option Plan and related offering document		S-1		10	.4	333-66184	7/19/1993
	10	.5	Hewlett-Packard SMIF License Agreement dated June 6, 1984.		S-1		10	.5	333-66184	7/19/1993

119

Exhibit				Incorporated by Reference							Filed
Number			Exhibit Description	Form		Ex. No.			File No.	Filing Date	Herewith
	10	.6*	Employment Agreement between the Company and Stephen S. Schwartz, Ph.D., dated January 11, 2001.		10-K		10	.27	000-22430	6/19/2001
	10	.7†	Agreement on Bank Transactions between Asyst Japan, Inc., or AJI, and Tokyo Mitsubishi Bank dated March 13, 2001.		10-Q		10	.28	000-22430	8/14/2001
	10	.8†	Share Purchase Agreement between Shinko Electric Co., Ltd. and Asyst Japan Inc., dated as of May 24, 2002.		10-Q		10	.38	000-22430	11/12/2002
	10	.9†	Shareholders Agreement between Shinko Electric Co., Ltd. and Asyst Japan Inc., dated as of May 24, 2002.		10-Q		10	.39	000-22430	11/12/2002
	10	.10‡	Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, dated as of September 5, 2002.		10-Q		10	.40	000-22430	11/12/2002
	10	.11†	Amendment No. 1 to Shareholders Agreement between Shinko Electric Co., Ltd. and Asyst Japan Inc., dated as of October 16, 2002.		10-Q		10	.43	000-22430	2/11/2003
	10	.12‡	Patent Assignment and Cross-License and Trademark License Agreement among the Company, Entegris Cayman Ltd. and Entegris, Inc., dated as of February 11, 2003.		10-K/A		10	.44	000-22430	10/29/2003
	10	.13*	Change-In-Control Agreement between the Company and Stephen S Schwartz dated as of October 20, 2003.		10-Q		10	.47	000-22430	11/12/2003
	10	.14‡	Amendment and Modification Agreement to Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, effective as of September 22, 2003.		10-Q		10	.50	000-22430	2/10/2004
	10	.15*	Form of Indemnity Agreement entered into between the Company and certain executive officers.		10-K		10	.33	000-22430	6/10/2004
	10	.16*	Form of Agreement to Arbitrate Disputes and Claims entered into between the Company and its executive officers.		10-K		10	.37	000-22430	6/10/2004
	10	.17*	Company’s Compensation Program for Non-employee Directors.								X
	10	.18*	Company’s Executive Deferred Compensation Plan.		10-K		10	.39	000-22430	6/10/2004
	10	.19*	Employment Agreement between the Company and Stephen Debenham dated August 21, 2003.		10-K		10	.40	000-22430	6/10/2004
	10	.20	Amended and Restated Loan and Security Agreement between the Company and Comerica Bank, dated May 15, 2004.		10-Q		10	.47	000-22430	8/5/2004

120

Exhibit				Incorporated by Reference							Filed
Number			Exhibit Description	Form		Ex. No.			File No.	Filing Date	Herewith
	10	.21*	Forms of Stock Option Award Notice and Stock Option Award Agreement entered into between the Company and certain employees, directors, and consultants (2003 Equity Incentive Plan).		10-Q		10	.50	000-22430	12/30/2004
	10	.22*	Forms of Restricted Stock Award Agreement for restricted stock awarded to directors, Restricted Stock Award Agreement for restricted stock units awarded to directors, Restricted Stock Award Agreement for restricted stock awarded to employees, and Restricted Stock Award Agreement for restricted stock units awarded to employees.								X
	10	.23*	Certificate of Amendment to Option Grants dated August 18, 2004.		10-Q		10	.52	000-22430	12/30/2004
	10	.24	Company’s 2001 Non-Officer Equity Plan.		10-Q		10	.53	000-22430	12/30/2004
	10	.25*	Employment Agreement between the Company and Warren Kocmond, Jr., (corrected as of May 16, 2005).		10-K		10	.52	000-22430	6/29/2005
	10	.26*	Change-in-Control Agreement between the Company and Robert J. Nikl dated November 3, 2004.		10-K		10	.53	000-22430	6/29/2005
	10	.27*	Change-in-Control Agreement between the Company and Anthony C Bonora dated November 3, 2004.		10-K		10	.54	000-22430	6/29/2005
	10	.28‡	Amendment No. 2 to Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, effective February 17, 2005.		10-K		10	.55	000-22430	6/29/2005
	10	.29	Amendment No. 3 to Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, effective June 10, 2005.		10-K		10	.56	000-22430	6/29/2005
	10	.30*	Summary of Executive Bonus Plan (revised 2006)								X
	10	.31	Waiver and Amendment Number One to Amended and Restated Loan and Security Agreement between the Company and Comerica Bank, dated June 27, 2005.		10-K		10	.58	000-22430	6/29/2005
	10	.32*	2003 Equity Incentive Plan as amended and approved by the Registrant’s shareholders through August 23, 2005.		8-K		99	.1	000-22430	8/29/2005
	10	.33*	Employment Agreement dated as of August 29, 2005, between the Company and Alan S. Lowe		10-Q		10	.60	000-22430	11/9/2005
	10	.34	Amendment Number Two to Amended and Restated Loan and Security Agreement between the Company and Comerica Bank, dated November 21, 2005.		10-Q		10	.61	000-22430	2/6/2006

121

Exhibit				Incorporated by Reference							Filed
Number			Exhibit Description	Form		Ex. No.			File No.	Filing Date	Herewith
	10	.35	Industrial Space Lease (Single Tenant Net) between the Company and JER Bayside, LLC dated November 29, 2005.		10-Q		10	.62	000-22430	2/6/2006
	10	.36*	First Amendment dated December 16, 2005, to Change-in-Control Agreement dated October 20, 2003, between the Company and Stephen S. Schwartz.		8-K		99	.1	000-22430	12/16/2005
	10	.37‡	Amendment No. 4 to Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, effective August 1, 2005.								X
	10	.38‡	Amendment No. 5 to Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, effective March 20, 2006.								X
	10	.39*	Separation Agreement and Release of All Claims between the Company and Warren C. Kocmond, dated May 31, 2006.								X
	10	.40*	Change-in-Control Agreement between the Company and Steve Debenham, dated May 22, 2006.								X
	10	.41*	Change-in-Control Agreement between the Company and Alan S. Lowe, dated May 22, 2006								X
	10	.42	Credit Agreement among Asyst Technologies, Inc., Asyst Japan, Inc., Bank of America, N.A., Banc of America Securities LLC, Keybank National Association, and Comerica Bank dated as of June 22, 2006.								X
	21	.1	Subsidiaries of Asyst Technologies, Inc.								X
	31	.1	Certification of the Chief Executive Officer of the Registrant required by SEC Rule 13a-14(a) (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002).								X
	31	.2	Certification of the Chief Financial Officer of the Registrant required by SEC Rule 13a-14(a) (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002).								X
	32	.1	Combined Certification of the Chief Executive Officer and the Chief Financial Officer of the Registrant required by SEC Rule 13a-14(b) (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002).								X

*	Indicates a management contract or compensatory plan or arrangement.
†	Indicates English translation of original document.
‡	Indicates confidential treatment has been requested for portions of this document

122

SCHEDULE II

ASYST TECHNOLOGIES, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

	Balance							Foreign
	Beginning		Charged to					Currency			Balance
	of Year		Expenses		Deductions			Translation			End of Year
	(In thousands)
Allowance for doubtful accounts
Year Ended March 31,
2004	$	4,880	$	222	$	(494	)	$	—		$	4,608
2005	$	4,608	$	4,862	$	(2,490	)	$	—		$	6,980
2006	$	6,980	$	6,791	$	(1,249	)	$	(654	)	$	11,868

123

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ASYST TECHNOLOGIES, INC.

By:  /s/  RICHARD H. JANNEY

Richard H. Janney

Interim Chief Financial Officer

Date: October 13, 2006

Pursuant to the requirements of the Securities Exchange of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/  STEPHEN S. SCHWARTZ, PH. D. Stephen S. Schwartz, Ph. D.	Chairman of the Board, Chief Executive Officer and Director (Principal Executive Officer)	October 13, 2006
/s/  RICHARD H. JANNEY Richard H. Janney	Interim Chief Financial Officer (and Interim Principal Accounting Officer)	October 13, 2006
/s/  STANLEY GRUBEL Stanley Grubel	Director	October 13, 2006
/s/  TSUYOSHI KAWANISHI Tsuyoshi Kawanishi	Director	October 13, 2006
/s/  ROBERT A. MCNAMARA Robert A. McNamara	Director	October 13, 2006
/s/  ANTHONY E. SANTELLI Anthony E. Santelli	Director	October 13, 2006
/s/  WILLIAM SIMON William Simon	Director	October 13, 2006
/s/  WALTER W. WILSON Walter W. Wilson	Director	October 13, 2006

124

EXHIBIT INDEX

Exhibit				Incorporated by Reference							Filed
Number			Exhibit Description	Form		Ex. No.			File No.	Filing Date	Herewith
	2	.1‡	Share Purchase Agreement dated as of June 22, 2006, between Shinko Electric Co., Ltd., Asyst Technologies, Inc. and Asyst Japan Inc. The schedules to the Share Purchase Agreement are omitted but will be furnished to the Securities and Exchange Commission supplementally upon request.		8-K		2	.1	000-22430	7/20/2006
	3	.1	Amended and Restated Articles of Incorporation of the Company.		S-1		3	.1	333-66184	7/19/1993
	3	.2	Bylaws of the Company.		S-1		3	.2	333-66184	7/19/1993
	3	.3	Certificate of Amendment of the Amended and Restated Articles of Incorporation, filed September 24, 1999.		10-Q		3	.2	000-22430	10/21/1999
	3	.4	Certificate of Amendment of the Amended and Restated Articles of DEF Incorporation, filed October 5, 2000.		14A		App	.	000-22430	7/31/2000
	4	.1	Rights Agreement among the Company and Bank of Boston, N.A., as Rights Agent, dated June 25, 1998.		8-K		99	.2	000-22430	6/29/1998
	4	.2	Indenture dated as of July 3, 2001 between the Company, State Street Bank and Trust Company of California, N.A., as trustee, including therein the forms of the notes.		10-Q		4	.3	000-22430	8/14/2001
	4	.3	Registration Rights Agreement dated as of July 3, 2001 between the Company and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, and ABN Amro Rothschild LLC.		10-Q		4	.4	000-22430	8/14/2001
	4	.4	Amendment to Rights Agreement among the Company and Bank of Boston, N.A. as Rights Agent, dated November 30, 2001.		10-K		4	.5	000-22430	6/28/2002
	10	.1*	Form of Indemnity Agreement entered into between the Company and certain directors.		S-1		10	.1	333-66184	7/19/1993
	10	.2*	Company’s 1993 Stock Option Plan and related form of stock option agreement.		S-1		10	.2	333-88246	2/13/1995
	10	.3*	Company’s 1993 Employee Stock Purchase Plan and related offering document.		S-1		10	.3	333-66184	7/19/1993
	10	.4*	Company’s 1993 Non-Employee Directors’ Stock Option Plan and related offering document.		S-1		10	.4	333-66184	7/19/1993
	10	.5	Hewlett-Packard SMIF License Agreement dated June 6, 1984.		S-1		10	.5	333-66184	7/19/1993
	10	.6*	Employment Agreement between the Company and Stephen S. Schwartz, Ph.D., dated January 11, 2001.		10-K		10	.27	000-22430	6/19/2001
	10	.7†	Agreement on Bank Transactions between Asyst Japan, Inc., or AJI, and Tokyo Mitsubishi Bank dated March 13, 2001.		10-Q		10	.28	000-22430	8/14/2001
	10	.8†	Share Purchase Agreement between Shinko Electric Co., Ltd. and Asyst Japan Inc., dated as of May 24, 2002.		10-Q		10	.38	000-22430	11/12/2002

Exhibit				Incorporated by Reference							Filed
Number			Exhibit Description	Form		Ex. No.			File No.	Filing Date	Herewith
	10	.9†	Shareholders Agreement between Shinko Electric Co., Ltd. and Asyst Japan Inc., dated as of May 24, 2002.		10-Q		10	.39	000-22430	11/12/2002
	10	.10‡	Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, dated as of September 5, 2002.		10-Q		10	.40	000-22430	11/12/2002
	10	.11†	Amendment No. 1 to Shareholders Agreement between Shinko Electric Co., Ltd. and Asyst Japan Inc., dated as of October 16, 2002.		10-Q		10	.43	000-22430	2/11/2003
	10	.12‡	Patent Assignment and Cross-License and Trademark License Agreement among the Company, Entegris Cayman Ltd. and Entegris, Inc., dated as of February 11, 2003.		10-K/A		10	.44	000-22430	10/29/2003
	10	.13*	Change-In-Control Agreement between the Company and Stephen S Schwartz dated as of October 20, 2003.		10-Q		10	.47	000-22430	11/12/2003
	10	.14‡	Amendment and Modification Agreement to Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, effective as of September 22, 2003.		10-Q		10	.50	000-22430	2/10/2004
	10	.15*	Form of Indemnity Agreement entered into between the Company and certain executive officers.		10-K		10	.33	000-22430	6/10/2004
	10	.16*	Form of Agreement to Arbitrate Disputes and Claims entered into between the Company and its executive officers.		10-K		10	.37	000-22430	6/10/2004
	10	.17*	Company’s Compensation Program for Non-employee Directors.								X
	10	.18*	Company’s Executive Deferred Compensation Plan.		10-K		10	.39	000-22430	6/10/2004
	10	.19*	Employment Agreement between the Company and Stephen Debenham dated August 21, 2003.		10-K		10	.40	000-22430	6/10/2004
	10	.20	Amended and Restated Loan and Security Agreement between the Company and Comerica Bank, dated May 15, 2004.		10-Q		10	.47	000-22430	8/5/2004
	10	.21*	Forms of Stock Option Award Notice and Stock Option Award Agreement entered into between the Company and certain employees, directors, and consultants (2003 Equity Incentive Plan).		10-Q		10	.50	000-22430	12/30/2004
	10	.22*	Forms of Restricted Stock Award Agreement for restricted stock awarded to directors, Restricted Stock Award Agreement for restricted stock units awarded to directors, Restricted Stock Award Agreement for restricted stock awarded to employees, and Restricted Stock Award Agreement for restricted stock units awarded to employees.								X
	10	.23*	Certificate of Amendment to Option Grants dated August 18, 2004.		10-Q		10	.52	000-22430	12/30/2004

Exhibit				Incorporated by Reference							Filed
Number			Exhibit Description	Form		Ex. No.			File No.	Filing Date	Herewith
	10	.24	Company’s 2001 Non-Officer Equity Plan.		10-Q		10	.53	000-22430	12/30/2004
	10	.25*	Employment Agreement between the Company and Warren Kocmond, Jr., (corrected as of May 16, 2005).		10-K		10	.52	000-22430	6/29/2005
	10	.26*	Change-in-Control Agreement between the Company and Robert J Nikl dated November 3, 2004.		10-K		10	.53	000-22430	6/29/2005
	10	.27*	Change-in-Control Agreement between the Company and Anthony C Bonora dated November 3, 2004.		10-K		10	.54	000-22430	6/29/2005
	10	.28‡	Amendment No. 2 to Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, effective February 17, 2005.		10-K		10	.55	000-22430	6/29/2005
	10	.29	Amendment No. 3 to Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, effective June 10, 2005.		10-K		10	.56	000-22430	6/29/2005
	10	.30*	Summary of Executive Bonus Plan (revised 2006).								X
	10	.31	Waiver and Amendment Number One to Amended and Restated Loan and Security Agreement between the Company and Comerica Bank, dated June 27, 2005.		10-K		10	.58	000-22430	6/29/2005
	10	.32*	2003 Equity Incentive Plan as amended and approved by the Registrant’s shareholders through August 23, 2005.		8-K		99	.1	000-22430	8/29/2005
	10	.33*	Employment Agreement dated as of August 29, 2005, between the Company and Alan S. Lowe.		10-Q		10	.60	000-22430	11/9/2005
	10	.34	Amendment Number Two to Amended and Restated Loan and Security Agreement between the Company and Comerica Bank, dated November 21, 2005.		10-Q		10	.61	000-22430	2/6/2006
	10	.35	Industrial Space Lease (Single Tenant Net) between the Company and JER Bayside, LLC dated November 29, 2005.		10-Q		10	.62	000-22430	2/6/2006
	10	.36*	First Amendment dated December 16, 2005, to Change-in-Control Agreement dated October 20, 2003, between the Company and Stephen S. Schwartz.		8-K		99	.1	000-22430	12/16/2005
	10	.37‡	Amendment No. 4 to Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, effective August 1, 2005.								X
	10	.38‡	Amendment No. 5 to Manufacturing Services and Supply Agreement among the Company and Solectron Corporation and its subsidiaries and affiliates, effective March 20, 2006.								X
	10	.39*	Separation Agreement and Release of All Claims between the Company and Warren C. Kocmond, dated May 31, 2006.								X

Exhibit				Incorporated by Reference				Filed
Number			Exhibit Description	Form	Ex. No.	File No.	Filing Date	Herewith
	10	.40*	Change-in-Control Agreement between the Company and Steve Debenham, dated May 22, 2006.					X
	10	.41*	Change-in-Control Agreement between the Company and Alan S. Lowe, dated May 22, 2006.					X
	10	.42	Credit Agreement among Asyst Technologies, Inc., Asyst Japan, Inc., Bank of America, N.A., Banc of America Securities LLC, Keybank National Association, and Comerica Bank dated as of June 22, 2006.					X
	21	.1	Subsidiaries of Asyst Technologies, Inc.					X
	31	.1	Certification of the Chief Executive Officer of the Registrant required by SEC Rule 13a-14(a) (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002).					X
	31	.2	Certification of the Chief Financial Officer of the Registrant required by SEC Rule 13a-14(a) (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002).					X
	32	.1	Combined Certification of the Chief Executive Officer and the Chief Financial Officer of the Registrant required by SEC Rule 13a-14(b) (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002).					X

*	Indicates a management contract or compensatory plan or arrangement.
†	Indicates English translation of original document.
‡	Indicates confidential treatment has been requested for portions of this document

EX-10.17

Exhibit 10.17

Asyst Technologies, Inc.
Compensation Program for Non-employee Directors

Program Element	Description
Sign-on stock award to new directors for continuing service	Stock award in conjunction with continued service
	—   $120,000 value at award, vesting over 3 years from the date of award
	—   value determined by the trading price of the Company’s Common Stock at the date of award
	—   shares subject to such award may not be sold until after the recipient has ceased to be a board member
Board member — annual cash retainer	$35,000
Board member — per meeting fees	$2,000 in person, or $1,000 if by telephone (when such meeting is as the Board)
	No incremental meeting fees for the Board chair (if a non-executive chair)
Committee member — annual cash retainer
— Audit	— $5,000
— Compensation	— $5,000
— Governance and Nominating	— $5,000
Committee member — per meeting fees	$1,000 in person, or $500 if by telephone (when such meeting is as a committee) No incremental meeting fees for the committee chair
— Audit
— Compensation
— Governance and Nominating
— Specially appointed committees
Committee chair — annual cash retainer
— Audit	— Audit: $12,500
— Compensation	— Compensation: $7,500
— Governance and Nominating	— Governance: $7,500
Additional committee fees	$12,500 annual cash retainer for designated Audit Committee Financial Expert (unless if also the committee chair)

Program Element	Description
Annual stock award to new and existing directors for continuing service	Stock award in conjunction with continued service
	—   May 2006 award of 13,000 shares per director, vesting over 36 months from the date of award — distribution of the shares subject to the award is subject to a mandatory three-year deferral (until April 3, 2009), and further subject to a mandatory restriction on sale or disposition of the shares over the same period.
Subsidiary directors
— Non-management director — annual cash retainer	— $5,000
— Non-management director — meeting fees	— No additional compensation
(board, committee or project)
Fees for special projects/meetings
— U.S.	None (unless specifically approved) $1,000 per day or $5,000 per assignment out of the country (as determined by the Board)
— Outside U.S.

All annual retainer payments and annual stock awards to be pro-rated, based on term of relevant service.

Prohibitions on sale of shares subject to permitted sale of incremental shares to cover taxes or fees assessed on imputed or other income.

Vesting of awards may be accelerated upon termination of Board service due to death or disability.

EX-10.22

Exhibit 10.22
Non-Employee Director RSA Award Agreement (4-2006)

ASYST TECHNOLOGIES, INC.

2003 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

     1. Restricted Stock Award. As of [insert date] (the “Date of Award”), Asyst Technologies, Inc., a California corporation (the “Company”), has granted to [insert name] (the “Grantee”) a Restricted Stock Award (the “Restricted Stock Award”) for ___ shares of Common Stock, which is granted by the Company subject to the terms and provisions of this Restricted Stock Award agreement (the “Stock Award Agreement”) and the Company’s 2003 Equity Incentive Plan, as amended from time to time (the “Plan”), which are incorporated herein by reference.

          Unless to the extent otherwise defined herein, the terms in this Stock Award Agreement shall be given the same defined meanings as defined in the Plan.

     2. Vesting Schedule. Subject to the terms of this Stock Award Agreement and the Plan, and provided that you remain in continuous service as a member of the Company’s Board of Directors (the “Board”) from the Date of Award, to the vesting date listed below; the shares subject to the Restricted Stock Award shall vest as provided below. No shares will be transferable prior to the applicable vesting date.

Number of Shares Vesting Date

     a. Holding and Other Restrictions on Delivery

     The Grantee may not sell, transfer or otherwise dispose of shares subject to the Restricted Stock Award until the third anniversary of the grant date.

     b. Acceleration in the event of Death, Disability or Termination of Service

         Regardless of any hold or other restriction on delivery of shares, shares that have vested under the Stock Award will be automatically be available for sale, transfer or other disposition by the Grantee as of the date of the first to occur of the following specific events (provided that such date is after the original vesting date for the shares): (i) a change in control of

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the Company (as defined under Code Section 409A), (ii) termination of Grantee’s service with the Company (for any reason), (iii) determination of Grantee’s permanent disability, or (iv) the date of Grantee’s death.

     3. Taxes. Regardless of any action the Company or Grantee’s actual employer takes with respect to any or all income tax (including federal, state and local taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax Related Items”), Grantee acknowledges that the ultimate liability for all Tax Related Items legally due by Grantee is and remains Grantee’s responsibility and that the Company and/or the Grantee’s actual employer (i) make no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect of the Restricted Stock Award, including the grant of the Restricted Stock Award, the vesting of the Restricted Stock Award, or the subsequent sale of shares acquired at vesting, pursuant to such Restricted Stock Award and the receipt of any dividends, or the sufficiency of any withholdings or other payments made for or by the Grantee to satisfy the Tax-Related Items; and (ii) do not commit to structure the terms of the grant or any aspect of the Restricted Stock Award to reduce or eliminate the Grantee’s liability for Tax Related Items.

          Prior to the issuance of shares of Common Stock upon vesting of Restricted Stock Award, Grantee shall pay, or make adequate arrangements satisfactory to the Company or to the Grantee’s actual employer (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or the Grantee’s actual employer. In this regard, Grantee authorizes the Company or the Grantee’s actual employer to (in their sole discretion) withhold all applicable Tax Related Items legally payable by Grantee (i) from Grantee’s wages or other cash compensation payable to Grantee by the Company or the Grantee’s actual employer and/or (ii) to withhold in shares, provided that the Company and the Grantee’s actual employer shall withhold only the number of shares necessary to satisfy the minimum withholding amount. Alternatively, or in addition, if permissible under local law Grantee (i) may tender payment in cash or by delivering to the Company owned and unencumbered shares of Asyst Technologies, Inc. and/or (ii) authorize the Company or the Grantee’s actual employer to, sell or arrange for the sale of the number of shares as necessary to satisfy the withholding or payment on account obligation that is due at the vesting of the Restricted Stock Award. Grantee shall pay to the Company or to the Grantee’s actual employer any amount of Tax Related Items that the Company or the Grantee’s actual employer may be required to withhold as a result of Grantee’s receipt of the Restricted Stock Award, the vesting of the Restricted Stock Award, or the subsequent sale of shares acquired pursuant to such Restricted Stock Award and the receipt of any dividends that cannot be satisfied by the means previously described. The Company may refuse to deliver shares to Grantee if Grantee fails to comply with Grantee’s obligation in connection with the Tax Related Items as described herein.

     4. Restrictions on Issuance. No shares will be issued in connection with the Restricted Stock Award if the issuance of such shares would constitute a violation of any applicable laws.

     5. Termination of Continuous Service. In the event that the Grantee ceases to remain in Continuous Service with the Company for any reason, including death or disability, resignation or failure of nomination or election for subsequent term, any unvested portion of the Restricted Stock Award shall automatically terminate and be deemed forfeited.

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     6. Transferability of Award. The Restricted Stock Award may not be transferred, pledged, sold, assigned, alienated or otherwise encumbered by the Grantee, in any manner other than by will or by the laws of descent and distribution. Any such purported transfer, pledge, sale, assignment, alienation or encumbrance will be void and unenforceable against the Company. The terms of the Restricted Stock Award shall be binding upon the executors, administrators, heirs and successors of the Grantee.

     7. Refusal to Transfer. The Company shall not be required (i) to transfer on its books any shares that have been sold or otherwise transferred in violation of any of the provisions of this Restricted Stock Award Agreement or (ii) to treat as owner of such shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred.

     8. Tax Consultation. The Grantee understands that he or she may suffer adverse tax consequences as a result of the Grantee’s receipt or disposition of the shares subject to the Restricted Stock Award (or the vesting of Grantee’s right to receive or dispose of the shares subject to the Restricted Stock Award). The Grantee represents that he or she has had an opportunity to consult with any tax consultants the Grantee deems advisable in connection with receipt or disposition of the shares and that the Grantee is not relying on the Company or its counsel for any tax advice.

     9. Entire Agreement: Governing Law. The Plan and this Stock Award Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the Grantee. Nothing in the Plan and this Stock Award Agreement (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The Plan and this Stock Award Agreement are to be construed in accordance with and governed by the laws of the State of California without giving effect to any conflict of law rule. Should any provision of the Plan or this Stock Award Agreement be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.

     10. Headings. The captions used in this Stock Award Agreement are inserted for convenience and shall not be deemed a part of the Stock Award for construction or interpretation.

     11. Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail (if the parties are within the United States) or upon deposit for delivery by an internationally recognized express mail courier service (for international delivery of notice), with postage and fees prepaid, addressed to the other party at its address as shown below or to such other address as such party may designate in writing from time to time to the other party.

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     12. Rights as Shareholder. Except with regard to the disposition of the shares subject to the Restricted Stock Award, Grantee shall generally have all the rights of a shareholder with regard to the shares subject to the Restricted Stock Award from the Date of Award, including without limitation, the right to receive dividends with respect to such shares and the right to vote such shares, but subject to those restrictions in this Stock Award Agreement or in the Plan.

     13. Mandatory Arbitration to Resolve Disputes. Any differences, disputes or controversies arising from the Restricted Stock Award or this Stock Award Agreement, and rights or obligations thereunder or hereunder, shall be exclusively submitted to binding arbitration before an independent and qualified arbitrator in accordance with the American Arbitration Association and its rules then in effect, without reference to conflict of laws principles. Arbitration shall be the exclusive forum for any dispute, claim or cause arising hereunder, and the decision and award by the arbitrator shall be final, binding upon and non-appealable by the parties and may be entered in any state court of California having jurisdiction. The arbitrator shall be without authority or jurisdiction to award either party its attorneys’ fees or costs incurred in the matter. In addition, the arbitrator shall be without authority or jurisdiction to award either party, 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; provided, however, that provisional or injunctive remedies and relief shall be available as appropriate to each party.

     14. Waiver of Right to Jury Trial. Each party, to the fullest extent permitted by law, waives any right or expectation against the other to trial or adjudication by a jury of any claim, cause or action arising hereunder, or the rights, duties or liabilities created hereby.

     15. Nature of the Restricted Stock Award. In accepting the Restricted Stock Award, the Grantee acknowledges and agrees that:

          (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Stock Award Agreement;

          (b) the grant of the Restricted Stock Award is voluntary and occasional, and does not create any contractual or other right to receive future grants of stock, or benefits in lieu of awards, even if stock awards have been granted repeatedly in the past;

          (c) all decisions with respect to future grants, if any, will be at the sole discretion of the Company;

          (d) the Grantee’s participation in the Plan shall not create a right to further employment with Grantee’s employer and shall not interfere with the ability of the Company to terminate the Grantee’s employment relationship at any time, with or without cause;

          (e) the Grantee is voluntarily participating in the Plan;

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          (f) the Restricted Stock Award is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, and which is outside the scope of the Grantee’s employment contract, if any;

          (g) the Restricted Stock Award is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

          (h) in the event that the Grantee is not an employee of the Company, the grant of the Restricted Stock Award will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the grant of the Restricted Stock Award will not be interpreted to form an employment contract with any subsidiary or Affiliate of the Company;

          (i) the future value of the shares is unknown and cannot be predicted with certainty;

          (j) the value of the shares obtained pursuant to the Restricted Stock Award may increase or decrease in value;

          (k) in consideration of the grant of the Restricted Stock Award, the Grantee does not acquire any claim or entitlement to compensation or damages that otherwise could arise from termination of the Restricted Stock Award or diminution in value of the Restricted Stock Award, or shares acquired pursuant to the Restricted Stock Award, upon termination of the Grantee’s employment by the Company (for any reason whatsoever and whether or not in breach of local labor laws), and the Grantee hereby irrevocably waives and releases the Company from any such claim or entitlement that may arise; if, notwithstanding the foregoing, any such claim or entitlement is found by a court of competent jurisdiction to have arisen;

          (l) by signing this Stock Award Agreement, the Grantee shall be deemed irrevocably to have waived his or her right to pursue or seek remedy for any such claim or entitlement;

          (m) notwithstanding any terms or conditions of the Plan to the contrary, in the event of involuntary termination of the Grantee’s employment (whether or not in breach of local labor laws), the Grantee’s right to receive shares under the Plan, or vesting of such right, if any, will terminate automatically as of the Termination Date, and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); and

          (n) the Committee shall have the exclusive discretion to determine when the Grantee is no longer actively employed for purposes of this Restricted Stock Award.

     16. Data Privacy. The Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Company and its subsidiaries and Affiliates

5

for the exclusive purpose of implementing, administering and managing the Grantee’s participation in the Plan.

          The Grantee understands that the Company may hold certain personal information about him or her, including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of the Restricted Stock Award or any other entitlement to shares, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). The Grantee understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Grantee’s country or elsewhere, and that the recipients ‘country may have different data privacy laws and protections than the Grantee’s country. The Grantee understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Grantee may elect to deposit any shares acquired upon vesting of the Restricted Stock Award. The Grantee understands that Data will be held as long as is reasonably necessary to implement, administer and manage the Grantee’s participation in the Plan. The Grantee understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Grantee’s local human resources representative. The Grantee understands, however, that refusing or withdrawing his or her consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, the Grantee understands that he or she may contact his or her local human resources representative.

     17. Language. If the Grantee has received this or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control.

     18. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Award and participation in the Plan, or future Stock Awards that may be granted under the Plan, by electronic means or to request the Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

****************************

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     The Grantee acknowledges receipt of a copy of the Plan and the Stock Award Agreement, and represents that he or she has had an opportunity to review these documents and to be familiar with the terms and provisions thereof, and hereby accepts the Restricted Stock Award subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed the Plan and the Stock Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Stock Award Agreement. The Grantee agrees to notify the Company upon any change in the residence address indicated in this Stock Award Agreement.

Submitted by:	Accepted by:
GRANTEE:	ASYST TECHNOLOGIES, INC.
	By:
	Title: Vice President, General Counsel & Secretary
(Signature)
Address:	Address:
	46897 Bayside Parkway
	Fremont, CA 94538

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Non-Employee Director RSU Award (2003 Plan)

ASYST TECHNOLOGIES, INC.

2003 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

     1. Restricted Stock Award. As of [insert date] (the “Date of Award”), Asyst Technologies, Inc., a California corporation (the “Company”), has granted to [insert name] (the “Grantee”) a restricted stock unit award (the “RSU Award”), which is an unfunded, unsecured promise by the Company to deliver [insert shares] shares of Common Stock subject to the terms and provisions of this Restricted Stock Award agreement (the “RSU Agreement”) and the Company’s 2003 Equity Incentive Plan, as amended from time to time (the “Plan”), which are incorporated herein by reference.

     Unless otherwise defined herein, the terms in this RSU Agreement shall be given the same defined meanings as defined in the Plan.

     2. Vesting Schedule. Subject to the terms of this RSU Agreement and the Plan, and provided that you remain in continuous service as a member of the Company’s Board of Directors (the “Board”) from the Date of Award, to the vesting date listed below; the shares subject to the RSU Award shall vest as provided below and be converted into an equivalent number of shares of Common Stock on the vesting date. In addition, at the sole discretion of the Company, the RSU Award may be settled by a cash payment on the date the Grantee first has a right to receive the shares (the vesting date or the distribution date, as applicable) rather than by a delivery of shares. Such cash payment, if any, will be equal to the Fair Market Value of the shares on the vesting date or the distribution date, as applicable. No shares will be converted or issued and no cash payment, if any, shall be made prior to the applicable vesting date.

Number of RSUs Vesting Date

     a. Holding and Other Restrictions on Delivery

     No vested shares subject to the RSU Award shall be issued or delivered to the Grantee until the third anniversary of the grant date (the “Delivery Date”). On the Delivery Date 100% of the vested shares shall be issued and delivered to the Grantee unless such shares were previously forfeited pursuant to the terms of the RSU Agreement or the terms of the Plan or were otherwise used to meet the Grantee’s tax obligation described in Section 3 below.

     b. Acceleration in the event of Death, Disability or Termination of Service

8

     Regardless of any hold or other restriction on delivery of shares the Delivery Date for shares that have vested under the RSU Award will be automatically accelerated and such shares will be delivered to the Grantee as of the date of the first to occur of the following specific events (provided that such date is after the original vesting date for the shares): (i) a change in control of the Company (as defined under Code Section 409A), (ii) termination of Grantee’s service with the Company (for any reason), (iii) determination of Grantee’s permanent disability, or (iv) the date of Grantee’s death.

     3. Taxes. Regardless of any action the Company or Grantee’s actual employer takes with respect to any or all income tax (including federal, state and local taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax Related Items”), Grantee acknowledges that the ultimate liability for all Tax Related Items legally due by Grantee is and remains Grantee’s responsibility and that the Company and/or the Grantee’s actual employer (i) make no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect of the RSU Award, including the grant of the RSU Award, the vesting of the RSU Award, the conversion of the RSU Award into shares or the receipt of an equivalent cash payment, the subsequent sale of any shares acquired at vesting, the receipt of any dividends, or the sufficiency of any withholdings or other payments made for or by the Grantee to satisfy the Tax-Related Items; and (ii) do not commit to structure the terms of the grant or any aspect of the RSU Award to reduce or eliminate the Grantee’s liability for Tax Related Items.

          No shares will be delivered to the Grantee or equivalent cash payment received until the Grantee has paid, or made adequate arrangements satisfactory to the Company or to the Grantee’s actual employer (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or the Grantee’s actual employer. In this regard, Grantee authorizes the Company or the Grantee’s actual employer to (in their sole discretion) withhold all applicable Tax Related Items legally payable by Grantee (i) from Grantee’s wages or other cash compensation payable to Grantee by the Company or the Grantee’s actual employer or from any equivalent cash payment attributable to the RSU Award and/or (ii) withhold in shares, provided that the Company and the Grantee’s actual employer shall withhold only the number of shares necessary to satisfy the minimum withholding amount due at the time such shares are withheld. Alternatively, or in addition, if permissible under local law the Grantee (i) may tender payment in cash or by delivering to the Company owned and unencumbered shares of Asyst Technologies, Inc. and/or (ii) authorize the Company or the Grantee’s actual employer to, sell or arrange for the sale of the number of shares as necessary to satisfy the withholding or payment on account obligation that is due. With respect to any shares timely and appropriately deferred by the Grantee, the Company or the Grantee’s actual employer shall limit any sale of shares at vesting to the minimum number of shares permitted to avoid a prohibited acceleration under Code Section 409A and the regulations thereunder, as amended from time to time. Grantee shall pay to the Company or to the Grantee’s actual employer any amount of Tax Related Items that the Company or the Grantee’s actual employer may be required to withhold as a result of Grantee’s receipt of the RSU Award, the vesting of the RSU Award, the receipt of an equivalent cash payment, or the conversion of the vested RSU Award into shares that cannot be satisfied by the means previously described. The Company may refuse to deliver shares to Grantee if Grantee fails to comply with Grantee’s obligation in connection with the Tax Related Items as described herein.

9

     4. Restrictions on Issuance. No shares will be issued in connection with the RSU Award if the issuance of such shares would constitute a violation of any applicable laws.

     5. Delivery of Shares. Until shares subject to the RSU Award are issued and delivered, the Grantee will have no rights as a shareholder including the right to receive dividends and the right to vote the shares. In addition, at the sole discretion of the Company, the RSU Award may be settled by a cash payment on the Delivery Date rather than by a delivery of shares. Such cash payment, if any, will be equal to the Fair Market Value of the shares on the Delivery Date.

     6. Termination of Continuous Service. In the event that the Grantee ceases to be a member of the Board for any reason, including death, disability, resignation or failure of nomination or election for subsequent term, any unvested portion of the RSU award shall automatically terminate and be deemed forfeited.

     7. Transferability of Award. The RSU Award may not be transferred, pledged, sold, assigned, alienated or otherwise encumbered by Grantee in any manner other than by will or by the laws of descent and distribution. Any such purported transfer, pledge, sale, assignment, alienation or encumbrance will be void and unenforceable against the Company. The terms of the RSU Award shall be binding upon the executors, administrators, heirs and successors of the Grantee.

     8. Refusal to Transfer. The Company shall not be required (i) to transfer on its books any shares that have been sold or otherwise transferred in violation of any of the provisions of this RSU Agreement or (ii) to treat as owner of such shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred.

     9. Tax Consultation. The Grantee understands that he or she may suffer adverse tax consequences as a result of the Grantee’s receipt or disposition of the shares subject to the RSU Award (or the vesting of Grantee’s right to receive or dispose of the shares subject to the RSU Award). The Grantee represents that he or she has had the opportunity to consult with any tax consultants the Grantee deems advisable in connection with receipt or disposition of the shares and that the Grantee is not relying on the Company or its counsel for any tax advice.

     10. Entire Agreement: Governing Law. The Plan and this RSU Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the Grantee. Nothing in the Plan and this RSU Agreement (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The Plan and this RSU Agreement are to be construed in accordance with and governed by the laws of the State of California without giving effect to any conflict of law rule. Should any provision of the Plan or this RSU Agreement be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.

10

     11. Headings. The captions used in this RSU Agreement are inserted for convenience and shall not be deemed a part of this RSU Agreement for construction or interpretation.

     12. Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail (if the parties are within the United States) or upon deposit for delivery by an internationally recognized express mail courier service (for international delivery of notice), with postage and fees prepaid, addressed to the other party at its address as shown below or to such other address as such party may designate in writing from time to time to the other party.

     13. Rights as Shareholder. Until the Grantee has satisfied all requirements for vesting of the RSU Award and such vested shares have been issued and delivered pursuant to the terms of the Plan and this RSU Agreement, the Grantee shall not be deemed to be a shareholder or to have any of the rights of a shareholder with respect to any such shares of stock subject to the RSU Award.

     14. Deferral of Compensation. Payments made pursuant to this Plan and RSU Agreement are intended to comply with or qualify for an exemption from Section 409A of the Internal Revenue Code (“Section 409A”). The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan and/or this RSU Agreement to ensure that all shares subject to the RSU Award are made in a manner that qualifies for exemption from or complies with Section 409A; provided however, that the Company makes no representations that the shares will be exempt from Section 409A and makes no undertaking to preclude Section 409A from applying to this RSU Award.

     15. Nature of the RSU Award. In accepting the RSU Award, the Grantee acknowledges and agrees that:

          (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this RSU Agreement;

          (b) the grant of the RSU Award is voluntary and occasional, and does not create any contractual or other right to receive future grants of awards, or benefits in lieu of awards, even if awards have been granted repeatedly in the past;

          (c) all decisions with respect to future grants, if any, will be at the sole discretion of the Company;

          (d) the Grantee’s participation in the Plan shall not create a right to further employment with Grantee’s employer and shall not interfere with the ability of the Company to terminate the Grantee’s employment relationship at any time, with or without cause;

          (e) the Grantee is voluntarily participating in the Plan;

11

          (f) the RSU Award is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, and which is outside the scope of the Grantee’s employment contract, if any;

          (g) the RSU Award is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

          (h) in the event that the Grantee is not an employee of the Company, the grant of the RSU Award will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the grant of the RSU Award will not be interpreted to form an employment contract with any subsidiary or Affiliate of the Company;

          (i) the future value of the shares is unknown and cannot be predicted with certainty;

          (j) the value of the shares obtained pursuant to the RSU Award may increase or decrease in value;

          (k) in consideration of the grant of the RSU Award, the Grantee does not acquire any claim or entitlement to compensation or damages that otherwise could arise from termination of the RSU Award or diminution in value of the RSU Award, or shares acquired pursuant to the RSU Award, upon termination of the Grantee’s employment by the Company (for any reason whatsoever and whether or not in breach of local labor laws), and the Grantee hereby irrevocably waives and releases the Company from any such claim or entitlement that may arise; if, notwithstanding the foregoing, any such claim or entitlement is found by a court of competent jurisdiction to have arisen;

          (l) by signing this RSU Agreement, the Grantee shall be deemed irrevocably to have waived his or her right to pursue or seek remedy for any such claim or entitlement;

          (m) notwithstanding any terms or conditions of the Plan to the contrary, in the event of involuntary termination of the Grantee’s employment (whether or not in breach of local labor laws), the Grantee’s right to receive shares under the Plan, or vesting of such right, if any, will terminate automatically as of the Termination Date, and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); and

          (n) the Committee shall have the exclusive discretion to determine when the Grantee is no longer actively employed for purposes of this RSU Award.

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     16. Data Privacy. The Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Company and its subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing the Grantee’s participation in the Plan.

          The Grantee understands that the Company may hold certain personal information about him or her, including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of the RSU or any other entitlement to shares, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). The Grantee understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Grantee’s country or elsewhere, and that the recipients ‘country may have different data privacy laws and protections than the Grantee’s country. The Grantee understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Grantee may elect to deposit any shares acquired upon vesting of the RSU. The Grantee understands that Data will be held as long as is reasonably necessary to implement, administer and manage the Grantee’s participation in the Plan. The Grantee understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Grantee’s local human resources representative. The Grantee understands, however, that refusing or withdrawing his or her consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, the Grantee understands that he or she may contact his or her local human resources representative.

     17. Language. If the Grantee has received this or any other document related to the Plan or the RSU Award translated into a language other than English and if the translated version is different than the English version, the English version will control.

     18. Mandatory Arbitration to Resolve Disputes. Any differences, disputes or controversies arising from the RSU Award or this RSU Agreement, and rights or obligations thereunder or hereunder, shall be exclusively submitted to binding arbitration before an independent and qualified arbitrator in accordance with the American Arbitration Association and its rules then in effect, without reference to conflict of laws principles. Arbitration shall be the exclusive forum for any dispute, claim or cause arising hereunder, and the decision and award by the arbitrator shall be final, binding upon and non-appealable by the parties and may be entered in any state court of California having jurisdiction. The arbitrator shall be without authority or jurisdiction to award either party its attorneys’ fees or costs incurred in the matter. In addition, the

13

arbitrator shall be without authority or jurisdiction to award either party, 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; provided, however, that provisional or injunctive remedies and relief shall be available as appropriate to each party.

     19. Waiver of Right to Jury Trial. Each party, to the fullest extent permitted by law, waives any right or expectation against the other to trial or adjudication by a jury of any claim, cause or action arising hereunder, or the rights, duties or liabilities created hereby.

     20. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the RSU Award and participation in the Plan, or future stock awards that may be granted under the Plan, by electronic means or to request the Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

****************************

     The Grantee acknowledges receipt of a copy of the Plan and the RSU Agreement, and represents that he or she has had an opportunity to review these documents and to be familiar with the terms and provisions thereof, and hereby accepts the RSU Award subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed the Plan and the RSU Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this RSU Agreement. The Grantee agrees to notify the Company upon any change in the residence address indicated in this RSU Agreement.

Submitted by:	Accepted by:
GRANTEE:	ASYST TECHNOLOGIES, INC.
	By:
	Title:	Vice President, General Counsel & Secretary
(Signature)
Address:	Address:
	46897 Bayside Parkway
	Fremont, CA 94538

14

Employee RSA Award Agreement (4-2006)

ASYST TECHNOLOGIES, INC.

2003 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

     1. Restricted Stock Award. As of [___] (the “Date of Award”), Asyst Technologies, Inc., a California corporation (the “Company”), has granted to [insert name] (the “Grantee”) a Restricted Stock Award (the “Restricted Stock Award”) for [insert shares] shares of Common Stock, which is granted by the Company subject to the terms and provisions of this Restricted Stock Award agreement (the “Stock Award Agreement”) and the Company’s 2003 Equity Incentive Plan, as amended from time to time (the “Plan”), which are incorporated herein by reference.

          Unless to the extent otherwise defined herein, the terms in this Stock Award Agreement shall be given the same defined meanings as defined in the Plan.

     2. Vesting Schedule. Subject to the terms of this Stock Award Agreement and the Plan, and provided that you remain in Continuous Service with the Company from the Date of Award, to the vesting date listed below; the shares subject to the Restricted Stock Award shall vest as provided below. No shares will be transferable prior to the applicable vesting date.

Number of Shares Vesting Date

     a. Holding and Other Restrictions on Delivery

     N/A

     b. Acceleration in the event of Death, Disability or Termination of Service

          Regardless of any hold or other restriction on delivery of shares, shares that have vested under the Stock Award will be automatically be available for sale, transfer or other disposition by the Grantee as of the date of the first to occur of the following specific events (provided that such date is after the original vesting date for the shares): (i) a change in control of the Company (as defined under Code Section 409A), (ii) termination of Grantee’s service with the Company (for any reason), (iii) determination of Grantee’s permanent disability, or (iv) the date of Grantee’s death.

     3. Taxes. Regardless of any action the Company or Grantee’s actual employer takes with respect to any or all income tax (including federal, state and local taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax Related Items”), Grantee

15

acknowledges that the ultimate liability for all Tax Related Items legally due by Grantee is and remains Grantee’s responsibility and that the Company and/or the Grantee’s actual employer (i) make no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect of the Restricted Stock Award, including the grant of the Restricted Stock Award, the vesting of the Restricted Stock Award, or the subsequent sale of shares acquired at vesting, pursuant to such Restricted Stock Award and the receipt of any dividends, or the sufficiency of any withholdings or other payments made for or by the Grantee to satisfy the Tax-Related Items; and (ii) do not commit to structure the terms of the grant or any aspect of the Restricted Stock Award to reduce or eliminate the Grantee’s liability for Tax Related Items.

          Prior to the issuance of shares of Common Stock upon vesting of Restricted Stock Award, Grantee shall pay, or make adequate arrangements satisfactory to the Company or to the Grantee’s actual employer (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or the Grantee’s actual employer. In this regard, Grantee authorizes the Company or the Grantee’s actual employer to (in their sole discretion) withhold all applicable Tax Related Items legally payable by Grantee (i) from Grantee’s wages or other cash compensation payable to Grantee by the Company or the Grantee’s actual employer and/or (ii) to withhold in shares, provided that the Company and the Grantee’s actual employer shall withhold only the number of shares necessary to satisfy the minimum withholding amount. Alternatively, or in addition, if permissible under local law Grantee (i) may tender payment in cash or by delivering to the Company owned and unencumbered shares of Asyst Technologies, Inc. and/or (ii) authorize the Company or the Grantee’s actual employer to, sell or arrange for the sale of the number of shares as necessary to satisfy the withholding or payment on account obligation that is due at the vesting of the Restricted Stock Award. Grantee shall pay to the Company or to the Grantee’s actual employer any amount of Tax Related Items that the Company or the Grantee’s actual employer may be required to withhold as a result of Grantee’s receipt of the Restricted Stock Award, the vesting of the Restricted Stock Award, or the subsequent sale of shares acquired pursuant to such Restricted Stock Award and the receipt of any dividends that cannot be satisfied by the means previously described. The Company may refuse to deliver shares to Grantee if Grantee fails to comply with Grantee’s obligation in connection with the Tax Related Items as described herein.

     4. Restrictions on Issuance. No shares will be issued in connection with the Restricted Stock Award if the issuance of such shares would constitute a violation of any applicable laws.

     5. Termination of Continuous Service. In the event that the Grantee ceases to remain in Continuous Service with the Company for any reason, including death or disability, resignation or termination of employment, any unvested portion of the Restricted Stock Award shall automatically terminate and be deemed forfeited.

     6. Transferability of Award. The Restricted Stock Award may not be transferred, pledged, sold, assigned, alienated or otherwise encumbered by the Grantee, in any manner other than by will or by the laws of descent and distribution. Any such purported transfer, pledge, sale, assignment, alienation or encumbrance will be void and unenforceable against the Company. The terms of the Restricted Stock Award shall be binding upon the executors, administrators, heirs and successors of the Grantee.

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     7. Refusal to Transfer. The Company shall not be required (i) to transfer on its books any shares that have been sold or otherwise transferred in violation of any of the provisions of this Restricted Stock Award Agreement or (ii) to treat as owner of such shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred.

     8. Tax Consultation. The Grantee understands that he or she may suffer adverse tax consequences as a result of the Grantee’s receipt or disposition of the shares subject to the Restricted Stock Award (or the vesting of Grantee’s right to receive or dispose of the shares subject to the Restricted Stock Award). The Grantee represents that he or she has had an opportunity to consult with any tax consultants the Grantee deems advisable in connection with receipt or disposition of the shares and that the Grantee is not relying on the Company or its counsel for any tax advice.

     9. Entire Agreement: Governing Law. The Plan and this Stock Award Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the Grantee. Nothing in the Plan and this Stock Award Agreement (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The Plan and this Stock Award Agreement are to be construed in accordance with and governed by the laws of the State of California without giving effect to any conflict of law rule. Should any provision of the Plan or this Stock Award Agreement be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.

     10. Headings. The captions used in this Stock Award Agreement are inserted for convenience and shall not be deemed a part of the Stock Award for construction or interpretation.

     11. Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail (if the parties are within the United States) or upon deposit for delivery by an internationally recognized express mail courier service (for international delivery of notice), with postage and fees prepaid, addressed to the other party at its address as shown below or to such other address as such party may designate in writing from time to time to the other party.

     12. Rights as Shareholder. Except with regard to the disposition of the shares subject to the Restricted Stock Award, Grantee shall generally have all the rights of a shareholder with regard to the shares subject to the Restricted Stock Award from the Date of Award, including without limitation, the right to receive dividends with respect to such shares and the right to vote such shares, but subject to those restrictions in this Stock Award Agreement or in the Plan.

17

     13. Mandatory Arbitration to Resolve Disputes. Any differences, disputes or controversies arising from the Restricted Stock Award or this Stock Award Agreement, and rights or obligations thereunder or hereunder, shall be exclusively submitted to binding arbitration before an independent and qualified arbitrator in accordance with the American Arbitration Association and its rules then in effect, without reference to conflict of laws principles. Arbitration shall be the exclusive forum for any dispute, claim or cause arising hereunder, and the decision and award by the arbitrator shall be final, binding upon and non-appealable by the parties and may be entered in any state court of California having jurisdiction. The arbitrator shall be without authority or jurisdiction to award either party its attorneys’ fees or costs incurred in the matter. In addition, the arbitrator shall be without authority or jurisdiction to award either party, 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; provided, however, that provisional or injunctive remedies and relief shall be available as appropriate to each party.

     14. Waiver of Right to Jury Trial. Each party, to the fullest extent permitted by law, waives any right or expectation against the other to trial or adjudication by a jury of any claim, cause or action arising hereunder, or the rights, duties or liabilities created hereby.

     15. Nature of the Restricted Stock Award. In accepting the Restricted Stock Award, the Grantee acknowledges and agrees that:

          (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Stock Award Agreement;

          (b) the grant of the Restricted Stock Award is voluntary and occasional, and does not create any contractual or other right to receive future grants of stock, or benefits in lieu of awards, even if stock awards have been granted repeatedly in the past;

          (c) all decisions with respect to future grants, if any, will be at the sole discretion of the Company;

          (d) the Grantee’s participation in the Plan shall not create a right to further employment with Grantee’s employer and shall not interfere with the ability of the Company to terminate the Grantee’s employment relationship at any time, with or without cause;

          (e) the Grantee is voluntarily participating in the Plan;

          (f) the Restricted Stock Award is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, and which is outside the scope of the Grantee’s employment contract, if any;

          (g) the Restricted Stock Award is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

18

          (h) in the event that the Grantee is not an employee of the Company, the grant of the Restricted Stock Award will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the grant of the Restricted Stock Award will not be interpreted to form an employment contract with any subsidiary or Affiliate of the Company;

          (i) the future value of the shares is unknown and cannot be predicted with certainty;

          (j) the value of the shares obtained pursuant to the Restricted Stock Award may increase or decrease in value;

          (k) in consideration of the grant of the Restricted Stock Award, the Grantee does not acquire any claim or entitlement to compensation or damages that otherwise could arise from termination of the Restricted Stock Award or diminution in value of the Restricted Stock Award, or shares acquired pursuant to the Restricted Stock Award, upon termination of the Grantee’s employment by the Company (for any reason whatsoever and whether or not in breach of local labor laws), and the Grantee hereby irrevocably waives and releases the Company from any such claim or entitlement that may arise; if, notwithstanding the foregoing, any such claim or entitlement is found by a court of competent jurisdiction to have arisen;

          (l) by signing this Stock Award Agreement, the Grantee shall be deemed irrevocably to have waived his or her right to pursue or seek remedy for any such claim or entitlement;

          (m) notwithstanding any terms or conditions of the Plan to the contrary, in the event of involuntary termination of the Grantee’s employment (whether or not in breach of local labor laws), the Grantee’s right to receive shares under the Plan, or vesting of such right, if any, will terminate automatically as of the Termination Date, and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); and

          (n) the Committee shall have the exclusive discretion to determine when the Grantee is no longer actively employed for purposes of this Restricted Stock Award.

     16. Data Privacy. The Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Company and its subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing the Grantee’s participation in the Plan.

          The Grantee understands that the Company may hold certain personal information about him or her, including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of the Restricted Stock Award or any other entitlement to shares, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, for the purpose of implementing,

19

administering and managing the Plan (“Data”). The Grantee understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Grantee’s country or elsewhere, and that the recipients ‘country may have different data privacy laws and protections than the Grantee’s country. The Grantee understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Grantee may elect to deposit any shares acquired upon vesting of the Restricted Stock Award. The Grantee understands that Data will be held as long as is reasonably necessary to implement, administer and manage the Grantee’s participation in the Plan. The Grantee understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Grantee’s local human resources representative. The Grantee understands, however, that refusing or withdrawing his or her consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, the Grantee understands that he or she may contact his or her local human resources representative.

     17. Language. If the Grantee has received this or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control.

     18. AT WILL RELATIONSHIP. THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE RESTRICTED STOCK AWARD RESULTS ONLY BY CONTINUING SERVICES OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING AWARDED THIS RESTRICTED STOCK AWARD OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS OPTION, THE TERMS AND CONDITIONS WHICH ARE INCORPORATED HEREIN AND MADE A PART HEREOF BY REFERENCE, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED EMPLOYMENT OR ENGAGEMENT AS AN EMPLOYEE, CONSULTANT OR OTHERWISE WITH OR BY THE COMPANY, OR ANY OF ITS SUBSIDIARIES OR AFFILIATES, FOR THE VESTING PERIOD OR FOR ANY PERIOD OR AT ALL, AND SHALL NOT INTERFERE WITH GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE GRANTEE’S EMPLOYMENT OR CONSULTANT OR OTHER RELATIONSHIP AT ANY TIME, FOR ANY REASON, WITH OR WITHOUT CAUSE.

     19. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Award and participation in the Plan, or future Stock Awards that may be granted under the Plan, by electronic means or to request the

20

Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

****************************

     The Grantee acknowledges receipt of a copy of the Plan and the Stock Award Agreement, and represents that he or she has had an opportunity to review these documents and to be familiar with the terms and provisions thereof, and hereby accepts the Restricted Stock Award subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed the Plan and the Stock Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Stock Award Agreement. The Grantee agrees to notify the Company upon any change in the residence address indicated in this Stock Award Agreement.

Submitted by:	Accepted by:
GRANTEE:	ASYST TECHNOLOGIES, INC.
	By:
	Title: Vice President, General Counsel & Secretary
(Signature)
Address:	Address:
	46897 Bayside Parkway
	Fremont, CA 94538

21

Employee RSU Award (2003 Plan)

ASYST TECHNOLOGIES, INC.

2003 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

     1. Restricted Stock Award. As of [insert date] (the “Date of Award”), Asyst Technologies, Inc., a California corporation (the “Company”), has granted to [insert name] (the “Grantee”) a restricted stock unit award (the “RSU Award”), which is an unfunded, unsecured promise by the Company to deliver [insert shares] shares of Common Stock subject to the terms and provisions of this Restricted Stock Award agreement (the “RSU Agreement”) and the Company’s 2003 Equity Incentive Plan, as amended from time to time (the “Plan”), which are incorporated herein by reference.

     Unless otherwise defined herein, the terms in this RSU Agreement shall be given the same defined meanings as defined in the Plan.

     2. Vesting Schedule. Subject to the terms of this RSU Agreement and the Plan, and provided that you remain in Continuous Service with the Company from the Date of Award, to the vesting date listed below; the shares subject to the RSU Award shall vest as provided below and be converted into an equivalent number of shares of Common Stock on the vesting date. In addition, at the sole discretion of the Company, the RSU Award may be settled by a cash payment on the date the Grantee first has a right to receive the shares (the vesting date or the distribution date, as applicable) rather than by a delivery of shares. Such cash payment, if any, will be equal to the Fair Market Value of the shares on the vesting date or the distribution date, as applicable. No shares will be converted or issued and no cash payment, if any, shall be made prior to the applicable vesting date.

Number of RSUs Vesting Date

     a. Holding and Other Restrictions on Delivery

     N/A

     b. Acceleration in the event of Death, Disability or Termination of Service

     Regardless of any hold or other restriction on delivery of shares, shares that have vested under the RSU Award will be automatically accelerated and delivered to the Grantee as of the date of the first to occur of the following specific events (provided that such date is after the original vesting date for the shares): (i) a change in control of the Company (as defined under Code Section 409A), (ii) termination of Grantee’s service with the Company (for any reason), (iii) determination of Grantee’s permanent disability, or (iv) the date of Grantee’s death.

22

     3. Taxes. Regardless of any action the Company or Grantee’s actual employer takes with respect to any or all income tax (including federal, state and local taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax Related Items”), Grantee acknowledges that the ultimate liability for all Tax Related Items legally due by Grantee is and remains Grantee’s responsibility and that the Company and/or the Grantee’s actual employer (i) make no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect of the RSU Award, including the grant of the RSU Award, the vesting of the RSU Award, the conversion of the RSU Award into shares or the receipt of an equivalent cash payment, the subsequent sale of any shares acquired at vesting, the receipt of any dividends, or the sufficiency of any withholdings or other payments made for or by the Grantee to satisfy the Tax-Related Items; and (ii) do not commit to structure the terms of the grant or any aspect of the RSU Award to reduce or eliminate the Grantee’s liability for Tax Related Items.

          No shares will be delivered to the Grantee or equivalent cash payment received until the Grantee has paid, or made adequate arrangements satisfactory to the Company or to the Grantee’s actual employer (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or the Grantee’s actual employer. In this regard, Grantee authorizes the Company or the Grantee’s actual employer to (in their sole discretion) withhold all applicable Tax Related Items legally payable by Grantee (i) from Grantee’s wages or other cash compensation payable to Grantee by the Company or the Grantee’s actual employer or from any equivalent cash payment attributable to the RSU Award and/or (ii) withhold in shares, provided that the Company and the Grantee’s actual employer shall withhold only the number of shares necessary to satisfy the minimum withholding amount due at the time such shares are withheld. Alternatively, or in addition, if permissible under local law the Grantee (i) may tender payment in cash or by delivering to the Company owned and unencumbered shares of Asyst Technologies, Inc. and/or (ii) authorize the Company or the Grantee’s actual employer to, sell or arrange for the sale of the number of shares as necessary to satisfy the withholding or payment on account obligation that is due at the vesting of the RSU award and, if Grantee made a valid Deferral Election , upon the subsequent issuance of shares at the time so elected. Award. With respect to any shares timely and appropriately deferred by the Grantee, the Company or the Grantee’s actual employer shall limit any sale of shares at vesting to the minimum number of shares permitted to avoid a prohibited acceleration under Code Section 409A and the regulations thereunder, as amended from time to time. Grantee shall pay to the Company or to the Grantee’s actual employer any amount of Tax Related Items that the Company or the Grantee’s actual employer may be required to withhold as a result of Grantee’s receipt of the RSU Award, the vesting of the RSU Award, the receipt of an equivalent cash payment, or the conversion of the vested RSU Award into shares that cannot be satisfied by the means previously described. The Company may refuse to deliver shares to Grantee if Grantee fails to comply with Grantee’s obligation in connection with the Tax Related Items as described herein.

     4. Restrictions on Issuance. No shares will be issued in connection with the RSU Award if the issuance of such shares would constitute a violation of any applicable laws.

23

     5. Delivery of Shares. Until shares subject to the RSU Award are issued and delivered, the Grantee will have no rights as a shareholder including the right to receive dividends and the right to vote the shares. In addition, at the sole discretion of the Company, the RSU Award may be settled by a cash payment on the Delivery Date rather than by a delivery of shares. Such cash payment, if any, will be equal to the Fair Market Value of the shares on the Delivery Date.

     6. Termination of Continuous Service. In the event that the Grantee ceases to remain in Continuous Service for any reason, including death, permanent disability, resignation or termination, any unvested portion of the RSU award shall automatically terminate and be deemed forfeited.

     7. Transferability of Award. The RSU Award may not be transferred, pledged, sold, assigned, alienated or otherwise encumbered by Grantee in any manner other than by will or by the laws of descent and distribution. Any such purported transfer, pledge, sale, assignment, alienation or encumbrance will be void and unenforceable against the Company. The terms of the RSU Award shall be binding upon the executors, administrators, heirs and successors of the Grantee.

     8. Refusal to Transfer. The Company shall not be required (i) to transfer on its books any shares that have been sold or otherwise transferred in violation of any of the provisions of this RSU Agreement or (ii) to treat as owner of such shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred.

     9. Tax Consultation. The Grantee understands that he or she may suffer adverse tax consequences as a result of the Grantee’s receipt or disposition of the shares subject to the RSU Award (or the vesting of Grantee’s right to receive or dispose of the shares subject to the RSU Award). The Grantee represents that he or she has had the opportunity to consult with any tax consultants the Grantee deems advisable in connection with receipt or disposition of the shares and that the Grantee is not relying on the Company or its counsel for any tax advice.

     10. Entire Agreement: Governing Law. The Plan and this RSU Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the Grantee. Nothing in the Plan and this RSU Agreement (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The Plan and this RSU Agreement are to be construed in accordance with and governed by the laws of the State of California without giving effect to any conflict of law rule. Should any provision of the Plan or this RSU Agreement be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.

     11. Headings. The captions used in this RSU Agreement are inserted for convenience and shall not be deemed a part of this RSU Agreement for construction or interpretation.

24

     12. Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail (if the parties are within the United States) or upon deposit for delivery by an internationally recognized express mail courier service (for international delivery of notice), with postage and fees prepaid, addressed to the other party at its address as shown below or to such other address as such party may designate in writing from time to time to the other party.

     13. Rights as Shareholder. Until the Grantee has satisfied all requirements for vesting of the RSU Award and such vested shares have been issued and delivered pursuant to the terms of the Plan and this RSU Agreement, the Grantee shall not be deemed to be a shareholder or to have any of the rights of a shareholder with respect to any such shares of stock subject to the RSU Award.

     14. Deferral Election. Grantee may elect to defer distribution of shares that are otherwise due upon vesting by completing the attached deferral election form and returning it to the Company according to the instructions on the deferral election form. If made, the deferral election is irrevocable by Grantee. However, the deferred delivery of vested shares may be accelerated under certain circumstances as set forth in the deferral election form. Please note that a deferring the distribution of shares will have tax consequences for the Grantee and the Grantee is strongly advised to consult with his or her personal tax advisor.

     15. Deferral of Compensation. Payments made pursuant to this Plan and RSU Agreement are intended to comply with or qualify for an exemption from Section 409A of the Internal Revenue Code (“Section 409A”). The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan and/or this RSU Agreement to ensure that all shares subject to the RSU Award are made in a manner that qualifies for exemption from or complies with Section 409A; provided however, that the Company makes no representations that the shares will be exempt from Section 409A and makes no undertaking to preclude Section 409A from applying to this RSU Award.

     16. Nature of the RSU Award. In accepting the RSU Award, the Grantee acknowledges and agrees that:

          (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this RSU Agreement;

          (b) the grant of the RSU Award is voluntary and occasional, and does not create any contractual or other right to receive future grants of awards, or benefits in lieu of awards, even if awards have been granted repeatedly in the past;

          (c) all decisions with respect to future grants, if any, will be at the sole discretion of the Company;

25

          (d) the Grantee’s participation in the Plan shall not create a right to further employment with Grantee’s employer and shall not interfere with the ability of the Company to terminate the Grantee’s employment relationship at any time, with or without cause;

          (e) the Grantee is voluntarily participating in the Plan;

          (f) the RSU Award is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, and which is outside the scope of the Grantee’s employment contract, if any;

          (g) the RSU Award is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

          (h) in the event that the Grantee is not an employee of the Company, the grant of the RSU Award will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the grant of the RSU Award will not be interpreted to form an employment contract with any subsidiary or Affiliate of the Company;

          (i) the future value of the shares is unknown and cannot be predicted with certainty;

          (j) the value of the shares obtained pursuant to the RSU Award may increase or decrease in value;

          (k) in consideration of the grant of the RSU Award, the Grantee does not acquire any claim or entitlement to compensation or damages that otherwise could arise from termination of the RSU Award or diminution in value of the RSU Award, or shares acquired pursuant to the RSU Award, upon termination of the Grantee’s employment by the Company (for any reason whatsoever and whether or not in breach of local labor laws), and the Grantee hereby irrevocably waives and releases the Company from any such claim or entitlement that may arise; if, notwithstanding the foregoing, any such claim or entitlement is found by a court of competent jurisdiction to have arisen;

          (l) by signing this RSU Agreement, the Grantee shall be deemed irrevocably to have waived his or her right to pursue or seek remedy for any such claim or entitlement;

          (m) notwithstanding any terms or conditions of the Plan to the contrary, in the event of involuntary termination of the Grantee’s employment (whether or not in breach of local labor laws), the Grantee’s right to receive shares under the Plan, or vesting of such right, if any, will terminate automatically as of the Termination Date, and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); and

          (n) the Committee shall have the exclusive discretion to determine when the Grantee is no longer actively employed for purposes of this RSU Award.

26

     17. Data Privacy. The Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Company and its subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing the Grantee’s participation in the Plan.

          The Grantee understands that the Company may hold certain personal information about him or her, including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of the RSU or any other entitlement to shares, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). The Grantee understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Grantee’s country or elsewhere, and that the recipients ‘country may have different data privacy laws and protections than the Grantee’s country. The Grantee understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Grantee may elect to deposit any shares acquired upon vesting of the RSU. The Grantee understands that Data will be held as long as is reasonably necessary to implement, administer and manage the Grantee’s participation in the Plan. The Grantee understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Grantee’s local human resources representative. The Grantee understands, however, that refusing or withdrawing his or her consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, the Grantee understands that he or she may contact his or her local human resources representative.

     18. Language. If the Grantee has received this or any other document related to the Plan or the RSU Award translated into a language other than English and if the translated version is different than the English version, the English version will control.

     19. Mandatory Arbitration to Resolve Disputes. Any differences, disputes or controversies arising from the RSU Award or this RSU Agreement, and rights or obligations thereunder or hereunder, shall be exclusively submitted to binding arbitration before an independent and qualified arbitrator in accordance with the American Arbitration Association and its rules then in effect, without reference to conflict of laws principles. Arbitration shall be the exclusive forum for any dispute, claim or cause arising hereunder, and the decision and award by the arbitrator shall be final, binding upon and non-appealable by the parties and may be entered in any state court of California having jurisdiction. The arbitrator shall be without authority or jurisdiction to award either party its attorneys’ fees or costs incurred in the matter. In addition, the

27

arbitrator shall be without authority or jurisdiction to award either party, 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; provided, however, that provisional or injunctive remedies and relief shall be available as appropriate to each party.

     20. Waiver of Right to Jury Trial. Each party, to the fullest extent permitted by law, waives any right or expectation against the other to trial or adjudication by a jury of any claim, cause or action arising hereunder, or the rights, duties or liabilities created hereby.

     21. AT WILL RELATIONSHIP. THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE RSU RESULTS ONLY BY CONTINUING SERVICES OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING AWARDED THIS RSU OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS RSU, THE TERMS AND CONDITIONS WHICH ARE INCORPORATED HEREIN AND MADE A PART HEREOF BY REFERENCE, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED EMPLOYMENT OR ENGAGEMENT AS AN EMPLOYEE, CONSULTANT OR OTHERWISE WITH OR BY THE COMPANY, OR ANY OF ITS SUBSIDIARIES OR AFFILIATES, FOR THE VESTING PERIOD OR FOR ANY PERIOD OR AT ALL, AND SHALL NOT INTERFERE WITH GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE GRANTEE’S EMPLOYMENT OR CONSULTANT OR OTHER RELATIONSHIP AT ANY TIME, FOR ANY REASON, WITH OR WITHOUT CAUSE.

     22. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the RSU Award and participation in the Plan, or future Stock Awards that may be granted under the Plan, by electronic means or to request the Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

****************************

     The Grantee acknowledges receipt of a copy of the Plan and the RSU Agreement, and represents that he or she has had an opportunity to review these documents and to be familiar with the terms and provisions thereof, and hereby accepts the RSU Award subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed the Plan and the RSU Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this RSU Agreement. The Grantee agrees to notify the Company upon any change in the residence address indicated in this RSU Agreement.

28

Submitted by:	Accepted by:
GRANTEE:	ASYST TECHNOLOGIES, INC.
	By:
	Title: Vice President, General Counsel & Secretary
(Signature)
Address:	Address:
	46897 Bayside Parkway
	Fremont, CA 94538

29

EX-10.30

Exhibit 10.30

SUMMARY OF EXECUTIVE BONUS PLAN
ASYST TECHNOLOGIES, INC.

     Our Executive Bonus Plan is a variable incentive compensation program pursuant to which our officers and other senior managers may be awarded compensation in addition to their base salary. The actual incentive award depends on the extent to which the Company determines that articulated objectives have been achieved. The Compensation Committee of the Asyst Board of Directors administers the Plan, including establishing company and individual performance objectives for each executive officer and determining the individual’s performance against those objectives.

     In May 2006, the Compensation Committee also established a target cash bonus amount for each of the Company’s executive officers under the Company’s annual incentive program for its fiscal year 2007. The target bonus amounts for the individual executive officers range from 65% to 125% of base salary. The Compensation Committee has the discretion to award to individual officers more or less than the target bonus amount, based on the Committee’s assessment of an individual’s performance against identified individual objectives. The Compensation Committee will determine the bonus program fund based on the company’s reported earnings per share for its fiscal year ended March 31, 2007.

EX-10.37

Exhibit 10.37

Amendment No 4
Manufacturing Services and Supply Agreement

This Amendment No. 4 to the Manufacturing Services and Supply Agreement (“Amendment”) is entered into between Solectron Corporation, a Delaware corporation, and its subsidiaries and affiliates, which includes Solectron Technology Singapore Ltd., Shinei, Solectron Technology Sdn Bhd, Solectron Netherlands BV and any other Offshore Business Headquarters (together or individually, “Solectron”), and Asyst Technologies, Inc., and its subsidiaries and affiliates (together or individually, “Asyst”), effective August 1, 2005 (the “Amendment Effective Date”) and amends to the extent expressly provided below the Manufacturing Services and Supply Agreement dated September 5, 2002 between Asyst and Solectron (and as previously amended on September 23, 2003, February 17, 2005, June 10, 2005, the “Agreement”).

All terms not expressly defined in this Amendment shall be given the same meaning and intent as defined or provided in the Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Asyst and Supplier hereby agree to amend and do amend the Agreement, as follows:

1. Delete the provisions of Section 10.1, of the base terms of the Agreement in their entirety and insert the following in their place and stead:

Manufacturer’s pricing model is set forth in Attachment R. The prices shall be in U.S. Dollars and other than customs duty, general services tax, or clearance charges, shall include all federal, state, municipal, or government value-added, excise, sales, withholding, transfer, use, occupational or like taxes now or then in force and effect. All prices shall include the cost of packaging and labeling in accordance with the Bill of Materials. The Parties shall review such prices on a quarterly basis and shall make any adjustment necessary to such prices to be competitive with other third party bids and Manufacturer’s own actual manufacturing costs based on the baseline pricing model in Attachment R. Any price changes must be agreed upon in writing by the Parties.

All other Sections of the Agreement, to the extent not expressly amended in this Amendment, shall remain unchanged and in full force and effect. Nothing herein shall otherwise amend, modify or extend any right, obligation or liability of the parties under the Agreement.

Executed and agreed on the dates shown below.

Agreed:		Agreed:
Solectron Corporation		Asyst Technologies, Inc.
By:	/s/ Lawrence Conrad	By:	/s/ Steve Debenham
Authorized Signature		Authorized Signature
Title:	VP, Sales & Acct Mgmnt	Title:	VP, GC & Scty
Date:	December 6, 2005	Date:	11/30/05

EX-10.38

Exhibit 10.38

Amendment No 5
Manufacturing Services and Supply Agreement
[*] Weeks Min Max Project

This Amendment No. 5 to the Manufacturing Services and Supply Agreement (“Amendment”) is entered into between Solectron Corporation, a Delaware corporation, and its subsidiaries and affiliates, which includes Solectron Technology Singapore Ltd., Solectron Technology Sdn. Bhd, Solectron Netherlands BV and any other Offshore Business Headquarters (together or individually, “Solectron”), and Asyst Technologies, Inc., and its subsidiaries and affiliates (together or individually, “Asyst”), effective March 20, 2006 (the “Amendment Effective Date”), and amends to the extent expressly provided below the Manufacturing Services and Supply Agreement dated September 5, 2002 between Asyst and Solectron (and as previously amended on September 23, 2003, February 17, 2005, June 10, 2005, and December 6, 2005 the “Agreement”).

WHEREAS, the parties are entering into this Amendment for the purpose of implementing a stocking program to help reduce Asyst customer lead-times to [*] weeks for certain products.

All terms not expressly defined in this Amendment shall be given the same meaning and intent as defined or provided in the Agreement.

Solectron and Asyst agree to the following additional terms and conditions with respect to implementing a minimum/maximum (“min/max”) model for the Asyst “[*]” product (the “[*] Product”).

1.	Solectron will stock the [*] Product finished goods inventory (“[*] FGI”) at a level no lower than $[*] and a maximum [*] FGI level of $[*], each such inventory level to be determined by the number of the respective [*] Products multiplied by Asyst’s standard cost for such [*] Products (the “[*] Product Value”). The parties will review the min/max levels monthly.
2.	Solectron will suggest changes to the [*] FGI min/max levels required based on historical performance. The [*] FGI min/max levels will be revised when agreed in writing by Asyst and Solectron, which writing will automatically be incorporated into this Amendment by reference.
3.	Asyst’s liability with respect to raw materials, including as necessary to maintain the min/max levels and for the [*] FGI, shall remain as set forth in the Agreement.
4.	Solectron will only be required to build [*] Product to the maximum level as indicated herein and will only be required to refresh the minimum level upon the depletion or reduction of the minimum inventory levels.
5.	Asyst will be invoiced according to the agreed upon pricing for the [*] Product and subject to the terms for payment as set forth in the Agreement upon delivery of [*] Products from the [*] FGI. Delivery shall be as set forth in the Agreement.

Note: [*] indicates material that has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

6.

[*] Products will be held by Solectron in the [*] FGI for a maximum of [*] days and will be tracked according to the methods currently in place with respect tracking of finished goods and in the format attached hereto as Exhibit A; after [*] days Asyst will be required to purchase such [*] Products. If any [*] Product purchased pursuant to this Section 6 by Asyst is to be held by Solectron, then Asyst shall pay a monthly carrying charge of [*] percent ([*]%) of the [*] Product Value of such [*] Product, calculated from the date of purchase by Asyst (which date of purchase shall be the [*] day such [*] Product is held by Solectron) until removed from Solectron’s premises by Asyst.

7.

The [*] Product leadtime and master production schedule loading procedure is set forth in the attached Exhibit B to this Amendment and made a part hereof by this reference.

All other Sections of the Agreement, to the extent not expressly amended in this Amendment, shall remain unchanged and in full force and effect. Nothing herein shall otherwise amend, modify or extend any right, obligation or liability of the parties under the Agreement.

Executed and agreed on the dates shown below.

Agreed:		Agreed:
Solectron Corporation		Asyst Technologies, Inc.
By:	/s/ Darryl Payton	By:	/s/ Steve Debenham
	Authorized Signature		Authorized Signature
Title:	Director Contracts & Compliance	Title:	VP, GC
Date:	03-20-06	Date:	3/21/06

Note: [*] indicates material that has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

EXHIBIT A

52WK No

Fremont

Demand

180 Aged

contra

ECN

Parts OH

Total

Excess +

SLR OH

180 Aged

90 Aged

QTY (from

Parts and

Qty (from

Proposed

Proposed

Customer

Descriptio

Product

180 Aged

90 Aged

Excess

MRB

MRB

E&O

Others

E&O

Buyback

Buyback

90 Aged

Part No.

P/N

n

Std. Cost

Line

OH

BH 180

IN 180

US 180

BH 90

IN 90

US 90

Excess

Excess

MRB

Contra

Liability

Contra

Contra

Report)

(Aug'05)

Report)

Qty

$$

Excess $$

Remark

Exhibit B

[*] Leadtime MPS loading Procedure

Note: [*] indicates material that has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

EX-10.39

Exhibit 10.39

SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS

     This Separation Agreement and Release of All Claims (“Agreement and Release”) is intended to constitute a binding agreement between you, Warren C. Kocmond (“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 May 31, 2006 (the “Effective Date”).

     1. Your employment with Asyst shall terminate on May 31, 2006. 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 paid your earned salary and accrued PTO pay through May 31, 2006. You understand that, except as provided herein, you will not be entitled to any additional payments, severance or other benefits from Asyst associated with any claimed work or right to work beyond the date of your termination. It is agreed that, provided you observe all of your obligations to Asyst, between the time you sign this Agreement and Release and your employment termination date of May 31, 2006, you may seek and accept, but not commence other employment.

     4. Unless to the extent expressly otherwise provided for in Paragraph 8, below, in conjunction with your execution of this Agreement and Release, if you have existing stock options or grants, they will continue to vest through May 31, 2006; however, your vesting shall cease automatically as of that date, and all such vesting shall be subject to the original terms and conditions of your option grant and the Asyst stock option plan from which the grant issued. Unless and to the extent expressly otherwise provided for in Paragraph 8, below, in conjunction with your execution of this Agreement and Release, nothing herein shall operate to continue vesting, extend the original term of the options granted to you or abridge Asyst’s rights to cancel options or repurchase shares, as provided in such option or stock grant or the Asyst stock option plan from which the grant issued. Your participation in Asyst’s Employee Stock Purchase Plan will also automatically cease as of May 31, 2006. Please refer to the plan terms and conditions. Additional information regarding stock options is available. Contact Stock Administration at 520-661-5201 for additional information.

     5. Your health and employee benefits will terminate effective May 31, 2006, except to the extent expressly provided in this Agreement and Release.

     6. 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 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.

     7. Unless to the extent expressly otherwise provided for in Paragraph 8 below, 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.

     8. In addition to the benefits described above, and upon and in consideration of your acceptance, execution and continued observance of the terms and conditions of this Agreement and Release, the following releases, 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, which terms and conditions are incorporated herein by this reference and made a material part of this Agreement and Release, and without further obligation to do so, Asyst agrees to provide you the following additional separation benefits:

     (a) a lump sum payment equivalent to $200,000.00, less payroll and other deductions and withholdings (including deductions required to reimburse Asyst for monies previously extended to you as an Asyst employee). These payments and benefits will be made on next Asyst regular pay-day following May 31, 2006; and

     (b) accelerated vesting in full as of May 31, 2006 of the 10,000 remaining shares of restricted stock under that certain award issued on May 16, 2005 (Award No. 6621).

     9. The terms and conditions of this Agreement and Release supersede and fully replace the terms of your corrected offer letter, executed on May 26, 2004, and your change of control agreement, executed on April 10, 2004. However, your indemnification agreement and all other obligations identified and incorporated herein with Asyst shall survive the termination of your employment with Asyst.

     10. 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 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);

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(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.

     11. 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 11 shall preclude Asyst from enforcing its rights with respect to your obligations under the terms and conditions listed in the first sentence of Paragraph 8 of this Agreement and Release.

     12. 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:

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.

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

     14. 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.

     15. 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,

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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 8, above, may and shall be off-set and deducted from any recovery from such claim.

     16. 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.

     17. 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.

     18. 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.

     19. 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.

     20. 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.

     21. 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

     22. 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.

     23. 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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     24. 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.

     25. 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.

     26. You certify and confirm that you do not have in your possession, 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.

     27. 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.

     28. 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.

     29. To accept this Agreement and Release, please sign and date this Agreement and Release and return the original executed document to Human Resources, Asyst Technologies, Inc., 46897 Bayside Parkway, Fremont, California 94538, no later than May 15, 2006. If you do not return a copy of the executed Agreement and Release by that date, the offer of the benefits described in Paragraph 8 and elsewhere of this Agreement and Release will be automatically deemed revoked.

     30. You understand that 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.

     31. 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.

     32. 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 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.

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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:

Date:	5-31-06	/s/ W. C. Kocmond
		Warren C. Kocmond
		Asyst Technologies, Inc.

Date:	5/31/06	By:	/s/ Steve Debenham
			Steve Debenham
			Vice President, General Counsel and Secretary

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EX-10.40

Exhibit 10.40

ASYST TECHNOLOGIES, INC.
CHANGE-IN-CONTROL AGREEMENT

     THIS CHANGE-IN-CONTROL AGREEMENT (this “Agreement”) is made and entered into as of May 22, 2006 (the “Effective Date”), by and between Asyst Technologies, Inc., a California corporation (“Asyst”), and Steve Debenham (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;

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               (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;

               (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;

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               (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

               (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 15^th day of 3^rd 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

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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 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,

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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.

          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.	46897 Bayside Parkway
General Counsel	Fremont, CA
46897 Bayside Parkway	Fax: (510) 661-5166
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.

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          (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 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

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limited to the amount of reasonable fees and costs actually incurred and which bear a reasonable relation to the prevailing party’s actual recovery.

[The balance of this page has been intentionally left blank]

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

ASYST TECHNOLOGIES, INC.
By:	/s/ Stephen S. Schwartz
	Name:	Stephen S. Schwartz
	Title:	Chief Executive Officer

EXECUTIVE
 

/s/ Steve Debenham  

Steve Debenham 

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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

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of each (the “Released Parties”) from, and agree never to assert against any of the Released Parties any 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

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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:

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

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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.

     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

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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.

     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

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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 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:

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EX-10.41

Exhibit 10.41

ASYST TECHNOLOGIES, INC.
CHANGE-IN-CONTROL AGREEMENT

     THIS CHANGE-IN-CONTROL AGREEMENT (this “Agreement”) is made and entered into as of May 22, 2006 (the “Effective Date”), by and between Asyst Technologies, Inc., a California corporation (“Asyst”), and Alan S. Lowe (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;

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               (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;

               (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;

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               (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

               (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 15^th day of 3^rd 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

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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 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,

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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.

          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.	46897 Bayside Parkway
General Counsel	Fremont, CA
46897 Bayside Parkway	Fax: (510) 661-5166
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.

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          (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 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

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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:	Stephen S. Schwartz
	Name:	Stephen S. Schwartz
	Title:	Chief Executive Officer
EXECUTIVE
/s/ Alan S. Lowe
Executive

8

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

9

of each (the “Released Parties”) from, and agree never to assert against any of the Released Parties any 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

10

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:

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

11

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.

     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

12

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.

     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.

13

     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 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:

14

EX-10.42

Exhibit 10.42

[EXECUTION COPY]

[Published CUSIP Number:                     ]

CREDIT AGREEMENT

Dated as of June 22, 2006

among

ASYST TECHNOLOGIES, INC.
and
ASYST JAPAN, INC.,
as Borrowers,

BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender
and L/C Issuer,

and

The Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager

and

KEYBANK NATIONAL ASSOCIATION

and

COMERICA BANK,
as Co-Documentation Agents

TABLE OF CONTENTS

	Page
ARTICLE I  DEFINITIONS AND ACCOUNTING TERMS		1
1.01 Defined Terms		1
1.02 Other Interpretive Provisions		34
1.03 Accounting Terms		35
1.04 Rounding		36
1.05 Exchange Rates; Currency Equivalents		36
1.06 Change of Currency		36
1.07 Times of Day		36
1.08 Letter of Credit Amounts		36
ARTICLE II  THE COMMITMENTS AND CREDIT EXTENSIONS		37
2.01 The Loans		37
2.02 Borrowings, Conversions and Continuations of Loans		37
2.03 Letters of Credit		39
2.04 Swing Line Loans		50
2.05 Prepayments		53
2.06 Termination or Reduction of Commitments		55
2.07 Repayment of Loans		55
2.08 Interest		56
2.09 Fees		57
2.10 Computation of Interest and Fees		57
2.11 Evidence of Debt		58
2.12 Payments Generally; Administrative Agent’s Clawback		58
2.13 Sharing of Payments by Lenders		60
2.14 Designated Borrowers; Relationship among Borrowers		61
2.15 Increase in Revolving Credit Commitments		63
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY		64
3.01 Taxes		64
3.02 Illegality		66
3.03 Inability to Determine Rates		67
3.04 Increased Costs; Reserves on Eurodollar Rate Loans		67

i

TABLE OF CONTENTS
(continued)

	Page
3.05 Compensation for Losses		69
3.06 Mitigation Obligations; Replacement of Lenders		70
3.07 Survival		70
ARTICLE IV  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS		70
4.01 Conditions of Initial Credit Extension		70
4.02 Conditions to all Credit Extensions		74
ARTICLE V  REPRESENTATIONS AND WARRANTIES		75
5.01 Existence, Qualification and Power		75
5.02 Authorization; No Contravention		76
5.03 Governmental Authorization; Other Consents		76
5.04 Binding Effect		76
5.05 Financial Statements; No Material Adverse Effect; No Internal Control Event		77
5.06 Litigation		78
5.07 Material Contracts		78
5.08 Ownership of Property; Liens; Investments		78
5.09 Environmental Compliance		80
5.10 Insurance		81
5.11 Taxes		81
5.12 ERISA Compliance		81
5.13 Subsidiaries; Equity Interests; Loan Parties		82
5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act		83
5.15 Disclosure		83
5.16 Compliance with Laws		83
5.17 Intellectual Property; Licenses, Etc.		83
5.18 Solvency		84
5.19 Casualty, Etc.		84
5.20 Labor Matters		84
5.21 Collateral Documents		84
5.22 Representations as to Foreign Obligors		84

ii

TABLE OF CONTENTS
(continued)

	Page
5.23 Issuance of Subordinated Debt; Status of Obligations as Senior Indebtedness, etc.		85
5.24 Other Representations and Warranties		86
ARTICLE VI AFFIRMATIVE COVENANTS		86
6.01 Financial Statements		86
6.02 Certificates; Other Information		87
6.03 Notices		90
6.04 Payment of Obligations		91
6.05 Preservation of Existence, Etc.		91
6.06 Maintenance of Properties		91
6.07 Maintenance of Insurance		92
6.08 Compliance with Laws		92
6.09 Books and Records		92
6.10 Inspection Rights		92
6.11 Use of Proceeds		92
6.12 ASI as Loan Party and Equity Interests of ASI		92
6.13 Covenant to Guarantee Obligations and Give Security		93
6.14 Compliance with Environmental Laws		97
6.15 Preparation of Environmental Reports		98
6.16 Further Assurances		98
6.17 Compliance with Terms of Leaseholds		99
6.18 Foreign Government Scheme or Arrangement; Foreign Plan		99
6.19 Lien Searches		100
6.20 Material Contracts		100
6.21 Designation as Senior Debt		100
6.22 Security Interests in Accounts, Etc.		100
6.23 Approvals and Authorizations		100
6.24 Taxpayer Identification Number		100
6.25 Lost AJI Stock Certificates		101
6.26 Post Closing Deliverables		101

iii

TABLE OF CONTENTS
(continued)

	Page
ARTICLE VII NEGATIVE COVENANTS		101
7.01 Liens		102
7.02 Indebtedness		103
7.03 Investments		104
7.04 Fundamental Changes		107
7.05 Dispositions		108
7.06 Restricted Payments		109
7.07 Change in Nature of Business		109
7.08 Transactions with Affiliates		109
7.09 Burdensome Agreements		110
7.10 Use of Proceeds		110
7.11 Financial Covenants		110
7.12 Capital Expenditures		111
7.13 Amendments of Organization Documents		111
7.14 Accounting Changes		111
7.15 Prepayments, Etc. of Indebtedness		111
7.16 Amendment, Etc. of Acquisition Agreement, Related Documents and Debt Documents		111
7.17 Designation of Senior Debt		112
7.18 Lease Obligations		112
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES		112
8.01 Events of Default		112
8.02 Remedies Upon Event of Default		115
8.03 Application of Funds		116
ARTICLE IX ADMINISTRATIVE AGENT		117
9.01 Appointment and Authority		117
9.02 Rights as a Lender		117
9.03 Exculpatory Provisions		118
9.04 Reliance by Administrative Agent		119
9.05 Delegation of Duties		119

iv

TABLE OF CONTENTS
(continued)

	Page
9.06 Resignation of Administrative Agent		119
9.07 Non-Reliance on Administrative Agent and Other Lenders		120
9.08 No Other Duties, Etc.		120
9.09 Administrative Agent May File Proofs of Claim		120
9.10 Collateral and Guaranty Matters		121
ARTICLE X MISCELLANEOUS		122
10.01 Amendments, Etc.		122
10.02 Notices; Effectiveness; Electronic Communications		123
10.03 No Waiver; Cumulative Remedies		125
10.04 Expenses; Indemnity; Damage Waiver		125
10.05 Payments Set Aside		127
10.06 Successors and Assigns		128
10.07 Treatment of Certain Information; Confidentiality		133
10.08 Right of Setoff		134
10.09 Interest Rate Limitation		134
10.10 Counterparts; Integration; Effectiveness		134
10.11 Survival of Representations and Warranties		135
10.12 Severability		135
10.13 Replacement of Lenders		135
10.14 Governing Law; Jurisdiction; Etc.		136
10.15 Waiver of Jury Trial		137
10.16 California Judicial Reference		137
10.17 No Advisory or Fiduciary Responsibility		137
10.18 USA PATRIOT Act Notice		138
10.19 Time of the Essence		138
10.20 Judgment Currency		138
10.21 Appointment and Authority of the Company		139
10.22 ENTIRE AGREEMENT		139
10.23 Lenders’ Joint and Several Rights with Respect to Taiwanese Collateral		139

v

SCHEDULES
2.01	Commitments and Applicable Percentages
5.03	Certain Authorizations
5.05	Existing Indebtedness
5.06	Litigation
5.07	Material Contracts
5.08(b)	Existing Liens
5.08(c)	Owned Real Property
5.08(d)(i)	Leased Real Property (Lessee)
5.08(d)(ii)	Leased Real Property (Lessor)
5.08(e)	Existing Investments
5.08(f)	Material Personal Property
5.08(g)	Accounts
5.12(d)(ii)	Foreign Plans
5.13	Subsidiaries and Other Equity Investments; Loan Parties
5.17	Intellectual Property Matters
5.21	Perfection Filings
5.22	Taxes, Etc.
6.02(f)	Certain Other Information
6.13	Guarantors
7.02	Continuing Indebtedness
7.09	Burdensome Agreements
10.02	Administrative Agent’s Office, Certain Addresses for Notices
10.06	Processing and Recordation Fees

vi

EXHIBITS
Form of
A	Committed Loan Notice
B	Swing Line Loan Notice
C-1	Term Note
C-2	Revolving Credit Note
D	Compliance Certificate
E	Assignment and Assumption
F-1	Company Guaranty
F-2	US Subsidiary Guaranty
F-3	Japanese Guaranty
F-4	UK Subsidiary Guaranty
F-5	Taiwanese Subsidiary Guaranty
G-1	US Security Agreement
G-2	Japanese Security Agreements
G-3	UK Security Agreements
G-4	Taiwanese Security Agreements
H	Designated Borrower Request and Assumption Agreement
I	Designated Borrower Notice
J	Closing Date Certificate
K	Solvency Certificate

vii

CREDIT AGREEMENT

     This CREDIT AGREEMENT is entered into as of June 22, 2006, among ASYST TECHNOLOGIES, INC., a California corporation (the “Company”), ASYST JAPAN, INC., a Japanese corporation (“AJI”), and certain other Subsidiaries of the Company from time to time party hereto pursuant to Section 2.14 (each a “Designated Borrower” and, together with the Company and AJI, the “Borrowers”), each financial institution from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

     Pursuant to the Share Purchase Agreement, dated as of June 22, 2006 (the “Acquisition Agreement”), among the Company, AJI and Shinko Electric, Co. Ltd. (“Shinko”), AJI will acquire 44.1% of the outstanding Equity Interests in Asyst Shinko, Inc., a Japanese corporation (“ASI”), not currently owned by AJI (the “Acquisition”).

     The Company has requested that the Lenders provide a term loan facility and a revolving credit facility to finance the Acquisition and the transaction costs associated therewith, and for general corporate purposes of the Company and its Subsidiaries, and the Lenders are willing to do so on the terms and conditions set forth herein.

     In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

     1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

     “Accounts” means, collectively, “deposit accounts”, “securities accounts” and “commodities accounts” as such terms are defined in the UCC.

     “Acquisition” has the meaning specified in the Preliminary Statements.

     “Acquisition Agreement” has the meaning specified in the Preliminary Statements.

     “Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent or any designee of the foregoing.

     “Administrative Agent’s Office” means, with respect to any currency, the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 with respect to such currency, or such other address or account with respect to such currency as the Administrative Agent may from time to time notify to the Company and the Lenders.

     “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

1

     “Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

     “Aggregate Commitments” means the Commitments of all the Lenders.

     “Agreement” means this Credit Agreement.

     “AJI” is defined in the introductory paragraph hereto.

     “AJI Japanese Security Agreement” means a pledge and security agreement, in substantially the form of Exhibit G-2A.

     “Applicable Foreign Obligor Documents” has the meaning specified in Section 5.22.

     “Applicable Percentage” means (a) in respect of the Term Loan Facility, with respect to any Term Lender at any time, the percentage (carried out to the ninth decimal place) of the Term Loan Facility represented by (i) on or prior to the Closing Date, such Term Lender’s Term Loan Commitment at such time and (ii) thereafter, the principal amount of such Term Lender’s Term Loans at such time and (b) in respect of the Revolving Credit Facility, with respect to any Revolving Credit Lender at any time, the percentage (carried out to the ninth decimal place) of the Revolving Credit Facility represented by such Revolving Credit Lender’s Revolving Credit Commitment at such time. If the commitment of each Revolving Credit Lender to make Revolving Credit Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02, or if the Revolving Credit Commitments have expired, then the Applicable Percentage of each Revolving Credit Lender in respect of the Revolving Credit Facility shall be determined based on the Applicable Percentage of such Revolving Credit Lender in respect of the Revolving Credit Facility most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender in respect of each Facility is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

     “Applicable Rate” means (a) from the Closing Date to the date on which the Administrative Agent receives a Compliance Certificate pursuant to Section 6.02(b) for the fiscal quarter ending June 30, 2006, (i) with respect to the Revolving Credit Facility, 1.75% per annum for Base Rate Loans and 2.75% per annum for Eurodollar Rate Loans and (ii) with respect to the Term Loan Facility, 1.60% per annum for Base Rate Loans and 2.60% per annum for Eurodollar Rate Loans and (b) thereafter, the applicable percentage per annum set forth below determined by reference to the Consolidated Total Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):

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Applicable Rate
						Revolving Credit Facility						Term Loan Facility
		Consolidated				Eurodollar
Pricing		Total Leverage	Commitment			Rate & Letters						Eurodollar
Level		Ratio	Fee			of Credit			Base Rate			Rate			Base Rate
	1	less than or equal to 2.0:1		0.375	%		2.00	%		1.00	%		1.85	%		0.85	%
	2	greater than 2.0:1 but less than or equal to 2.5:1		0.375	%		2.25	%		1.25	%		2.10	%		1.10	%
	3	greater than 2.5:1 but less than or equal to 3.0:1		0.50	%		2.50	%		1.50	%		2.35	%		1.35	%
	4	greater than 3.0:1		0.50	%		2.75	%		1.75	%		2.60	%		1.60	%

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Total Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level 4 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered; provided further that if the Company has not filed its Form 10-K for the fiscal year ending March 31, 2006 with the SEC by (a) September 30, 2006, the Applicable Rate from the beginning of the next succeeding fiscal quarter to the earlier of (x) the date such Form 10-K is filed with the SEC and (y) January 1, 2007, shall be equal to the Applicable Rate then in effect (without giving effect to this proviso) plus 0.25% and (b) December 31, 2006, the Applicable Rate from the beginning of the next succeeding fiscal quarter to the date such Form 10-K is filed with the SEC shall be equal to the Applicable Rate then in effect (without giving effect to this proviso) plus 0.50% (it being understood that, in each case, upon filing of such Form 10-K with the SEC, this proviso shall no longer be in effect and the Applicable Rate shall be as otherwise determined in accordance with this definition).

     “Applicable Revolving Credit Percentage” means, with respect to any Revolving Credit Lender at any time, such Revolving Credit Lender’s Applicable Percentage in respect of the Revolving Credit Facility at such time.

     “Applicable Time” means, with respect to any borrowings and payments in Yen, the local time in the place of settlement for Yen as may be determined by the Administrative Agent or the L/C Issuer, as the case may be, to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.

     “Applicant Borrower” has the meaning specified in Section 2.14.

     “Appropriate Lender” means, at any time, (a) with respect to the Term Loan Facility or the Revolving Credit Facility, a Lender that has a Commitment with respect to such Facility or holds a Term Loan or a Revolving Credit Loan, respectively, at such time, (b) with respect to the Letter of Credit Sublimit, (i) the L/C Issuer and (ii) if any Letters of Credit have been issued

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pursuant to Section 2.03(a), the Revolving Credit Lenders and (c) with respect to the Swing Line Sublimit, (i) the Swing Line Lender and (ii) if any Swing Line Loans are outstanding pursuant to Section 2.04(a), the Revolving Credit Lenders.

     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

     “Arranger” means Banc of America Securities LLC in its capacity as sole lead arranger and sole book manager.

     “ASI” has the meaning specified in the Preliminary Statements hereto.

     “Asset Trigger Event” means, with respect to any Subsidiary, at any time the aggregate book value of the assets of such Subsidiary located in one country, together with the aggregate book value of the assets located in such country of the Company or each other Subsidiary, equals or exceed $1,000,000.

     “Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

     “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.

     “ATI Japanese Security Agreement” means a pledge and security agreement, in substantially the form of Exhibit G-2B.

     “Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease and (c) all Synthetic Debt of such Person.

     “Audited Financial Statements” means the audited consolidated balance sheet of the Company and its Subsidiaries for the fiscal year ended March 31, 2005, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Company and its Subsidiaries, including the notes thereto.

     “Availability Period” means the period from and including the Closing Date to the earliest of (a) the Maturity Date for the Revolving Credit Facility, (b) the date of termination of the Revolving Credit Commitments pursuant to Section 2.06, and (c) the date of termination of the commitment of each Revolving Credit Lender to make Revolving Credit Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

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     “Bank of America” means Bank of America, N.A. and its successors.

     “Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

     “Base Rate Loan” means a Revolving Credit Loan or a Term Loan that bears interest based on the Base Rate. All Base Rate Loans shall be denominated in Dollars.

     “Borrowers” each has the meaning specified in the introductory paragraph hereto.

     “Borrower Account” has the meaning specified in Section 2.05(d).

     “Borrower Materials” has the meaning specified in Section 6.02.

     “Borrowing” means a Revolving Credit Borrowing, a Swing Line Borrowing or a Term Loan Borrowing, as the context may require.

     “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office with respect to Obligations denominated in Dollars is located and:

     (a) if such day relates to any interest rate settings as to a Eurodollar Rate Loan denominated in Dollars, any fundings, disbursements, settlements and payments in Dollars in respect of any such Eurodollar Rate Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market;

     (b) if such day relates to any interest rate settings as to a Eurodollar Rate Loan denominated in a currency other than Dollars, means any such day on which dealings in deposits in the relevant currency are conducted by and between banks in the London or other applicable offshore interbank market for such currency; and

     (c) if such day relates to any fundings, disbursements, settlements and payments in a currency other than Dollars in respect of a Eurodollar Rate Loan denominated in a currency other than Dollars, or any other dealings in any currency other than Dollars to be carried out pursuant to this Agreement in respect of any such Eurodollar Rate Loan (other than any interest rate settings), means any such day on which banks are open for foreign exchange business in the principal financial center of the country of such currency.

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     “Capital Expenditures” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding normal replacements and maintenance which are properly charged to current operations).

     “Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

     “Cash Collateral Account” means a blocked, non-interest bearing deposit account of one or more of the Loan Parties at Bank of America in the name of the Administrative Agent and under the sole dominion and control of the Administrative Agent, and otherwise established in a manner reasonably satisfactory to the Administrative Agent.

     “Cash Collateralize” has the meaning specified in Section 2.03(g).

     “Cash Equivalents” means any of the following types of Investments, to the extent owned by the Company or any of its Subsidiaries free and clear of all Liens (other than Liens created under the Collateral Documents):

     (a) readily marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof having maturities of not more than 360 days from the date of acquisition thereof; provided that the full faith and credit of the United States of America is pledged in support thereof;

     (b) time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as described in clause (c) of this definition and (iii) has combined capital and surplus of at least $1,000,000,000, in each case with maturities of not more than 90 days from the date of acquisition thereof;

     (c) commercial paper issued by any Person organized under the laws of any state of the United States of America and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with maturities of not more than 180 days from the date of acquisition thereof; and

     (d) Investments, classified in accordance with GAAP as current assets of the Company or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P, and the portfolios of which are limited solely to Investments of the character, quality and maturity described in clauses (a), (b) and (c) of this definition.

     “Cash Management Agreement” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

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     “Cash Management Bank” means any Person that, at the time it enters into a Cash Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Cash Management Agreement.

     “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act.

     “CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the US Environmental Protection Agency.

     “CFC” means a Person that is a controlled foreign corporation under Section 957 of the Code.

     “Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

     “Change of Control” means an event or series of events by which:

     (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 20% or more of the equity securities of the Company entitled to vote for members of the board of directors or equivalent governing body of the Company on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right); or

     (b) during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Company cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by

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any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors); or

     (c) any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Company, or control over the equity securities of the Company entitled to vote for members of the board of directors or equivalent governing body of the Company on a fully-diluted basis (and taking into account all such securities that such Person or Persons have the right to acquire pursuant to any option right) representing 20% or more of the combined voting power of such securities; or

     (d) a “change of control” or any comparable term under, and as defined in, any Sub Debt Documents shall have occurred.

     “Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.

     “Closing Date Certificate” means the closing date certificate executed and delivered by a Responsible Officer of each Loan Party substantially in the form of Exhibit J.

     “Code” means the Internal Revenue Code of 1986.

     “Collateral” means, collectively, all of the US Collateral, the Japanese Collateral, the UK Collateral, the Taiwanese Collateral and the Other Foreign Collateral.

     “Collateral Documents” means, collectively, the US Collateral Documents, the Japanese Collateral Documents, the UK Collateral Documents, the Taiwanese Collateral Documents and the Other Foreign Collateral Documents.

     “Commitment” means a Term Loan Commitment or a Revolving Credit Commitment, as the context may require.

     “Committed Loan Notice” means a notice of (a) a Term Loan Borrowing, (b) a Revolving Credit Borrowing, (c) a conversion of Loans from one Type to the other, or (d) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

     “Company” has the meaning specified in the introductory paragraph hereto.

     “Company Guaranty” means the Company Guaranty made by the Company in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit F-1.

     “Compliance Certificate” means a certificate substantially in the form of Exhibit D.

     “Consolidated EBITDA” means, at any date of determination, an amount equal to Consolidated Net Income of the Company and its Subsidiaries on a consolidated basis for the

8

most recently completed Measurement Period plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges, (ii) the provision for Federal, state, local and foreign income taxes payable, and (iii) depreciation and amortization expense and minus (b) to the extent included in calculating such Consolidated Net Income, Federal, state, local and foreign income tax credits (in each case of or by the Company and its Subsidiaries for such Measurement Period).

     “Consolidated Fixed Charge Coverage Ratio” means, at any date of determination, the ratio of (a) (i) Consolidated EBITDA, less (ii) the aggregate amount of all Capital Expenditures, and less (iii) the aggregate amount of Federal, state, local and foreign income taxes paid in cash to (b) the sum of (i) Consolidated Interest Charges and (ii) the aggregate principal amount of all regularly scheduled principal payments, current maturities of borrowed money and redemptions or similar acquisitions for value of outstanding debt for borrowed money, but excluding any such payments to the extent refinanced through the incurrence of additional Indebtedness otherwise expressly permitted under Section 7.02, in each case, of or by the Company and its Subsidiaries for the most recently completed Measurement Period.

     “Consolidated Funded Indebtedness” means, as of any date of determination, for the Company and its Subsidiaries on a consolidated basis, the sum of all Funded Indebtedness.

     “Consolidated Interest Charges” means, for any Measurement Period, the sum of (a) all interest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent paid or payable in cash and treated as interest in accordance with GAAP, (b) all cash interest paid or payable with respect to discontinued operations and (c) the portion of rent expense under Capitalized Leases that is paid or payable in cash and treated as interest in accordance with GAAP, in each case, of or by the Company and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period.

     “Consolidated Net Income” means, at any date of determination, the net income (or loss) of the Company and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period; provided that Consolidated Net Income shall exclude (a) extraordinary gains for such Measurement Period, (b) the net income of any Subsidiary during such Measurement Period to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of such income is not permitted by operation of the terms of its Organization Documents or any agreement, instrument or Law applicable to such Subsidiary during such Measurement Period, except that the Company’s equity in any net loss of any such Subsidiary for such Measurement Period shall be included in determining Consolidated Net Income, and (c) any income (or loss) for such Period of any Person if such Person is not a Subsidiary, except that the Company’s equity in the net income of any such Person for such Measurement Period shall be included in Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such Period to the Company or a Subsidiary as a dividend or other distribution (and in the case of a dividend or other distribution to a Subsidiary, such Subsidiary is not precluded from further distributing such amount to the Company as described in clause (b) of this proviso).

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     “Consolidated Senior Indebtedness” means the Obligations and any and all other Consolidated Funded Indebtedness other than the Subordinated Notes.

     “Consolidated Senior Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Senior Indebtedness as of such date to (b) Consolidated EBITDA of the Company and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period.

     “Consolidated Total Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA of the Company and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period.

     “Continuing Debt” has the meaning specified in Section 7.02(d).

     “Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

     “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

     “Control Agreement” means an agreement in form and substance satisfactory to the Administrative Agent which provides for the Administrative Agent to have “control” (as defined in Section 8-106 of the UCC, as such term relates to investment property (other than certificated securities or commodity contracts), or as used in Section 9-106 of the UCC, as such term relates to commodity contracts, or as used in Section 9-104(a) of the UCC, as such term relates to deposit accounts).

     “Copyright Security Agreement” means any Copyright Security Agreement executed and delivered by any Obligor, in substantially the form of Exhibit C to the US Security Agreement.

     “Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.

     “Debtor Relief Laws” means the Bankruptcy Code of the United States (and any similar provisions of Japanese Laws, UK Laws, Taiwanese Laws and Laws of any jurisdiction where Other Foreign Loan Parties are located), the and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States, Japan or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

     “Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

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     “Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the highest Applicable Rate applicable to Base Rate Loans under the Revolving Credit Facility plus (iii) 2% per annum; provided that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including the highest Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the highest Applicable Rate plus 2% per annum.

     “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Term Loans, Revolving Credit Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

     “Designated Borrower” has the meaning specified in the introductory paragraph hereto.

     “Designated Borrower Notice” has the meaning specified in Section 2.14.

     “Designated Borrower Request and Assumption Agreement” has the meaning specified in Section 2.14.

     “Disclosed Litigation” has the meaning set forth in Section 5.06.

     “Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

     “Dollar” and “$” mean lawful money of the United States.

     “Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in Yen, the equivalent amount thereof in Dollars as determined by the Administrative Agent or the L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Dollars with Yen.

     “Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 10.06(b)(iii)).

     “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including

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those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

     “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Company, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

     “Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

     “Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

     “ERISA” means the Employee Retirement Income Security Act of 1974.

     “ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate.

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     “Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in the relevant currency for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch (or other Bank of America branch or affiliate) to major banks in the London or other offshore interbank market for such currency at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

     “Eurodollar Rate Loan” means a Revolving Credit Loan or a Term Loan that bears interest at a rate based on the Eurodollar Rate. Eurodollar Rate Loans may be denominated in Dollars or in Yen. Except as set forth in Section 2.02(c), all Loans denominated in Yen must be Eurodollar Rate Loans.

     “Event of Default” has the meaning specified in Section 8.01.

     “Excluded Accounts” means, collectively, Accounts of the Company and its Subsidiaries (other than Accounts held at Bank of America or any other Secured Party), the average monthly balance of which at any time, either individually or in the aggregate with all such other Accounts, does not exceed $1,000,000.

     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which such Borrower is located and (c) except as provided in the following sentence, in the case of a Foreign Lender (other than an assignee pursuant to a request by the Company under Section 10.13), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the applicable Borrower with respect to such withholding tax pursuant to Section 3.01(a). Notwithstanding anything to the contrary contained in this definition, “Excluded Taxes” shall not include any withholding tax imposed at any time on payments made by or on behalf of a Foreign Obligor to any Lender

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hereunder or under any other Loan Document, provided that such Lender shall have complied with the last paragraph of Section 3.01(e).

     “Existing Indebtedness” has the meaning specified in Section 5.05(b).

     “Facility” means the Term Loan Facility or the Revolving Credit Facility, as the context may require.

     “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

     “Fee Letter” means the letter agreement, dated February 15, 2006, among the Company, the Administrative Agent and the Arranger.

     “Filing System” has the meaning specified in Section 6.16.

     “Forbearance Letter” means the Forbearance Letter, dated as of the Closing Date, between the Company and the Administrative Agent.

     “Foreign Government Scheme or Arrangement” has the meaning specified in Section 5.12(d).

     “Foreign Lender” means, with respect to any Borrower, any Lender that is organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

     “Foreign Obligor” means a Loan Party other than a US Loan Party.

     “Foreign Plan” has the meaning specified in Section 5.12(d).

     “Foreign Plan Event” means (a) termination in whole of a Foreign Plan by the Company or any of its Subsidiaries; (b) commencement of proceedings by the applicable pension regulator to terminate in whole a Foreign Plan; (c) withdrawal by the Company or any of its Subsidiaries from a “multi-employer pension plan,” as defined under any applicable Foreign Government Scheme or Arrangement; or (d) an event which constitutes grounds under any applicable Foreign Government Scheme or Arrangement for the applicable pension regulator to remove the administrator of a Foreign Plan.

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     “Foreign Subsidiary” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States, a State thereof or the District of Columbia.

     “FRB” means the Board of Governors of the Federal Reserve System of the United States.

     “Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

     “Funded Indebtedness” means, with respect to any Person, (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness, (c) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (e) all Attributable Indebtedness, (f) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above of Persons other than the Company or any Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.

     “GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

     “Governmental Authority” means the government of the United States, Japan or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

     “Granting Lender” has the meaning specified in Section 10.06(h).

     “Guarantee” means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the

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purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

     “Guaranties” means the Company Guaranty, the US Subsidiary Guaranty, the Japanese Guaranty, the UK Subsidiary Guaranty, the Taiwanese Subsidiary Guaranty and each Other Foreign Subsidiary Guaranty.

     “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

     “Hedge Bank” means any Person that, at the time it enters into a Secured Hedge Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Secured Hedge Agreement.

     “Honor Date” has the meaning specified in Section 2.03(c).

     “Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

     (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

     (b) all obligations, direct, contingent or otherwise, of such Person relative to the face amount of all letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

     (c) net obligations of such Person under any Swap Contract;

     (d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business

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and not past due for more than 90 days (or 150 days in the case of trade accounts payable of any Japanese Loan Party) after the date on which such trade account was created);

     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

     (f) all Attributable Indebtedness in respect of Capitalized Leases and Synthetic Lease Obligations of such Person and all Synthetic Debt of such Person;

     (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person or any warrant, right or option to acquire such Equity Interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

     (h) all Guarantees of such Person in respect of any of the foregoing.

     For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Indemnitees” has the meaning specified in Section 10.04(b).

     “Information” has the meaning specified in Section 10.07.

     “Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), each Quarterly Payment Date and the Maturity Date of the Facility under which such Loan was made (with Swing Line Loans being deemed made under the Revolving Credit Facility for purposes of this definition).

     “Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or (if available to all relevant Lenders) six months thereafter, as selected by the Company in its Committed Loan Notice; provided that:

     (a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such

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Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

     (b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

     (c) no Interest Period shall extend beyond the Maturity Date of the Facility under which such Loan was made.

     “Internal Control Event” means a material weakness in, or fraud that involves management or other employees who have a significant role in, the Company’s internal controls over financial reporting, in each case as described in the Securities Laws.

     “Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit or all or a substantial part of the business of, such Person. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

     “IP Rights” has the meaning specified in Section 5.18.

     “IP Security Agreements” means Trademark Security Agreements, Copyright Security Agreements, Patent Security Agreements and each other security or pledge agreement under which intellectual property of the Loan Parties is pledged to the Administrative Agent.

     “IRS” means the United States Internal Revenue Service.

     “ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

     “Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Company (or any Subsidiary) or in favor the L/C Issuer and relating to such Letter of Credit.

     “Japanese Borrowers” means, collectively, AJI and, upon becoming a Designated Borrower, ASI.

     “Japanese Collateral” means all of the “Collateral” and “Mortgaged Property” (or similar terms) referred to in the Japanese Collateral Documents and all of the other property that is or is

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intended under the terms of the Japanese Collateral Documents to be subject to Liens in favor of the Secured Parties (or any of them).

     “Japanese Collateral Documents” means, collectively, the Japanese Security Agreements, the Japanese Mortgages, each of the mortgages, collateral assignments, Japanese Security Agreement supplements, security agreements, pledge agreements or other similar agreements executed by any Japanese Borrower or any Japanese Subsidiary Guarantor and delivered to the Administrative Agent in accordance with Section 6.13, and each of the other agreements, instruments or documents executed and/or delivered by any Japanese Subsidiary Guarantor that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

     “Japanese Guaranty” means each Guaranty made by the Japanese Borrowers and the Japanese Subsidiary Guarantors in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit F-3.

     “Japanese Loan Party” means any Loan Party organized under the Laws of Japan or any political subdivision or jurisdiction thereof.

     “Japanese Mortgages” means each Mortgage delivered by a Japanese Loan Party.

     “Japanese Security Agreement” means each of the ATI Japanese Security Agreement, the AJI Japanese Security Agreement and each other pledge and security agreement and pledge and security agreement supplement delivered by a Japanese Borrower or a Japanese Subsidiary Guarantor in accordance with Section 6.13.

     “Japanese Subsidiary” means any Subsidiary organized under the Laws of Japan or any political subdivision or jurisdiction thereof.

     “Japanese Subsidiary Guarantors” means, collectively, the Japanese Subsidiaries (including the Japanese Borrowers) listed on Schedule 6.13 and each other Japanese Subsidiary that executes and delivers a guaranty or guaranty supplement in accordance with Section 6.13.

     “Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

     “L/C Advance” means, with respect to each Revolving Credit Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Revolving Credit Percentage. All L/C Advances shall be denominated in Dollars.

     “L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Borrowing.

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     “L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

     “L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

     “L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.08. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

     “Lender” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the Swing Line Lender.

     “Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Company and the Administrative Agent.

     “Letter of Credit” means any standby letter of credit issued hereunder. Letters of Credit may be issued in Dollars or in Yen.

     “Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

     “Letter of Credit Expiration Date” means the day that is seven days prior to the Maturity Date then in effect for the Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day).

     “Letter of Credit Fee” has the meaning specified in Section 2.03(i).

     “Letter of Credit Sublimit” means an amount equal to $20,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Credit Facility.

     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

     “Loan” means an extension of credit by a Lender to a Borrower under Article II in the form of a Term Loan, a Revolving Credit Loan or a Swing Line Loan.

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     “Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the Guaranties, (d) the Collateral Documents, (e) the Fee Letter, (f) each Issuer Document, (g) each Secured Hedge Agreement, (h) each Secured Cash Management Agreement, (i) each Designated Borrower Request and Assumption Agreement and (j) the Forbearance Letter; provided that for purposes of the definition of “Material Adverse Effect” and Articles IV through IX, “Loan Documents” shall not include Secured Hedge Agreements or Secured Cash Management Agreements.

     “Loan Parties” means, collectively, the Company, each Japanese Borrower, each Subsidiary Guarantor and each Designated Borrower.

     “Lost AJI Stock Certificates” has the meaning specified in Section 4.01(a)(iv)(A).

     “Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, assets, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any Loan Document, or of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

     “Material Contract” means, collectively, the Acquisition Agreement and Related Documents and, with respect to the Company or any Subsidiary, each other contract to which such Person is a party and which (a) involves aggregate consideration payable to or by such Person of $500,000 or more in any year, (b) involves Indebtedness of such Person of $500,000 or more, (c) involves Indebtedness owed to such Person of $500,000 or more or (d) is otherwise material to the business or operations of such Person; provided that Material Contracts shall not include (x) Loan Documents, (y) contracts with attorneys, accountants and other professionals or (z) customer purchase orders under which an amount equal to or greater than 90% of total payments are to be made within the first three months of such order (other than such purchase orders that, individually or in the aggregate with all purchase orders with the same customer, provide for payments to the Company and/or any of its Subsidiaries over the term of such purchase order(s), which, in the aggregate, equal or exceed 10% of the quarterly revenue of the Company and its Subsidiaries, taken as a whole).

     “Material Personal Property” means the following types of personal property: goods, consumer goods, equipment, chattel paper, instruments, promissory notes, investment property, rights to payment for money or funds advanced or sold, insurance proceeds, general intangibles, payment intangibles, letter-of-credit rights and commercial tort claims, in each case with a book value greater than or equal to $500,000 individually or in the aggregate (with all other property of the same type); provided that “Material Personal Property” shall not include inventory, accounts, deposit accounts, securities accounts, commodity accounts, commodity contracts or Material Contracts. To the extent any of the above terms are defined in Articles 8 or 9 of the UCC such terms shall has such definitions (it being understood that such definitions shall equally apply to property located in the US and property not located in the US).

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     “Material Property” means, collectively, Material Personal Property, Material Real Property and Material Contracts.

     “Material Real Property” means, collectively, (a) any real property with a book value greater than or equal to $1,000,000 individually or in the aggregate during a fiscal year and (b) any lease of real property which contains personal property with a book value greater than or equal to $1,000,000, or which is material to the business or operations of the Loan Party or Subsidiary with an interest therein.

     “Maturity Date” means the earlier of (a) the third anniversary of the Closing Date and (b) unless the aggregate outstanding principal amount of the Subordinated Notes have been Refinanced prior to such date and the maturity date thereof extended to a date at least 91 days following the date set forth in clause (a) above, March 31, 2008.

     “Measurement Period” means, at any date of determination, the most recently completed four fiscal quarters of the Company or, if fewer than four consecutive fiscal quarters of the Company have been completed since the Closing Date, the fiscal quarters of the Company that have been completed since the Closing Date.

     “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

     “Mortgage” means a deed of trust, trust deed, deed to secure debt, mortgage, leasehold mortgage and leasehold deed of trust, in form and substance satisfactory to the Administrative Agent.

     “Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

     “Note” means a Term Note or a Revolving Credit Note, as the context may require.

     “NPL” means the National Priorities List under CERCLA.

     “Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any and all Loan Parties arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

     “Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-US jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint

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venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

     “Other AJI Equity Interests” means Equity Interests of AJI owned by any Person other than the Loan Parties.

     “Other Foreign Collateral” means all of the “Collateral” and “Mortgaged Property” (or similar terms) referred to in the Other Foreign Collateral Documents and all of the other property that is or is intended under the terms of the Other Foreign Collateral Documents to be subject to Liens in favor of the Secured Parties (or any of them).

     “Other Foreign Collateral Documents” means, collectively, the Other Foreign Security Agreements, the Other Foreign Mortgages, each of the mortgages, collateral assignments, Other Foreign Security Agreement supplements, security agreements, pledge agreements or other similar agreements executed by any Other Foreign Loan Party and delivered to the Administrative Agent in accordance with Section 6.13, and each of the other agreements, instruments or documents executed by any Other Foreign Loan Party in connection with any Loan Document that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

     “Other Foreign Loan Party” means any Loan Party that is not a US Loan Party, a Japanese Loan Party, a UK Loan Party or a Taiwanese Loan Party.

     “Other Foreign Mortgages” means each Mortgage delivered by an Other Foreign Loan Party.

     “Other Foreign Security Agreements” means each pledge and security agreement and pledge and security agreement supplement delivered by an Other Foreign Loan Party in accordance with Section 6.13.

     “Other Foreign Subsidiary” means any Subsidiary that is not a US Subsidiary, a Japanese Subsidiary, a UK Subsidiary or a Taiwanese Subsidiary.

     “Other Foreign Subsidiary Guarantors” means, collectively, each Other Foreign Subsidiary that executes and delivers a guaranty or guaranty supplement in accordance with Section 6.13.

     “Other Foreign Subsidiary Guaranty” means each Guaranty made by the Other Foreign Subsidiary Guarantors in favor of the Administrative Agent and the Lenders in accordance with Section 6.13.

     “Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

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     “Outstanding Amount” means (a) with respect to Term Loans and Revolving Credit Loans on any date, the Dollar Equivalent amount of the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Term Loans and Revolving Credit Loans, as the case may be, occurring on such date; (b) with respect to Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of such Swing Line Loans occurring on such date; and (c) with respect to any L/C Obligations on any date, the Dollar Equivalent amount of the aggregate outstanding amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Company of Unreimbursed Amounts.

     “Overnight Rate” means, for any day, (a) with respect to any amount denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent, the L/C Issuer, or the Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation, and (b) with respect to any amount denominated in Yen, the rate of interest per annum at which overnight deposits in Yen, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch or Affiliate of Bank of America in the applicable offshore interbank market for such currency to major banks in such interbank market.

     “Participant” has the meaning specified in Section 10.06(d).

     “Patent Security Agreement” means any Patent Security Agreement executed and delivered by any Obligor, in substantially the form of Exhibit A to the US Security Agreement.

     “PBGC” means the Pension Benefit Guaranty Corporation.

     “PCAOB” means the Public Company Accounting Oversight Board.

     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Company or any ERISA Affiliate or to which the Company or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

     “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

     “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Company or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

     “Platform” has the meaning specified in Section 6.02.

     “Pledged Debt” means all notes and other instruments evidencing Indebtedness pledged under any and all Security Agreements.

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     “Pledged Equity” means all Equity Interests pledged under any and all Security Agreements.

     “Prepayment Amount” has the meaning specified in Section 2.05(a).

     “Prepayment Date” has the meaning specified in Section 2.05(a).

     “Prepayment Notice” has the meaning specified in Section 2.05(a).

     “Quarterly Payment Date” means the last Business Day of each of March, June, September and December.

     “Refinancings” means any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased (other than with respect to Subordinated Notes) at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and the direct or any contingent obligor with respect thereto is not changed, as a result of or in connection with such refinancing, refunding, renewal or extension; provided that the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Loan Parties or the Lenders than the terms of any agreement or instrument governing the Indebtedness being refinanced, refunded, renewed or extended and the interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness does not exceed the then applicable market interest rate.

     “Register” has the meaning specified in Section 10.06(c).

     “Registered Public Accounting Firm” has the meaning specified by the Securities Laws and shall be independent of the Company as prescribed by the Securities Laws.

     “Related Documents” means each of the Ancillary Agreements identified in the Acquisition Agreement and each other material agreement entered into in connection with the Acquisition Agreement.

     “Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

     “Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Term Loans or Revolving Credit Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

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     “Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Revolving Credit Lender for purposes of this definition) and (b) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

     “Required Revolving Lenders” means, as of any date of determination, at least two Revolving Credit Lenders holding more than 50% of the sum of (a) the Total Revolving Credit Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Revolving Credit Lender for purposes of this definition) and (b) the aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Revolving Credit Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders.

     “Required Term Lenders” means, as of any date of determination, at least two Term Lenders holding more than 50% of the Term Loan Facility on such date; provided that the portion of the Term Loan Facility held by any Defaulting Lender shall be excluded for purposes of making a determination of Required Term Lenders.

     “Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or controller of a Loan Party (other than a Japanese Loan Party), or any director, in the case of any Japanese Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

     “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment.

     “Revaluation Date” means (a) with respect to any Loan, each of the following: (i) each date of a Borrowing of a Eurodollar Rate Loan denominated in Yen, and (ii) each date of a continuation of a Eurodollar Rate Loan denominated in Yen pursuant to Section 2.02; and (b) with respect to any Letter of Credit, each of the following: (i) each date of issuance of a Letter of Credit denominated in Yen, (ii) each date of an amendment of any such Letter of Credit having the effect of increasing the amount thereof (solely with respect to the increased amount),

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(iii) each date of any payment by the L/C Issuer under any Letter of Credit denominated in Yen, and (iv) the last Business Day of each calendar month and such additional dates as the Administrative Agent or the L/C Issuer shall determine or the Required Lenders shall require.

     “Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type, in the same currency and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Revolving Credit Lenders pursuant to Section 2.01(b).

     “Revolving Credit Commitment” means, as to each Revolving Credit Lender, its obligation to (a) make Revolving Credit Loans to the Borrower pursuant to Section 2.01(b), (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the Dollar amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

     “Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments at such time. As of the Closing Date the Revolving Credit Facility is $90,000,000.

     “Revolving Credit Lender” means, at any time, any Lender that has a Revolving Credit Commitment at such time.

     “Revolving Credit Loan” has the meaning specified in Section 2.01(b).

     “Revolving Credit Note” means a promissory note made by a Borrower in favor of a Revolving Credit Lender evidencing Revolving Credit Loans or Swing Line Loans, as the case may be, made by such Revolving Credit Lender, substantially in the form of Exhibit C-2.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

     “Same Day Funds” means (a) with respect to disbursements and payments in Dollars and payments in Yen, immediately available funds, and (b) with respect to disbursements in Yen, funds available on a basis as may be determined by the Administrative Agent or the L/C Issuer, as the case may be, to be customary in the place of disbursement for the settlement of international banking transactions in Yen.

     “Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

     “SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

     “Secured Cash Management Agreement” means any Cash Management Agreement that is entered into by and between any Borrower and any Cash Management Bank.

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     “Secured Hedge Agreement” means any interest rate Swap Contract permitted under Section 7.02(a) that is entered into by and between any Borrower and any Hedge Bank.

     “Secured Parties” means, collectively, the Administrative Agent, the Lenders, the L/C Issuer, the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05, or by the Secured Parties pursuant to any other Loan Document, and the other Persons the Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.

     “Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the PCAOB.

     “Security Agreements” means, collectively, the US Security Agreement, the Japanese Security Agreements, the UK Security Agreements, the Taiwanese Security Agreements and the Other Foreign Security Agreements.

     “Shinko” has the meaning specified in the Preliminary Statements.

     “Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the tangible and intangible property (including goodwill) of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

     “SPC” has the meaning specified in Section 10.06(h).

     “Spot Rate” for a currency means the rate determined by the Administrative Agent or the L/C Issuer, as applicable, to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent or the L/C Issuer may obtain such spot rate from another financial institution designated by the Administrative Agent or the L/C Issuer if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency; and provided further that the L/C Issuer may use such spot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated in Yen.

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     “Sub Debt Documents” means, collectively, the loan agreements, indentures, note purchase agreements, promissory notes, guarantees, and other instruments and agreements evidencing the terms of Subordinated Debt (including the Subordinated Notes Documents).

     “Subordinated Debt” means unsecured Indebtedness of a Loan Party (including the Subordinated Notes) subordinated in right of payment to the Obligations pursuant to documentation containing redemption and other prepayment events, maturities, amortization schedules, covenants, events of default, remedies, acceleration rights, subordination provisions and other material terms satisfactory to the Administrative Agent.

     “Subordinated Notes” means the 5 3/4% unsecured convertible subordinated notes of the Company due July 3, 2008 in an aggregate principal amount of $86,700,000 issued and sold on July 3, 2001 pursuant to the Subordinated Notes Documents.

     “Subordinated Notes Documents” means the Indenture, dated as of July 3, 2001, between the Company and State Street Bank and Trust Company of California, N.A., a national banking association, the Subordinated Notes and all other agreements, instruments and other documents pursuant to which the Subordinated Notes have been or will be issued or otherwise setting forth the terms of the Subordinated Notes.

     “Subordination Provisions” is defined in Section 8.01(m).

     “Subsidiary” of a Person means a corporation, partnership, joint venture (other than any joint venture resulting from any strategic investment or joint development arrangement), limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Company.

     “Subsidiary Guarantors” means, collectively, the US Subsidiary Guarantors, the Japanese Subsidiary Guarantors, the UK Subsidiary Guarantors, the Taiwanese Subsidiary Guarantors and the Other Foreign Subsidiary Guarantors.

     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the

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International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

     “Swing Line” means the revolving credit facility made available by the Swing Line Lender pursuant to Section 2.04.

     “Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.

     “Swing Line Lender” means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

     “Swing Line Loan” has the meaning specified in Section 2.04(a).

     “Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit B.

     “Swing Line Sublimit” means an amount equal to the lesser of (a) $10,000,000 and (b) the Revolving Credit Facility. The Swing Line Sublimit is part of, and not in addition to, the Revolving Credit Facility.

     “Synthetic Debt” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

     “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

     “Taiwanese Collateral” means all of the “Collateral” and “Mortgaged Property” (or similar terms) referred to in the Taiwanese Collateral Documents and all of the other property

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that is or is intended under the terms of the Taiwanese Collateral Documents to be subject to Liens in favor of the Secured Parties (or any of them).

     “Taiwanese Collateral Documents” means, collectively, the Taiwanese Security Agreements, the Taiwanese Mortgages, each of the mortgages, collateral assignments, Taiwanese Security Agreement supplements, security agreements, pledge agreements or other similar agreements executed by any Taiwanese Loan Party and delivered to the Administrative Agent in accordance with Section 6.13, and each of the other agreements, instruments or documents executed by any Taiwanese Loan Party that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

     “Taiwanese Loan Party” means any Loan Party that is organized under the Laws of Taiwan or any political subdivision or jurisdiction thereof.

     “Taiwanese Mortgages” means each Mortgage delivered by a Taiwanese Loan Party.

     “Taiwanese Security Agreements” means each pledge and security agreement, in substantially the forms of Exhibit G-4A, G-4B, G-4C,
G-4D and G-4E and each other pledge and security agreement and pledge and security agreement supplement delivered by a Taiwanese Loan Party in accordance with Section 6.13.

     “Taiwanese Subsidiary” means any Subsidiary that is organized under the Laws of Taiwan or any political subdivision or jurisdiction thereof.

     “Taiwanese Subsidiary Guarantors” means, collectively, the Taiwanese Subsidiaries listed on Schedule 6.13 and each other Taiwanese Subsidiary that executes and delivers a guaranty or guaranty supplement in accordance with Section 6.13.

     “Taiwanese Subsidiary Guaranty” means each Guaranty made by the Taiwanese Subsidiary Guarantors in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit F-5.

     “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

     “Term Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Term Loan Commitment at such time and (b) at any time after the Closing Date, any Lender that holds Term Loans at such time.

     “Term Loan” means an advance made by any Term Lender under the Term Loan Facility.

     “Term Loan Borrowing” means a borrowing consisting of simultaneous Term Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Term Lenders pursuant to Section 2.01(a).

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     “Term Loan Commitment” means, as to each Term Lender, its obligation to make Term Loans to the Borrower pursuant to Section 2.01(a) in an aggregate principal amount at any one time outstanding not to exceed the Yen amount set forth opposite such Term Lender’s name on Schedule 2.01 under the caption “Term Loan Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

     “Term Loan Facility” means, at any time, (a) on or prior to the Closing Date, the aggregate amount of the Term Loan Commitments at such time and (b) thereafter, the aggregate principal amount of the Term Loans of all Term Lenders outstanding at such time. As of the Closing Date the Term Loan Facility is ¥2,940,000,000.

     “Term Note” means a promissory note made by the Borrower in favor of a Term Lender evidencing Term Loans made by such Term Lender, substantially in the form of Exhibit C-1.

     “Threshold Amount” means $5,000,000.

     “Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

     “Total Revolving Credit Outstandings” means the aggregate Outstanding Amount of all Revolving Credit Loans, Swing Line Loans and L/C Obligations.

     “Transaction” means, collectively, (a) the consummation of the Acquisition, (b) the entering into by the Loan Parties and their applicable Subsidiaries of the Loan Documents and the Acquisition Agreement and Related Documents, in each case, to which they are or are intended to be a party, (c) the Credit Extensions made on the Closing Date, (d) the refinancing of certain outstanding Indebtedness of the Borrower and its Subsidiaries and the termination of all commitments with respect thereto and (e) the payment of the fees and expenses incurred in connection with the consummation of the foregoing.

     “Trademark Security Agreement” means any Trademark Security Agreement executed and delivered by any Obligor, in substantially in the form of Exhibit B to the US Security Agreement.

     “Type” means, with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

     “UCC” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

     “UK Collateral” means all of the “Collateral” and “Mortgaged Property” (or similar terms) referred to in the UK Collateral Documents and all of the other property that is or is

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intended under the terms of the UK Collateral Documents to be subject to Liens in favor of the Secured Parties (or any of them).

     “UK Collateral Documents” means, collectively, the UK Security Agreements, the UK Mortgages, each of the mortgages, collateral assignments, UK Security Agreement supplements, security agreements, pledge agreements or other similar agreements executed by any UK Loan Party and delivered to the Administrative Agent in accordance with Section 6.13, and each of the other agreements, instruments or documents executed by any UK Loan Party that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

     “UK Loan Party” means any Loan Party that is organized under the Laws of England or Wales or any political subdivision or jurisdiction thereof.

     “UK Mortgages” means each Mortgage delivered by a UK Loan Party.

     “UK Security Agreements” means each pledge and security agreements, in substantially the forms of Exhibit G-3A and Exhibit G-3B, and each other pledge and security agreement and pledge and security agreement supplement delivered by a UK Loan Party in accordance with Section 6.13.

     “UK Subsidiary” means any Subsidiary that is organized under the Laws of England or Wales or any political subdivision or jurisdiction thereof.

     “UK Subsidiary Guarantors” means, collectively, the UK Subsidiaries listed on Schedule 6.13 and each other UK Subsidiary that executes and delivers a guaranty or guaranty supplement in accordance with Section 6.13.

     “UK Subsidiary Guaranty” means each Guaranty made by the UK Subsidiary Guarantors in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit F-4.

     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

     “United Kingdom” and “U.K.” means the United Kingdom of Great Britain and Northern Ireland.

     “United States” and “US” mean the United States of America.

     “Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

     “US Collateral” means all of the “Collateral” and “Mortgaged Property” (or similar terms) referred to in the US Collateral Documents and all of the other property that is or is intended under the terms of the US Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties.

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     “US Collateral Documents” means, collectively, the US Security Agreement, the US Mortgages, each of the mortgages, collateral assignments, US Security Agreement supplements, security agreements, pledge agreements or other similar agreements executed by any US Loan Party and delivered to the Administrative Agent in accordance with Section 6.13, and each of the other agreements, instruments or documents executed by any US Loan Party that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

     “US Loan Party” means any Loan Party that is organized under the Laws of one of the states of the United States of America and that is not a CFC.

     “US Mortgages” means each Mortgage delivered by a US Loan Party.

     “US Security Agreement” means a pledge and security agreement, in substantially the form of Exhibit G-1, and each other pledge and security agreement and pledge and security agreement supplement delivered by a US Loan Party in accordance with Section 6.13.

     “US Subsidiary” means any Subsidiary that is organized under the Laws of one of the states of the United States of America and that is not a CFC.

     “US Subsidiary Guarantors” means, collectively, the US Subsidiaries listed on Schedule 6.13 and each other US Subsidiary that executes and delivers a guaranty or guaranty supplement in accordance with Section 6.13.

     “US Subsidiary Guaranty” means each Guaranty made by the US Subsidiary Guarantors in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit F-2.

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

     “Yen Equivalent” means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in Yen as determined by the Administrative Agent or the L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Yen with Dollars.

     1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

     (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such

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Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

     (b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

     (c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

     1.03 Accounting Terms. (a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

     (b) Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Company or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Company shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

     (c) Consolidation of Variable Interest Entities. All references herein to consolidated financial statements of the Company and its Subsidiaries or to the determination of any amount for the Company and its Subsidiaries on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity that the Company is required to consolidate pursuant to FASB

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Interpretation No. 46 – Consolidation of Variable Interest Entities: an interpretation of ARB No. 51 (January 2003) as if such variable interest entity were a Subsidiary as defined herein.

     1.04 Rounding. Any financial ratios required to be maintained by the Loan Parties pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

     1.05 Exchange Rates; Currency Equivalents. (a) The Administrative Agent or the L/C Issuer, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of Credit Extensions and Outstanding Amounts denominated in Yen. Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur. Except for purposes of financial statements delivered by Loan Parties hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent or the L/C Issuer, as applicable.

     (b) Wherever in this Agreement in connection with a Borrowing, conversion, continuation or prepayment of a Eurodollar Rate Loan or the issuance, amendment or extension of a Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Borrowing, Eurodollar Rate Loan or Letter of Credit is denominated in Yen, such amount shall be the Yen Equivalent of such Dollar amount (rounded to the nearest Yen, with 0.5 of a unit being rounded upward), as determined by the Administrative Agent or the L/C Issuer, as the case may be.

     1.06 Change of Currency. Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.

     1.07 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable).

     1.08 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of the stated amount of such Letter of Credit in effect at such time; provided that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

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ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS

     2.01 The Loans.

     (a) The Term Loan Borrowing. Subject to the terms and conditions set forth herein, each Term Lender severally agrees to make a single loan to AJI in Yen on the Closing Date in an aggregate amount not to exceed such Term Lender’s Term Loan Commitment. The Term Loan Borrowing shall consist of Term Loans made simultaneously by the Term Lenders in accordance with their respective Term Loan Commitments. Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed. Term Loans may only be Eurodollar Rate Loans, except as provided in Section 2.02(c).

     (b) The Revolving Credit Borrowings. Subject to the terms and conditions set forth herein, each Revolving Credit Lender severally agrees to make loans (each such loan, a “Revolving Credit Loan”) to the Borrowers in Dollars or in Yen from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Revolving Credit Commitment; provided that after giving effect to any Revolving Credit Borrowing, (i) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, and (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment. Within the limits of each Revolving Credit Lender’s Revolving Credit Commitment, and subject to the other terms and conditions hereof, the Borrowers may borrow under this Section 2.01(b), prepay under Section 2.05, and reborrow under this Section 2.01(b). Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

     2.02 Borrowings, Conversions and Continuations of Loans. (a) Each Term Loan Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans or Revolving Credit Loans from one Type to the other and each continuation of Eurodollar Rate Loans shall be made upon the Company’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans denominated in Dollars or of any conversion of Eurodollar Rate Loans denominated in Dollars to Base Rate Loans, (ii) five Business Days prior to the requested date of any Borrowing or continuation of Eurodollar Rate Loans denominated in Yen, and (iii) on the requested date of any Borrowing of Base Rate Loans. Each telephonic notice by the Company pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Company. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c),

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each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Company is requesting a Term Loan Borrowing, a Revolving Credit Borrowing, a conversion of Term Loans or Revolving Credit Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Term Loans or Revolving Credit Loans are to be converted, (v) if applicable, the duration of the Interest Period with respect thereto, (vi) the currency of the Revolving Credit Loans to be borrowed, and (vii) if applicable, the Designated Borrower. If the Company fails to specify a currency in a Committed Loan Notice requesting a Revolving Credit Borrowing, then the Revolving Credit Loans so requested shall be made in Dollars. If the Company fails to specify a Type of Revolving Credit Loan in a Committed Loan Notice or if the Company fails to give a timely notice requesting a conversion or continuation, then the applicable Revolving Credit Loans shall be made as, or converted to, Base Rate Loans; provided that in the case of a failure to timely request a continuation of Loans denominated in Yen, such Loans shall be continued as Eurodollar Rate Loans in their original currency with an Interest Period of one month. Any automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Company requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Notwithstanding anything to the contrary herein, a Swing Line Loan may not be converted to a Eurodollar Rate Loan. No Loan may be converted into or continued as a Loan denominated in a different currency. Revolving Credit Loans may be prepaid in the original currency of such Revolving Credit Loan and reborrowed in the other currency.

     (b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount (and currency) of its Applicable Percentage under the Applicable Facility of the applicable Term Loans or Revolving Credit Loans, and if no timely notice of a conversion or continuation is provided by the Company, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans or continuation of Committed Loans denominated in a currency other than Dollars, in each case as described in the preceding clause. In the case of a Term Loan Borrowing or a Revolving Credit Borrowing, each Appropriate Lender shall make the amount of its Loan available to the Administrative Agent in Same Day Funds at the Administrative Agent’s Office for the applicable currency not later than 1:00 p.m., in the case of any Loan denominated in Dollars, and not later than the Applicable Time specified by the Administrative Agent in the case of any Loan in Yen, in each case on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the Company or the other applicable Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of such Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Company;

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provided that if, on the date a Committed Loan Notice with respect to a Revolving Credit Borrowing denominated in Dollars is given by the Company, there are L/C Borrowings outstanding, then the proceeds of such Revolving Credit Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and, second, shall be made available to the applicable Borrower as provided above.

     (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans (whether in Dollars or Yen) without the consent of (x) with respect to Term Loans, the Required Term Lenders, and (y) with respect to Revolving Credit Loans, the Required Revolving Lenders. During the existence of an Event of Default (x) the Required Term Lenders may demand that any or all of the then outstanding Eurodollar Rate Loans that are Term Loans denominated in Yen be redenominated into Dollars in the amount of the Dollar Equivalent thereof, on the last day of the then current Interest Period with respect thereto, and (y) the Required Revolving Lenders may demand that any or all of the then outstanding Eurodollar Rate Loans that are Revolving Credit Loans denominated in Yen be prepaid, or redenominated into Dollars in the amount of the Dollar Equivalent thereof, on the last day of the then current Interest Period with respect thereto.

     (d) The Administrative Agent shall promptly notify the Company and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Company and the Lenders of any change in Bank of America’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

     (e) After giving effect to all Term Loan Borrowings, all conversions of Term Loans from one Type to the other, and all continuations of Term Loans as the same Type, there shall not be more than two Interest Periods in effect in respect of the Term Loan Facility. After giving effect to all Revolving Credit Borrowings, all conversions of Revolving Credit Loans from one Type to the other, and all continuations of Revolving Credit Loans as the same Type, there shall not be more than eight Interest Periods in effect in respect of the Revolving Credit Facility.

     2.03 Letters of Credit. (a) The Letter of Credit Commitment. (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from and including the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars or in Yen for the account of any Borrower, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Letters of Credit; and (B) the Revolving Credit Lenders severally agree to participate in Letters of Credit issued for the account of any Borrower and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the aggregate Outstanding Amount of the

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Revolving Credit Loans of any Revolving Credit Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Company for the issuance, amendment or extension of a Letter of Credit shall be deemed to be a representation by the Company that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Company’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Company may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

     (ii) The L/C Issuer shall not issue any Letter of Credit if:

     (A) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Revolving Lenders have approved such expiry date; or

     (B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date or last extension, unless all the Revolving Credit Lenders have approved such expiry date.

     (iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

     (A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;

     (B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;

     (C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount less than $500,000, in the case of a standby Letter of Credit;

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     (D) except as otherwise agreed by the Administrative Agent and the L/C issuer, such Letter of Credit is to be denominated in a currency other than Dollars or Yen; or

     (E) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the applicable Borrowers or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender.

     (iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.

     (v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

     (vi) The L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.

     (b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit. (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of a Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of such Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount and currency thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter

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of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the L/C Issuer may require. Additionally, the applicable Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.

     (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the applicable Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Revolving Credit Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the applicable Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Revolving Credit Lender’s Applicable Revolving Credit Percentage times the amount of such Letter of Credit.

     (iii) If a Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Company shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Revolving Credit Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by

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telephone or in writing) on or before the day that is five Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Revolving Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Revolving Credit Lender or any Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.

     (iv) If a Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that permits the automatic reinstatement of all or a portion of the stated amount thereof after any drawing thereunder (each, an “Auto-Reinstatement Letter of Credit”). Unless otherwise directed by the L/C Issuer, no Borrower shall be required to make a specific request to the L/C Issuer to permit such reinstatement. Once an Auto-Reinstatement Letter of Credit has been issued, except as provided in the following sentence, the Revolving Credit Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to reinstate all or a portion of the stated amount thereof in accordance with the provisions of such Letter of Credit. Notwithstanding the foregoing, if such Auto-Reinstatement Letter of Credit permits the L/C Issuer to decline to reinstate all or any portion of the stated amount thereof after a drawing thereunder by giving notice of such non-reinstatement within a specified number of days after such drawing (the “Non-Reinstatement Deadline”), the L/C Issuer shall not permit such reinstatement if it has received a notice (which may be by telephone or in writing) on or before the day that is thirty (30) days before the Non-Reinstatement Deadline (A) from the Administrative Agent that the Required Revolving Lenders have elected not to permit such reinstatement or (B) from the Administrative Agent, any Revolving Credit Lender or any Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied (treating such reinstatement as an L/C Credit Extension for purposes of this clause) and, in each case, directing the L/C Issuer not to permit such reinstatement.

     (v) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the applicable Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

     (c) Drawings and Reimbursements; Funding of Participations. (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the applicable Borrower and the Administrative Agent thereof. In the case of a Letter of Credit denominated in Yen, the applicable Borrower shall reimburse the L/C Issuer in Yen, unless (A) the L/C Issuer (at its option) shall have specified in such notice that it will require reimbursement in Dollars, or (B) in the absence of any such requirement for reimbursement in Dollars, the applicable Borrower shall have notified the L/C Issuer promptly following receipt of the notice of drawing that such Borrower will reimburse the L/C Issuer in Dollars. In the case of any such reimbursement in Dollars of a drawing under a Letter of Credit

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denominated in Yen, the L/C Issuer shall notify the applicable Borrower of the Dollar Equivalent of the amount of the drawing promptly following the determination thereof. Not later than 11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of Credit to be reimbursed in Dollars, or the Applicable Time on the date of any payment by the L/C Issuer under a Letter of Credit to be reimbursed in Yen (each such date, an “Honor Date”), the applicable Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing and in the applicable currency. If the applicable Borrower (or any other Borrower) fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Revolving Credit Lender of the Honor Date, the amount of the unreimbursed drawing (expressed in Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter of Credit denominated in Yen) (the “Unreimbursed Amount”), and the amount of such Revolving Credit Lender’s Applicable Revolving Credit Percentage thereof. In such event, the applicable Borrower shall be deemed to have requested a Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Revolving Credit Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

     (ii) Each Revolving Credit Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the L/C Issuer, in Dollars, at the Administrative Agent’s Office for Dollar-denominated payments in an amount equal to its Applicable Revolving Credit Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Company in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer in Dollars.

     (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the applicable Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Revolving Credit Lender’s payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.

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     (iv) Until each Revolving Credit Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Revolving Credit Percentage of such amount shall be solely for the account of the L/C Issuer.

     (v) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, any Borrower, any Subsidiary or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Company of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the applicable Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.

     (vi) If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Committed Loan included in the relevant Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer submitted to any Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

     (d) Repayment of Participations. (i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Credit Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the applicable Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to

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such Lender its Applicable Revolving Credit Percentage thereof in Dollars and in the same funds as those received by the Administrative Agent.

     (ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Revolving Credit Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Revolving Credit Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the applicable Overnight Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

     (e) Obligations Absolute. The obligation of each applicable Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

     (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

     (ii) the existence of any claim, counterclaim, setoff, defense or other right that any Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

     (iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

     (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

46

     (v) any adverse change in the relevant exchange rates or in the availability of the relevant Currency to any Borrower or any Subsidiary or in the relevant currency markets generally; or

     (vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Borrower or any Subsidiary.

     Each Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with such Borrower’s instructions or other irregularity, such Borrower will immediately notify the L/C Issuer. Each Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.

     (f) Role of L/C Issuer. Each Lender and each Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Revolving Credit Lenders or the Required Revolving Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. Each Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude such Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e); provided that anything in such clauses to the contrary notwithstanding, a Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to such Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by such Borrower which such Borrower proves were caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit

47

or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

     (g) Cash Collateral. (i) Within 3 Business Days following the request of the Administrative Agent, (A) if the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (B) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the applicable Borrower shall, in each case, Cash Collateralize the then Outstanding Amount of all L/C Obligations.

     (ii) In addition, if the Administrative Agent notifies the Company at any time that the Outstanding Amount of all L/C Obligations at such time exceeds 105% of the Letter of Credit Sublimit then in effect, then, within three Business Days after receipt of such notice, each Borrower shall Cash Collateralize the L/C Obligations in an amount equal to its pro rata share of the amount by which the Outstanding Amount of all L/C Obligations exceeds the Letter of Credit Sublimit.

     (iii) The Administrative Agent may, at any time and from time to time after the initial deposit of Cash Collateral, request that additional Cash Collateral be provided in order to protect against the results of exchange rate fluctuations.

     (iv) Sections 2.05 and 8.02(c) set forth certain additional requirements to deliver Cash Collateral hereunder. For purposes of this Section 2.03, Section 2.05 and Section 8.02(c), “Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. Each Borrower hereby grants to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a security interest in all such Cash Collateral and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America, or, to the extent requested by the Company, invested in Cash Equivalents of a tenor reasonably satisfactory to the Administrative Agent, which Cash Equivalents shall be held in the name of the applicable Borrower and under control of the Administrative Agent in a manner reasonably satisfactory to Administrative Agent. If at any time the Administrative Agent determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Administrative Agent or that the total amount of such funds is less than the aggregate Outstanding Amount of all L/C Obligations, the applicable Borrower will, within 3 Business Days following demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (x) such aggregate Outstanding Amount over (y) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds

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shall be applied, to the extent permitted under applicable Laws, to reimburse the L/C Issuer; provided that, at the request of applicable Borrower, the Administrative Agent shall, within a reasonable period after such request and so long as no Default then exists and no L/C Obligations remain outstanding, release the Cash Collateral held hereunder as security and shall assign, transfer and deliver to the applicable Borrower (without recourse and without any representations or warranty) such Cash Collateral as is then being released.

     (h) Applicability of ISP. Unless otherwise expressly agreed by the L/C Issuer and the applicable Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of Credit.

     (i) Letter of Credit Fees. Each Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its Applicable Revolving Credit Percentage, in Dollars, a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit issued with respect to such Borrower equal to the Applicable Rate times the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.08. Letter of Credit Fees shall be (i) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Revolving Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

     (j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. Each Borrower shall pay directly to the L/C Issuer for its own account, in Dollars, a fronting fee with respect to each Letter of Credit issued with respect to such Borrower, at the rate per annum specified in the Fee Letter, computed on the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.08. In addition, each Borrower shall pay directly to the L/C Issuer for its own account, in Dollars, the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit issued with respect to such Borrower as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

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     (k) Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

     (l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Company shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Company hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Company, and that the Company’s business derives substantial benefits from the businesses of such Subsidiaries.

     2.04 Swing Line Loans. (a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.04, to make loans in Dollars (each such loan, a “Swing Line Loan”) to the Company from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Revolving Credit Percentage of the Outstanding Amount of Revolving Credit Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Revolving Credit Commitment; provided that after giving effect to any Swing Line Loan, (i) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility at such time, and (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender at such time, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations at such time, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans at such time shall not exceed such Lender’s Revolving Credit Commitment, and provided further that the Company shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Company may borrow under this Section 2.04, prepay under Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Credit Lender’s Applicable Revolving Credit Percentage times the amount of such Swing Line Loan.

     (b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Company’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $1,000,000, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Company. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone

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or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Revolving Credit Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Company.

     (c) Refinancing of Swing Line Loans. (i) The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Company (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Revolving Credit Lender make a Base Rate Loan in an amount equal to such Lender’s Applicable Revolving Credit Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Revolving Credit Facility and the conditions set forth in Section 4.02. The Swing Line Lender shall furnish the Company with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Credit Lender shall make an amount equal to its Applicable Revolving Credit Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in Same Day Funds for the account of the Swing Line Lender at the Administrative Agent’s Office for Dollar-denominated payments not later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Company in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.

     (ii) If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Credit Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Credit Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.

     (iii) If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender

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shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Loan included in the relevant Borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

     (iv) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Company or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02. No such funding of risk participations shall relieve or otherwise impair the obligation of the Company to repay Swing Line Loans, together with interest as provided herein.

     (d) Repayment of Participations. (i) At any time after any Revolving Credit Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Revolving Credit Lender its Applicable Revolving Credit Percentage thereof in the same funds as those received by the Swing Line Lender.

     (ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving Credit Lender shall pay to the Swing Line Lender its Applicable Revolving Credit Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the applicable Overnight Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

     (e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Company for interest on the Swing Line Loans. Until

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each Revolving Credit Lender funds its Base Rate Loan or risk participation pursuant to this Section 2.04 to refinance such Revolving Credit Lender’s Applicable Revolving Credit Percentage of any Swing Line Loan, interest in respect of such Applicable Revolving Credit Percentage shall be solely for the account of the Swing Line Lender.

     (f) Payments Directly to Swing Line Lender. The Company shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.

     2.05 Prepayments. (a) Each Borrower may, upon notice (a “Prepayment Notice”) from the Company to the Administrative Agent, at any time or from time to time, voluntarily prepay Term Loans and Revolving Credit Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of Revolving Credit Loans that are Eurodollar Rate Loans denominated in Dollars, (B) five Business Days prior to any date of prepayment of Revolving Credit Loans that are Eurodollar Rate Loans denominated in Yen, (C) on the date of prepayment of Revolving Credit Loans that are Base Rate Loans and (D) ten Business Days prior to any date of prepayment of Term Loans; (ii) any prepayment of Eurodollar Rate Loans denominated in Dollars shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; (iii) any prepayment of Eurodollar Rate Loans denominated in Yen shall be in a minimum principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iv) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each Prepayment Notice shall specify the date (the “Prepayment Date”) and amount (the “Prepayment Amount”) of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of its receipt of each Prepayment Notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable Percentage in respect of the relevant Facility). With respect to any Term Loan, each Term Lender may decline to be prepaid on the Prepayment Date applicable to a prepayment. If any Term Lender declines to be prepaid on a Prepayment Date, (x) the applicable Borrower shall prepay each non-declining Term Lender an amount equal to its Applicable Percentage of the Prepayment Amount specified in the applicable Prepayment Notice on the Prepayment Date specified in such notice and such amounts shall be due and payable on such date and (y) the applicable Borrower may (but is not required to) make a prepayment to each declining Term Lender in an amount equal to its Applicable Percentage of the Prepayment Amount specified in such Prepayment Notice on the date that is thirty days following the Prepayment Date specified in such notice, and each declining Term Lender shall be required to accept such payment on such later date. If such Borrower elects to make the voluntary prepayment described in clause (y) above, the Company shall send notice (the “Declining Lender Notice”) to the Administrative Agent and the applicable declining Term Lender five Business Days prior to the date of such prepayment, which notice shall specify such later prepayment date and the amount of the prepayment being made to each declining Lender based on its Applicable Percentage of the Prepayment Amount specified in the original Prepayment Notice and the Interest Period(s) of such Loans. If such Declining Lender Notice is given by the Company, the applicable Borrower shall make such prepayment and the payment amounts specified in such notice shall be due and payable on the date specified therein.

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Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. Each prepayment of (x) the outstanding Term Loans pursuant to this Section 2.05(a) shall be applied to the principal repayment installments thereof in inverse order of maturity and (y) the outstanding Revolving Credit Loans shall be applied to the Revolving Credit Loans, and each such prepayment shall be paid to the Lenders in accordance with their respective Applicable Percentages in respect of each of the relevant Facilities.

     (b) The Company may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (B) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Company, the Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

     (c) Mandatory.

     (i) If the Administrative Agent notifies the Company at any time that the Total Revolving Credit Outstandings at such time exceed an amount equal to 105% of the Revolving Credit Facility then in effect, then, within three Business Days after receipt of such notice, each Borrower shall prepay its pro rata share of the Revolving Credit Loans, Swing Line Loans and L/C Borrowings and/or each Borrower shall Cash Collateralize the L/C Obligations in an amount equal to its pro rata share of the aggregate amount sufficient to reduce such Outstanding Amount as of such date of payment to an amount not to exceed 100% of the Revolving Credit Facility then in effect; provided that, subject to the provisions of Section 2.03(g)(ii), no Borrower shall be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(c) unless after the prepayment in full of the Loans the Total Revolving Credit Outstandings exceed the Revolving Credit Facility then in effect. The Administrative Agent may, at any time and from time to time after the initial deposit of such Cash Collateral, request that additional Cash Collateral be provided in order to protect against the results of further exchange rate fluctuations.

     (ii) Prepayments of the Revolving Credit Facility made pursuant to this Section 2.05(c), first, shall be applied ratably to the L/C Borrowings and the Swing Line Loans, second, shall be applied ratably to the outstanding Revolving Credit Loans, and, third, shall be used to Cash Collateralize the remaining L/C Obligations. Upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from the Company or any other Loan Party) to reimburse the L/C Issuer or the Revolving Credit Lenders, as applicable.

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     (d) On each date when the payment of any Obligations are due hereunder or under any Note, each Borrower agrees to maintain on deposit in a Cash Collateral Account (as such account shall be designated by such Borrower in a written notice to the Administrative Agent from time to time, its “Borrower Account”) an amount sufficient to pay such Obligations in full. Each Borrower hereby authorizes the Administrative Agent (i) to deduct automatically all Obligations when due hereunder, or under the Notes from the relevant Borrower Account, and (ii) if and to the extent any payment under this Agreement or any other Loan Document is not made when due, to deduct automatically any such amount from any or all of the accounts of such Borrower maintained with the Administrative Agent. The Administrative Agent agrees to provide timely notice to Borrower of any automatic deduction made pursuant to this Section 2.05(d).

     2.06 Termination or Reduction of Commitments. (a) The Company may, upon notice to the Administrative Agent, terminate the Revolving Credit Facility, the Letter of Credit Sublimit or the Swing Line Sublimit, or from time to time permanently reduce the Revolving Credit Facility, the Letter of Credit Sublimit or the Swing Line Sublimit; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Company shall not terminate or reduce the Revolving Credit Facility if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Credit Outstandings would exceed the Revolving Credit Facility, and (iv) if, after giving effect to any reduction of the Revolving Credit Facility, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Revolving Credit Facility, such Sublimit shall be automatically reduced by the amount of such excess. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Revolving Credit Facility. Any reduction of the Revolving Credit Facility shall be applied to the Commitment of each Lender according to its Applicable Percentage. All fees accrued until the effective date of any termination of the Revolving Credit Facility shall be paid on the effective date of such termination. In addition, the aggregate Term Loan Commitments shall be automatically and permanently reduced to zero on the date of the Term Loan Borrowing.

     (b) The Administrative Agent will promptly notify the Lenders of any termination or reduction of the Letter of Credit Sublimit, Swing Line Sublimit or the Revolving Credit Commitment under this Section 2.06. Upon any reduction of the Revolving Credit Commitments, the Revolving Credit Commitment of each Revolving Credit Lender shall be reduced by such Lender’s Applicable Revolving Credit Percentage of such reduction amount. All fees in respect of the Revolving Credit Facility accrued until the effective date of any termination of the Revolving Credit Facility shall be paid on the effective date of such termination.

     2.07 Repayment of Loans. (a) Term Loans. The applicable Borrowers shall make a scheduled repayment of the aggregate outstanding principal amount, if any, of all Term Loans on each Quarterly Payment Date occurring during each period set forth below in an amount equal to the percentage set forth below opposite such period (or opposite such date) of the aggregate principal amount of Term Loans made on the Closing Date:

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Date	Percentage
September 1, 2006 through (and including) June 30, 2007		5.0	%
September 1, 2007 through (and including) December 31, 2008		10.0	%
March 31, 2009		10.0	%
June 30, 2009		0.0	%

provided that the final principal repayment installment of the Term Loans shall be repaid on the Maturity Date for the Term Loan Facility and in any event shall be in an amount equal to the aggregate principal amount of all Term Loans outstanding on such date.

     (b) Revolving Credit Loans. Each Borrower shall repay to the Revolving Credit Lenders on the Maturity Date for the Revolving Credit Facility the aggregate principal amount of all Revolving Credit Loans made to such Borrower outstanding on such date.

     (c) Swing Line Loans. The Company shall repay each Swing Line Loan on the Maturity Date for the Revolving Credit Facility.

     2.08 Interest. (a) Subject to the provisions of Section 2.08(b), (i) each Eurodollar Rate Loan under a Facility shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate for such Facility; (ii) each Base Rate Loan under a Facility shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for such Facility; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for the Revolving Credit Facility.

     (b) (i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

     (ii) If any amount (other than principal of any Loan) payable by any Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

     (iii) Upon the request of the Required Lenders, while any Event of Default exists, the Borrowers shall pay interest on the principal amount of all

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outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

     (iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

     (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

     2.09 Fees. In addition to certain fees described in Sections 2.03(i) and (j):

     (a) Commitment Fee. Each Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its Applicable Revolving Credit Percentage, a commitment fee in Dollars equal to the Applicable Rate times the actual daily amount by which the Revolving Credit Facility exceeds the sum of (i) the Outstanding Amount of Revolving Credit Loans and (ii) the Outstanding Amount of L/C Obligations. The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on each Quarterly Payment Date, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

     (b) Other Fees. (i) The Company shall pay to the Arranger and the Administrative Agent for their own respective accounts, in Dollars, fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

     (ii) Each Borrower shall pay to the Lenders, in Dollars, such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

     2.10 Computation of Interest and Fees. All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America’s “prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year), or in the case of interest in respect of Loans denominated in Yen as to which market practice differs from the foregoing, in accordance with such market practice. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided

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that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

     2.11 Evidence of Debt. (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender to a Borrower made through the Administrative Agent, such Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans to such Borrower in addition to such accounts or records. Each Lender may attach schedules to a Note and endorse thereon the date, Type (if applicable), amount, currency and maturity of its Loans and payments with respect thereto.

     (b) In addition to the accounts and records referred to in Section 2.11(a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

     2.12 Payments Generally; Administrative Agent’s Clawback. (a) General. All payments to be made by the Borrowers shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein and except with respect to principal of and interest on Loan denominated in Yen, all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in Dollars and in Same Day Funds not later than 2:00 p.m. on the date specified herein. Except as otherwise expressly provided herein, all payments by the Borrowers hereunder with respect to principal and interest on Loans denominated in Yen shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in Yen and in Same Day Funds not later than the Applicable Time specified by the Administrative Agent on the dates specified herein. Without limiting the generality of the foregoing, the Administrative Agent may require that any payments due under this Agreement be made in the United States. If, for any reason, any Borrower is prohibited by any Law from making any required payment hereunder in Yen, such Borrower shall make such payment in Dollars in the Dollar Equivalent of the Yen payment amount. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage in respect of the relevant Facility (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received

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by the Administrative Agent (i) after 2:00 p.m., in the case of payments in Dollars, or (ii) after the Applicable Time specified by the Administrative Agent in the case of payments in Yen, shall in each case be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by any Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

     (b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the applicable Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in Same Day Funds with interest thereon, for each day from and including the date such amount is made available to such Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the Overnight Rate, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by such Borrower, the interest rate applicable to Base Rate Loans. If such Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to such Borrower the amount of such interest paid by such Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by such Borrower shall be without prejudice to any claim such Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

     (ii) Payments by Borrowers; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from a Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer hereunder that such Borrower will not make such payment, the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due. In such event, if such Borrower has not in fact made such payment, then each of the Lenders or the L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the L/C Issuer, in Same Day Funds with interest

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thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Overnight Rate.

     A notice of the Administrative Agent to any Lender or the Company with respect to any amount owing under this clause (b) shall be conclusive, absent manifest error.

     (c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender to any Borrower as provided in the foregoing provisions of this Article II, and such funds are not made available to such Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

     (d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Term Loans and Revolving Credit Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 10.04(c).

     (e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

     (f) Insufficient Funds. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, toward payment of principal and L/C Borrowings then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and L/C Borrowings then due to such parties.

     2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) Obligations in respect of any of the Facilities due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of the Facilities due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations in respect of the Facilities due and payable to all Lenders hereunder and under the other Loan

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Documents at such time obtained by all the Lenders at such time or (b) Obligations in respect of any of the Facilities owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of the Facilities owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time) of payment on account of the Obligations in respect of the Facilities owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Obligations in respect of the Facilities then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:

     (i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

     (ii) the provisions of this Section shall not be construed to apply to (A) any payment made by a Borrower pursuant to and in accordance with the express terms of this Agreement or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than to the Company or any Subsidiary thereof (as to which the provisions of this Section shall apply).

     Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

     2.14 Designated Borrowers; Relationship among Borrowers. (a) The Company may at any time, upon not less than 15 Business Days’ notice from the Company to the Administrative Agent (or such shorter period as may be agreed by the Administrative Agent in its sole discretion), designate any additional Subsidiary Guarantor (an “Applicant Borrower”) as a Designated Borrower to receive Revolving Credit Loans hereunder by delivering to the Administrative Agent (which shall promptly deliver counterparts thereof to each Lender) a duly executed notice and agreement in substantially the form of Exhibit H (a “Designated Borrower Request and Assumption Agreement”). The parties hereto acknowledge and agree that prior to any Applicant Borrower becoming entitled to utilize the credit facilities provided for herein the Administrative Agent and the Revolving Credit Lenders shall have received such supporting resolutions, incumbency certificates, opinions of counsel and other documents or information, in form, content and scope reasonably satisfactory to the Administrative Agent, as may be required

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by the Administrative Agent or the Required Revolving Lenders in their sole discretion, and Notes signed by such new Borrowers to the extent any Revolving Credit Lenders so require. If the Administrative Agent and the Required Revolving Lenders agree that an Applicant Borrower shall be entitled to receive Revolving Credit Loans hereunder, then promptly following receipt of all such requested resolutions, incumbency certificates, opinions of counsel and other documents or information, the Administrative Agent shall send a notice in substantially the form of Exhibit I (a “Designated Borrower Notice”) to the Company and the Revolving Credit Lenders specifying the effective date upon which the Applicant Borrower shall constitute a Designated Borrower for purposes hereof, whereupon each of the Revolving Credit Lenders agrees to permit such Designated Borrower to receive Loans hereunder, on the terms and conditions set forth herein, and each of the parties agrees that such Designated Borrower otherwise shall be a Borrower for all purposes of this Agreement; provided that no Committed Loan Notice or Letter of Credit Application may be submitted by or on behalf of such Designated Borrower until the date five Business Days after such effective date; and provided further that, effective as of the date hereof, the Required Revolving Lenders agree that ASI may become a “Designated Borrower” pursuant hereto (subject to satisfaction of Section 6.13 and the conditions set forth in this Section 2.14) without any requirement of further written consent from the Required Revolving Lenders.

     (b) The Obligations of the Company shall not be joint or several with AJI, ASI or any Designated Borrower that is a Foreign Subsidiary, but shall be joint and several with any Designated Borrower that is a US Subsidiary. The Obligations of AJI, ASI and all Designated Borrowers that are Foreign Subsidiaries shall be joint and several in nature among AJI, ASI, all Designated Borrowers and the Company.

     (c) Each Subsidiary of the Company that is or becomes a “Designated Borrower” pursuant to this Section 2.14 hereby irrevocably appoints the Company as its agent for all purposes relevant to this Agreement and each of the other Loan Documents, including (i) the giving and receipt of notices, (ii) the execution and delivery of all documents, instruments and certificates contemplated herein and all modifications hereto, and (iii) the receipt of the proceeds of any Loans made by the Lenders, to any such Designated Borrower hereunder. Any acknowledgment, consent, direction, certification or other action which might otherwise be valid or effective only if given or taken by all Borrowers, or by each Borrower acting singly, shall be valid and effective if given or taken only by the Company, whether or not any such other Borrower joins therein. Any notice, demand, consent, acknowledgement, direction, certification or other communication delivered to the Company in accordance with the terms of this Agreement shall be deemed to have been delivered to each Designated Borrower.

     (d) The Company may from time to time, upon not less than 15 Business Days’ notice from the Company to the Administrative Agent (or such shorter period as may be agreed by the Administrative Agent in its sole discretion), terminate a Designated Borrower’s status as such, provided that there are no outstanding Loans payable by such Designated Borrower, or other amounts payable by such Designated Borrower on account of any Loans made to it, as of the effective date of such termination. The Administrative Agent will promptly notify the Lenders of any such termination of a Designated Borrower’s status.

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     2.15 Increase in Revolving Credit Commitments. (a) Request for Increase. Provided there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Revolving Credit Lenders), the Company may from time to time, request an increase in the Revolving Credit Facility by an amount (for all such requests) not exceeding $50,000,000; provided that any such request for an increase shall be in a minimum amount of $20,000,000. At the time of sending such notice, the Company (in consultation with the Administrative Agent) shall specify the time period within which each Revolving Credit Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Revolving Credit Lenders).

     (b) Lender Elections to Increase. Each Revolving Credit Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Revolving Credit Commitment and, if so, whether by an amount equal to, greater than, or less than its Applicable Revolving Credit Percentage of such requested increase. Any Revolving Credit Lender not responding within such time period shall be deemed to have declined to increase its Revolving Credit Commitment.

     (c) Notification by Administrative Agent; Additional Lenders. The Administrative Agent shall notify the Company and each Revolving Credit Lender of the Revolving Credit Lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase, and subject to the approval of the Administrative Agent, the L/C Issuer and the Swing Line Lender (which approvals shall not be unreasonably withheld), the Company may also invite additional Eligible Assignees to become Revolving Credit Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel.

     (d) Effective Date and Allocations. If the Revolving Credit Facility is increased in accordance with this Section, the Administrative Agent and the Company shall determine the effective date (the “Revolving Credit Increase Effective Date”) and the final allocation of such increase. The Administrative Agent shall promptly notify the Company and the Revolving Credit Lenders of the final allocation of such increase and the Revolving Credit Increase Effective Date.

     (e) Conditions to Effectiveness of Increase. As a condition precedent to such increase, the Company shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the Revolving Credit Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of the Company, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article V and the other Loan Documents are true and correct on and as of the Revolving Credit Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Section 2.15, the representations and warranties contained in clauses (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and (B) no Default exists. The Borrowers shall prepay any Revolving Credit Loans

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outstanding on the Revolving Credit Increase Effective Date (and pay any additional amounts required pursuant to Section 3.05) to the extent necessary to keep the outstanding Revolving Credit Loans ratable with any revised Applicable Revolving Credit Percentages arising from any nonratable increase in the Revolving Credit Commitments under this Section.

     (f) Conflicting Provisions. This Section shall supersede any provisions in Section 2.13 or 10.01 to the contrary.

ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY

     3.01 Taxes. (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of the respective Borrowers hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if the applicable Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, any Lender or the L/C Issuer, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower such shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

     (b) Payment of Other Taxes by the Borrowers. Without limiting the provisions of clause (a) above, each Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

     (c) Indemnification by the Borrowers. Each Borrower shall indemnify the Administrative Agent, each Lender and the L/C Issuer, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to a Borrower by a Lender or the L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest error.

     (d) Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Borrower to a Governmental Authority, such Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

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     (e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which a Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Company (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Company or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by the Company or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Company or the Administrative Agent as will enable the Company or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

     Without limiting the generality of the foregoing, in the event that a Borrower is resident for tax purposes in the United States, any Foreign Lender shall deliver to the Company and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Company or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

     (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

     (ii) duly completed copies of Internal Revenue Service Form W-8ECI,

     (iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (A) a certificate to the effect that such Foreign Lender is not (1) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the applicable Borrower within the meaning of section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (B) duly completed copies of Internal Revenue Service Form W-8BEN, or

     (iv) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Company to determine the withholding or deduction required to be made.

     Without limiting the obligations of the Lenders set forth above regarding delivery of certain forms and documents to establish each Lender’s status for US withholding tax purposes, each Lender agrees promptly to deliver to the Administrative Agent or the Company, as the Administrative Agent or the Company shall reasonably request, on or prior to the Closing Date, and in a timely fashion thereafter, such other documents and

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forms required by any relevant taxing authorities under the Laws of any other jurisdiction, duly executed and completed by such Lender, as are required under such Laws to confirm such Lender’s entitlement to any available exemption from, or reduction of, applicable withholding taxes in respect of all payments to be made to such Lender outside of the US by the Borrowers pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in such other jurisdiction. Each Lender shall promptly (i) notify the Administrative Agent of any change in circumstances which would modify or render invalid any such claimed exemption or reduction, and (ii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws of any such jurisdiction that any Borrower make any deduction or withholding for taxes from amounts payable to such Lender. Additionally, each of the Borrowers shall promptly deliver to the Administrative Agent or any Lender, as the Administrative Agent or such Lender shall reasonably request, on or prior to the Closing Date, and in a timely fashion thereafter, such documents and forms required by any relevant taxing authorities under the Laws of any jurisdiction, duly executed and completed by such Borrower, as are required to be furnished by such Lender or the Administrative Agent under such Laws in connection with any payment by the Administrative Agent or any Lender of Taxes or Other Taxes, or otherwise in connection with the Loan Documents, with respect to such jurisdiction.

     (f) Treatment of Certain Refunds. If the Administrative Agent, any Lender or the L/C Issuer determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by any Borrower or with respect to which any Borrower has paid additional amounts pursuant to this Section, it shall pay to such Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or the L/C Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that each Borrower, upon the request of the Administrative Agent, such Lender or the L/C Issuer, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or the L/C Issuer in the event the Administrative Agent, such Lender or the L/C Issuer is required to repay such refund to such Governmental Authority. This clause shall not be construed to require the Administrative Agent, any Lender or the L/C Issuer to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Borrower or any other Person.

     3.02 Illegality. Subject to Section 3.06 below to the extent applicable, if any Lender reasonably determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans (whether denominated in Dollars or Yen), or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars or Yen in the applicable interbank market, then, on notice thereof by such

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Lender to the Company through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans in the affected currency or currencies or, in the case of Eurodollar Rate Loans in Dollars, to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Company that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrowers shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable and such Loans are denominated in Dollars, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrowers shall also pay accrued interest on the amount so prepaid or converted.

     3.03 Inability to Determine Rates. If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) deposits (whether in Dollars or Yen) are not being offered to banks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan (whether denominated in Dollars or Yen), or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Company and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans in the affected currency or currencies shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Company may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans in the affected currency or currencies or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

     3.04 Increased Costs; Reserves on Eurodollar Rate Loans (a) Increased Costs Generally. If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e)) or the L/C Issuer;

     (ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such Lender or the L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the L/C Issuer); or

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     (iii) impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the L/C Issuer, the applicable Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.

     (b) Capital Requirements. If any Lender or the L/C Issuer determines that any Change in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with respect to capital adequacy), then from time to time the Company will pay (or cause the applicable Designated Borrower to pay) to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such reduction suffered.

     (c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its holding company, as the case may be, as specified in clause (a) or (b) of this Section and delivered to the Company shall be conclusive absent manifest error. The applicable Borrower shall pay (or cause the applicable Designated Borrower to pay) such Lender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

     (d) Delay in Requests. Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right to demand such compensation, provided that no Borrower shall be required to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies the Company of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the L/C Issuer’s

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intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

     (e) Additional Reserve Requirements. The applicable Borrower shall pay (or cause the applicable Designated Borrower to pay) to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurodollar funds or deposits (currently known as “Eurodollar liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Eurodollar Rate Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which in each case shall be due and payable on each date on which interest is payable on such Loan, provided the Company shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest or costs from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest or costs shall be due and payable 10 days from receipt of such notice.

     3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Company shall promptly compensate (or cause the applicable Designated Borrower to compensate) such Lender for and hold such Lender harmless from any actual loss, cost or expense incurred by it as a result of:

     (a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

     (b) any failure by any Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Company or the applicable Designated Borrower;

     (c) any failure by any Borrower to make payment of any Loan or drawing under any Letter of Credit (or interest due thereon) denominated in Yen on its scheduled due date or any payment thereof in a different currency; or

     (d) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Company pursuant to Section 10.13;

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including any loss of anticipated profits, any foreign exchange losses and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract. The Company shall also pay (or cause the applicable Designated Borrower to pay) any customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Company (or the applicable Designated Borrower) to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the offshore interbank market for such currency for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

     3.06 Mitigation Obligations; Replacement of Lenders. (a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives (or would be required to give) a notice pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Company hereby agrees to pay (or to cause the applicable Designated Borrower to pay) all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

     (b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Company may replace such Lender in accordance with Section 10.13.

     3.07 Survival. All of the Borrowers’ obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.

ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     4.01 Conditions of Initial Credit Extension. The obligation of the L/C Issuer and each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent (other than those conditions expressly provided for in Section 6.26):

     (a) The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated

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the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent:

     (i) executed counterparts of this Agreement, sufficient in number for distribution to the Administrative Agent, each Lender and the Company;

     (ii) Notes executed by the Borrowers in favor of each Lender requesting Notes;

     (iii) each of the Company Guaranty (duly executed by the Company), the Japanese Guaranty (duly executed by AJI) , the UK Guaranty (duly executed by Asyst Technologies Europe Ltd.) and the Taiwanese Guaranty (duly executed by Asyst Tech Taiwan Ltd.);

     (iv) each of the US Security Agreement (duly executed by the Company and AJI), the AJI Japanese Security Agreement (duly executed by AJI), the ATI Japanese Security Agreement (duly executed by the Company), each UK Security Agreement (each duly executed by Asyst Technologies Europe Ltd.) and each Taiwanese Security Agreement (each duly executed by Asyst Tech Taiwan Ltd. and, as applicable, the Company), together with:

     (A) certificates representing the Pledged Equity referred to therein (other than with respect to Pledged Equity representing 2.1% of Equity Interests in AJI owned by ATI to the extent that such certificates have been lost (the “Lost AJI Stock Certificates”), so long as the Company delivers an executed affidavit of lost shares with respect to such certificates) accompanied by undated stock powers executed in blank and instruments evidencing the Pledged Debt indorsed in blank,

     (B) copies of proper financing statements or other filing documents, duly filed on or before the Closing Date under the Uniform Commercial Code (or similar legal or filing regime) of all jurisdictions necessary or desirable in order to perfect the Liens (that can be perfected by filing) created under each Security Agreement, covering the Collateral described in such Security Agreement,

     (C) completed requests for information, dated on or before the Closing Date, listing all effective financing statements (or similar filings) filed in the jurisdictions referred to in clause (B) above that name any Loan Party as debtor, together with copies of such other financing statements to the extent that requests for information are recognized in such jurisdictions,

     (D) account control agreements (or similar agreements) duly executed by the appropriate parties with respect to the Borrower Accounts, and

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     (E) evidence of the completion of all other actions, recordings and filings of or with respect to each Security Agreement necessary or desirable in order to perfect the Liens created thereby (including receipt of duly executed payoff letters, UCC-3 (or similar termination filings) termination statements and landlords’ and bailees’ waiver and consent agreements);

     (v) an access agreement, in form and substance satisfactory to the Administrative Agent, executed by each of the lessors of the leased real properties listed in the first row of item 1 on Schedule 5.08(d)(i);

     (vi) IP Security Agreements, each dated as of the Closing Date, duly executed and delivered by each Loan Party that has delivered a Security Agreement and owns or has applied for any patents, copyrights and/or trademarks, together with (A) evidence that all action necessary or desirable in order to perfect the Liens created under the Security Agreements and the IP Security Agreements has been taken and (B) completed requests for information, dated on or before the Closing Date, listing all effective prior Liens on the collateral referred to in the IP Security Agreements, together with evidence of such prior Liens;

     (vii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party necessary or as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party;

     (viii) such documents and certifications necessary or as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each of the Company and each other Borrower and each Subsidiary Guarantor is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification;

     (ix) an opinion of Baker & McKenzie LLP, US counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, in form and substance satisfactory to the Administrative Agent and the Required Lenders;

     (x) an opinion of Baker & McKenzie LLP, Japanese counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, in form and substance satisfactory to the Administrative Agent and the Required Lenders;

     (xi) an opinion of Baker & McKenzie LLP, U.K. counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, in form and substance satisfactory to the Administrative Agent and the Required Lenders;

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     (xii) an opinion of Baker & McKenzie LLP, Taiwanese counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, in form and substance satisfactory to the Administrative Agent and the Required Lenders;

     (xiii) a Closing Date Certificate, dated as of the Closing Date, in which certificate a Responsible Officer of each Loan Party shall certify that (A) the conditions specified in Article IV have been satisfied, (B) there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect and (C) the statements made therein shall be deemed to be true and correct representations and warranties of such Loan Parties as of such date, and, at the time such certificate is delivered, such statements shall in fact be true and correct. All documents and agreements required to be appended to the Closing Date Certificate in accordance therewith shall be in form and substance satisfactory to the Administrative Agent, shall have been executed and delivered by the requisite parties, and shall be in full force and effect;

     (xiv) a certificate attesting to the Solvency of each Loan Party before and after giving effect to the Transaction, from its chief financial officer, in substantially the form of Exhibit K;

     (xv) evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect, together with the certificates of insurance, naming the Administrative Agent, on behalf of the Lenders, as an additional insured or loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Loan Parties that constitutes Collateral;

     (xvi) a copy of the Acquisition Agreement and Related Documents, duly executed by the parties thereto, together with all exhibits and schedules thereto;

     (xvii) a duly completed Compliance Certificate as of the last day of the fiscal quarter of the Company ended December 31, 2005, signed by chief executive officer, chief financial officer, treasurer or controller of the Company, evidencing pro forma compliance with Section 7.11 and a Consolidated EBITDA for the twelve month period ended December 31, 2005 of at least $53,000,000;

     (xviii) evidence that all Existing Indebtedness (other than Continuing Debt), together with all interest, all prepayment premiums and other amounts due and payable with respect thereto, has been, or concurrently with the Closing Date is being, paid in full and the commitments in respect of such Indebtedness have been terminated and all Liens securing obligations under such Indebtedness have been, or concurrently with the Closing Date are being, released;

     (xix) each Borrower shall establish with the Administrative Agent a deposit account (as such term is defined in Article 9 of the UCC) into which such Borrower shall deposit sufficient funds to comply with Section 2.05(d);

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     (xx) certified copies of (A) the Audited Financial Statements, (B) unaudited consolidated and consolidating balance sheets of the Company and its Subsidiaries dated December 31, 2005, and the related consolidated and consolidating statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on that date, (C) consolidated and consolidating pro forma balance sheet of the Company and its Subsidiaries as at December 31, 2005, and the related consolidated and consolidating pro forma statements of income and cash flows of the Company and its Subsidiaries for the twelve months then ended, giving effect to the Transaction, all in accordance with GAAP and (D) the consolidated and consolidating forecasted balance sheet and statements of income and cash flows of the Company and its Subsidiaries for the three year period from the Closing Date; and

     (xxi) such other assurances, certificates, documents, consents or opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender or any Lender reasonably may require.

     (b) (i) All fees required to be paid to the Administrative Agent and the Arranger on or before the Closing Date and all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date shall have been paid and (ii) all fees required to be paid to the Lenders on or before the Closing Date shall have been paid.

     (c) The Acquisition shall be consummated prior to or concurrently with the Closing Date in accordance with the terms of the Acquisition Agreement and Related Documents, without any waiver or amendment not consented to by the Lenders of any term, provision or condition set forth therein, and in compliance with all applicable requirements of Law.

     Without limiting the generality of the provisions of Section 9.04, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

     4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following conditions precedent:

     (a) The representations and warranties of (i) the Borrowers contained in Article V and (ii) each Loan Party contained in each other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date,

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in which case they shall be true and correct as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in Sections 5.05(a) and (b) shall be deemed to refer to the most recent statements furnished pursuant to Section 6.01(a) and (b), respectively.

     (b) No Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds thereof.

     (c) The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.

     (d) The Administrative Agent shall have received such other approvals, opinions or documents as any Lender through the Administrative Agent may reasonably request.

     (e) If the applicable Borrower is a Designated Borrower, then the conditions of Section 2.14 to the designation of such Borrower as a Designated Borrower shall have been met to the satisfaction of the Administrative Agent.

     (f) In the case of a Credit Extension to be denominated in Yen, there shall not have occurred any material adverse change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which in the reasonable opinion of the Administrative Agent, the Required Term Lenders (in the case of any Term Loans), the Required Revolving Lenders (in the case of any Revolving Credit Loans to be denominated in Yen) or the L/C Issuer (in the case of any Letter of Credit to be denominated in Yen) would make it impracticable for such Credit Extension to be denominated in Yen.

     Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the Company shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V
REPRESENTATIONS AND WARRANTIES

          Each Borrower represents and warrants to the Administrative Agent and the Lenders that:

     5.01 Existence, Qualification and Power. Each Loan Party and each Subsidiary thereof (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents, the Acquisition Agreement and the Related Documents, in each case, to which it is a party and consummate the Transaction, and (c) is duly qualified and

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is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

     5.02 Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document, the Acquisition Agreement and the Related Documents, to which such Person is or is to be a party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any material Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law.

     5.03 Governmental Authorization; Other Consents. (a) No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (i) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, or for the consummation of the Transaction, (ii) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the perfection or maintenance of the Liens created under the Collateral Documents (including, except as expressly permitted herein, the first priority nature thereof) or (iv) the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for the authorizations, approvals, actions, notices and filings listed on Schedule 5.03, all of which have been duly obtained, taken, given or made and are in full force and effect. The Acquisition has been consummated in accordance with the Acquisition Agreement and the Related Documents and applicable Law.

     (b) Under the Laws of the each US, foreign and local jurisdiction in which (x) a Borrower is organized, (y) a Borrower incurs or assumes an Obligation or makes payment with respect to an Obligation or (y) any Collateral is located, there is no requirement that the Administrative Agent, in its capacity as mortgagee or secured party, or any of the Lenders qualify to do business in such jurisdiction or comply with the requirement of any foreign lender statute or to pay any Tax in order to carry out the transactions contemplated by, receive the benefits of, or enforce the provisions of the Loan Documents or the documents provided for therein, nor will the Administrative Agent or any of the Lenders be subject to any other type of taxation in such jurisdiction solely as the result of the performance of such transactions or the enforcement of any rights or remedies granted under any Loan Document.

     5.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except as enforceability may be

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limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles of general applicability.

     5.05 Financial Statements; No Material Adverse Effect; No Internal Control Event.

     (a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the Company and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Company and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

     (b) The unaudited consolidated and consolidating balance sheets of the Company and its Subsidiaries delivered pursuant to Section 4.01 (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present the financial condition of the Company and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments. Schedule 5.05 sets forth all material indebtedness and other liabilities, direct or contingent, of the Company and its consolidated Subsidiaries (other than ASI) as of the Closing Date, including liabilities for taxes, material commitments and Indebtedness (collectively, “Existing Indebtedness”).

     (c) Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

     (d) Other than Internal Control Events that have been publicly disclosed in the Company’s Form 10-K or Form 10-Q filings with the SEC, to the best knowledge of the Company, no Internal Control Event exists or has occurred since the date of the Audited Financial Statements that has resulted in or could reasonably be expected to result in a misstatement in any material respect, in any financial information delivered or to be delivered to the Administrative Agent or the Lenders, of (i) covenant compliance calculations provided hereunder or (ii) the assets, liabilities, financial condition or results of operations of the Company and its Subsidiaries on a consolidated basis.

     (e) The consolidated and consolidating pro forma balance sheet of the Company and its Subsidiaries delivered pursuant to Section 4.01, fairly present the consolidated and consolidating pro forma financial condition of the Company and its Subsidiaries as at such date and the consolidated and consolidating pro forma results of operations of the Company and its Subsidiaries for the period ended on such date, in each case giving effect to the Transaction, all in accordance with GAAP.

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     (f) The consolidated and consolidating forecasted balance sheet and statements of income and cash flows of the Company and its Subsidiaries delivered pursuant to Section 4.01 or Section 6.01(c) were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, the Company’s best estimate of its future financial condition and performance.

     (g) All balance sheets, all statements of income and of cash flow and all other financial information of the Company and its Subsidiaries to be furnished pursuant to Section 6.01 will for periods following the Closing Date be prepared in accordance with GAAP consistently applied and will present fairly in all material respects the consolidated financial condition of the Persons covered thereby as at the dates thereof and the results of their operations for the periods then ended.

     5.06 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Company, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Company or any of its Subsidiaries or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, the Acquisition Agreement, the consummation of the Transaction or any of the transactions contemplated hereby, or (b) except as specifically disclosed in Schedule 5.06, (the “Disclosed Litigation”), either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect, and there has been no material adverse change in the status, or financial effect on any Loan Party or any Subsidiary thereof, of the matters described in Schedule 5.06.

     5.07 Material Contracts. As of the Closing Date and each date on which applicable supplemental reports are required to be delivered pursuant to Section 6.02(i), Schedule 5.07 sets forth a complete and accurate list of all Material Contracts to which a Loan Party or any of the Subsidiaries (other than ASI until ASI becomes a Loan Party) is party to, showing as of the date hereof the parties to such Material Contracts, the dates such Material Contracts were entered into, the subject matter of such Material Contracts, the aggregate consideration payable to or by the parties thereto and any other information useful to determine the materiality of such Material Contract to the business or operations of the Loan Party or Subsidiary party thereto. Neither any Loan Party nor any Subsidiary thereof is in default under or with respect to, or a party to, any Material Contracts that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No default under any Material Contract has occurred and is continuing or would result from the consummation of the Transactions.

     5.08 Ownership of Property; Liens; Investments. (a) Each Loan Party and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     (b) As of the Closing Date, Schedule 5.08(b) sets forth a complete and accurate list of all Liens on the property or assets of each Loan Party and each of its Subsidiaries (other than ASI until ASI becomes a Loan Party), showing as of the date

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hereof the lienholder thereof, the principal amount of the obligations secured thereby and the property or assets of such Loan Party or such Subsidiary subject thereto. The property of each Loan Party and each of its Subsidiaries (other than ASI until ASI becomes a Loan Party) is subject to no Liens, other than Liens set forth on Schedule 5.08(b), and as otherwise permitted by Section 7.01.

     (c) As of the Closing Date and each date on which applicable supplemental reports are required to be delivered pursuant to Section 6.02(i), Schedule 5.08(c) sets forth a complete and accurate list of all real property owned by each Loan Party and each of its Subsidiaries (other than ASI until ASI becomes a Loan Party), showing as of the date hereof the street address, county or other relevant jurisdiction, state, record owner and book and fair value thereof. Each Loan Party and each of its Subsidiaries has good, marketable and insurable fee simple title to the real property owned by such Loan Party or such Subsidiary, free and clear of all Liens, other than Liens created or permitted by the Loan Documents.

     (d) (i) As of the Closing Date and each date on which applicable supplemental reports are required to be delivered pursuant to Section 6.02(i), Schedule 5.08(d)(i) sets forth a complete and accurate list of all leases of real property under which any Loan Party or any Subsidiary of a Loan Party (other than ASI until ASI becomes a Loan Party) is the lessee, showing as of the date hereof the street address, county or other relevant jurisdiction, state, lessor, lessee, expiration date and annual rental cost thereof. Each such lease is the legal, valid and binding obligation of the lessor thereof, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles of general applicability.

     (ii) As of the Closing Date and each date on which applicable supplemental reports are required to be delivered pursuant to Section 6.02(i), Schedule 5.08(d)(ii) sets forth a complete and accurate list of all leases of real property under which any Loan Party or any Subsidiary of a Loan Party (other than ASI until ASI becomes a Loan Party) is the lessor, showing as of the date hereof the street address, county or other relevant jurisdiction, state, lessor, lessee, expiration date and annual rental cost thereof. Each such lease is the legal, valid and binding obligation of the lessee thereof, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles of general applicability.

     (e) As of the Closing Date and each date on which applicable supplemental reports are required to be delivered pursuant to Section 6.02(i), Schedule 5.08(e) sets forth a complete and accurate list of all Investments held by any Loan Party or any Subsidiary of a Loan Party (other than ASI until ASI becomes a Loan Party) on the date hereof, showing as of the date hereof the amount, obligor or issuer and maturity, if any, thereof.

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     (f) As of the Closing Date and each date on which applicable supplemental reports are required to be delivered pursuant to Section 6.02(i), Schedule 5.08(f) sets forth a complete and accurate list of all Material Personal Property of the Company (other than with respect to the Material Personal Property of the Company located in the US) and each Subsidiary (other than ASI until ASI becomes a Loan Party), showing as of the date hereof the owner of such Material Personal Property, the book value of such Material Personal Property, the jurisdiction in which such Material Personal Property is registered and/or located and any other information that is necessary to obtain a perfected security interest in such Material Personal Property in each jurisdiction where it is registered and/or located.

     (g) As of the Closing Date and each date on which applicable supplemental reports are required to be delivered pursuant to Section 6.02(i), Schedule 5.08(g) sets forth a complete and accurate list of all Accounts of the Company and each of its Subsidiaries (other than ASI until ASI becomes a Loan Party), showing the type of each such Account, the financial institution in which each such Account is maintained, the then average monthly balance of each such Account and which such Accounts are Excluded Accounts.

     5.09 Environmental Compliance. (a) Neither compliance with any applicable Environmental Laws by the Loan Parties and their respective Subsidiaries, nor any claims alleging potential liability under, or violation of, any Environmental Law with respect to the Loan Parties and their respective Subsidiaries, could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     (b) None of the properties currently or formerly owned or operated by any Loan Party or any of its Subsidiaries is listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list or is adjacent to any such property; to the best of the Company’s knowledge, there are no and never have been any underground or above-ground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries; to the best of the Company’s knowledge, there is no asbestos or asbestos-containing material on any property currently owned or operated by any Loan Party or any of its Subsidiaries; and, to the best of the Company’s knowledge, Hazardous Materials have not been released, discharged or disposed of on any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries, in a manner which could reasonably be expected to result in a material liability to any Loan Party or any of its Subsidiaries.

     (c) Neither any Loan Party nor any of its Subsidiaries is undertaking, and has not completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law; and all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or

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formerly owned or operated by any Loan Party or any of its Subsidiaries have been managed in a manner not reasonably expected to result in material liability to any Loan Party or any of its Subsidiaries.

     (d) To the knowledge of any Loan Party, there is no liability arising under Environmental Law that would materially interfere with the satisfaction of any Contractual Obligation owed to any Loan Party or any of its Subsidiaries.

     5.10 Insurance. The properties of the Company and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Company, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Company or the applicable Subsidiary operates.

     5.11 Taxes. The Company and its Subsidiaries have filed all Federal, state and other (foreign and US) material tax returns and reports required to be filed, and have paid all Federal, state and other (foreign and US) material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against the Company or any Subsidiary that would, if made, be reasonably expected to have a Material Adverse Effect. Neither any Loan Party nor any Subsidiary thereof is party to any tax sharing agreement.

     5.12 ERISA Compliance. (a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of the Company, nothing has occurred which would prevent, or cause the loss of, such qualification. The Company and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

     (b) There are no pending or, to the best knowledge of the Company, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

     (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which,

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with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Company nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.

     (d) With respect to each scheme or arrangement mandated by a government other than the United States (a “Foreign Government Scheme or Arrangement”) and with respect to each employee benefit plan maintained or contributed to by any Loan Party or any Subsidiary of any Loan Party that is not subject to United States law (a “Foreign Plan”):

     (i) any employer and employee contributions required by law or by the terms of any Foreign Government Scheme or Arrangement or any Foreign Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices;

     (ii) except as disclosed in Schedule 5.12(d)(ii) (other with respect to ASI until ASI is a Loan Party), the fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations, as of the date hereof, with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with applicable generally accepted accounting principles; and

     (iii) each Foreign Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities.

     5.13 Subsidiaries; Equity Interests; Loan Parties. No Loan Party has any Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13, and all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and non-assessable (or equivalent thereof to the extent applicable in the jurisdiction in which Equity Interests are issued) and are owned by a Loan Party (or other Person) in the amounts specified on Part (a) of Schedule 5.13 free and clear of all Liens except those created under the Collateral Documents. No Loan Party has any equity investments in any other corporation or entity other than those specifically disclosed in Part(b) of Schedule 5.13. All of the outstanding Equity Interests in the Company have been validly issued are fully paid and non-assessable and are owned by the Persons in the amounts specified on Part (c) of Schedule 5.13 free and clear of all Liens except those created under the Collateral Documents. Set forth on Part (d) of Schedule 5.13 is a complete and accurate list of all Loan Parties, showing as of the Closing Date (as to each Loan Party) the jurisdiction of its incorporation, the address of its principal place of business and its US taxpayer identification number or, in the case of any non-US Loan Party that does not have a US taxpayer identification number, its unique identification number issued to it by the jurisdiction of its incorporation. The copy of the charter of each Loan Party and each amendment thereto provided pursuant to Section 4.01(a)(vii) is a true and correct copy of each such document, each of which is valid and in full force and effect. No holder of Other AJI

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Equity Interests has the ability to affect the rights or remedies of the Secured Parties under the Loan Documents.

     5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act. (a) No Borrower is engaged or will engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock. Following the application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25% of the value of the assets (either of the applicable Borrower only or of the Company and its Subsidiaries on a consolidated basis) subject to the provisions of Section 7.01 or Section 7.05 or subject to any restriction contained in any agreement or instrument between any Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness and within the scope of Section 8.01(e) will be margin stock.

     (b) None of the Company, any Person Controlling the Company, or any Subsidiary (i) is a “holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,” within the meaning of the Public Utility Holding Company Act of 1935, or (ii) is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

     5.15 Disclosure. The Company has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries or any other Loan Party is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Company represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

     5.16 Compliance with Laws. Each Loan Party and each Subsidiary thereof is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

     5.17 Intellectual Property; Licenses, Etc. Each Loan Party and its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses and as of the

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Closing Date and each date on which applicable supplemental reports are required to be delivered pursuant to Section 6.02(i), Schedule 5.17 sets forth a complete and accurate list of all such IP Rights owned or used by each Loan Party and each of its Subsidiaries (other than ASI until ASI becomes a Loan Party). To the best knowledge of the Company, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Loan Party or any of its Subsidiaries infringes upon any rights held by any other Person. No claim or litigation regarding any of the foregoing is pending or, to the best knowledge of the Company, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

     5.18 Solvency. Each Loan Party is, individually and together with its Subsidiaries on a consolidated basis, Solvent.

     5.19 Casualty, Etc. Neither the businesses nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

     5.20 Labor Matters. There are no collective bargaining agreements or Multiemployer Plans covering the employees of the Company or any of its Subsidiaries as of the Closing Date and neither the Company nor any Subsidiary has suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last three years.

     5.21 Collateral Documents. The provisions of the Collateral Documents are effective to create in favor of the Administrative Agent for the benefit of the Secured Parties a legal, valid and enforceable first priority Lien (subject (other than with respect to Liens on Equity Interests of the Subsidiaries) to Liens permitted by Section 7.01) on all right, title and interest of the respective Loan Parties in the Collateral described therein. Except for filings completed prior to the Closing Date and as contemplated hereby and by the Collateral Documents and filings set forth on Schedule 5.21 that will be made by the date set forth in such Schedule, no filing or other action will be necessary to perfect or protect such Liens.

     5.22 Representations as to Foreign Obligors. Each of the Company and each Foreign Obligor represents and warrants to the Administrative Agent and the Lenders that:

     (a) Such Foreign Obligor is subject to civil and commercial Laws with respect to its obligations under this Agreement and the other Loan Documents to which it is a party (collectively as to such Foreign Obligor, the “Applicable Foreign Obligor Documents”), and the execution, delivery and performance by such Foreign Obligor of the Applicable Foreign Obligor Documents constitute and will constitute private and commercial acts and not public or governmental acts. Subject to applicable Debtor Relief Laws, neither such Foreign Obligor nor any of its property has any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of the jurisdiction in which such Foreign Obligor is organized and existing in respect of its obligations under the Applicable Foreign Obligor Documents.

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     (b) The Applicable Foreign Obligor Documents are in proper legal form under the Laws of the jurisdiction in which such Foreign Obligor is organized and existing for the enforcement thereof against such Foreign Obligor under the Laws of such jurisdiction, and to ensure the legality, validity, enforceability, priority or admissibility in evidence of the Applicable Foreign Obligor Documents, except as provided under applicable Debtor Relief Laws. It is not necessary to ensure the legality, validity, enforceability, priority or admissibility in evidence of the Applicable Foreign Obligor Documents that the Applicable Foreign Obligor Documents be filed, registered or recorded with, or executed or notarized before, any court or other authority in the jurisdiction in which such Foreign Obligor is organized and existing or that any registration charge or stamp or similar tax be paid on or in respect of the Applicable Foreign Obligor Documents or any other document, except for (i) any such filing, registration, recording, execution or notarization as has been made or is not required to be made until the Applicable Foreign Obligor Document or any other document is sought to be enforced and (ii) any charge or tax as has been timely paid.

     (c) There is no tax, levy, impost, duty, fee, assessment or other governmental charge, or any deduction or withholding, imposed by any Governmental Authority in or of the jurisdiction in which such Foreign Obligor is organized and existing either (i) on or by virtue of the execution or delivery of the Applicable Foreign Obligor Documents or (ii) on any payment to be made by such Foreign Obligor pursuant to the Applicable Foreign Obligor Documents, except as has been disclosed on Schedule 5.22.

     (d) The execution, delivery and performance of the Applicable Foreign Obligor Documents executed by such Foreign Obligor are, under applicable foreign exchange control regulations of the jurisdiction in which such Foreign Obligor is organized and existing, not subject to any notification or authorization except (i) such as have been made or obtained or (ii) such as cannot be made or obtained until a later date (provided that any notification or authorization described in clause (ii) shall be made or obtained as soon as is reasonably practicable).

     5.23 Issuance of Subordinated Debt; Status of Obligations as Senior Indebtedness, etc. The applicable Borrowers have the power and authority to incur the Subordinated Debt as provided for under the Sub Debt Documents applicable thereto and has duly authorized, executed and delivered the Sub Debt Documents applicable to such Subordinated Debt. The applicable Borrowers have issued, pursuant to due authorization, the Subordinated Debt under the applicable Sub Debt Documents, and such Sub Debt Documents constitute the legal, valid and binding obligations of such Borrowers enforceable against such Borrowers in accordance with their terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by principles of equity). The subordination provisions of the Subordinated Debt contained in the Sub Debt Documents are enforceable against the holders of the Subordinated Debt by the holder of any “Senior Indebtedness” or similar term referring to the Obligations (as defined in the Sub Debt Documents). All Obligations, including those to pay principal of and interest (including post-petition interest, whether or not allowed as a claim under bankruptcy or similar laws) on the Loans and reimbursement obligations, and fees and expenses in connection therewith, constitute “Senior Indebtedness” or similar term relating to the Obligations (as defined in the Sub Debt

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Documents) and all such Obligations are entitled to the benefits of the subordination created by the Sub Debt Documents. The Borrowers acknowledge that the Administrative Agent, each Lender and each L/C Issuer is entering into this Agreement and is extending its Commitments in reliance upon the subordination provisions of the Sub Debt Documents.

     5.24 Other Representations and Warranties. All representations and warranties made by each Borrower to the Acquisition Agreement and the Related Documents under the Acquisition Agreement or the Related Documents are, in each case, true and correct in all material respects as of the Closing Date (except to the extent any such representation and warranty is stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date) and no material default has occurred and is continuing under the Acquisition Agreement or the Related Documents.

ARTICLE VI
AFFIRMATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Company shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03) cause each Subsidiary to:

     6.01 Financial Statements. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

     (a) as soon as available, but in any event within 100 days after the end of each fiscal year of the Company (commencing with the fiscal year ended March 31, 2007), (i) a consolidated and consolidating balance sheet of the Company and its Subsidiaries as at the end of such fiscal year, and the related consolidated and consolidating statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be audited and accompanied by (A) a report and opinion of a Registered Public Accounting Firm of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and applicable Securities Laws and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit or with respect to the absence of any material misstatement and (B) an opinion of such Registered Public Accounting Firm independently assessing the Company’s internal controls over financial reporting in accordance with Item 308 of SEC Regulation S-K, PCAOB Auditing Standard No. 2, and Section 404 of Sarbanes-Oxley expressing a conclusion that contains no statement that there is a material weakness in such internal controls, except for such material weaknesses as to which the Required Lenders do not object, and such consolidating statements to be certified by the chief executive officer, chief financial officer, treasurer or controller of the Company to the effect that such statements are fairly stated in all material respects when considered in relation to the consolidated financial statements of the Company and its Subsidiaries and

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(ii) financial statements of AJI and ASI prepared in compliance with the Company Law (Law No. 86 of 2005, as amended) of Japan;

     (b) as soon as available, but in any event within 50 days after the end of each of the first three fiscal quarters of each fiscal year of the Company (commencing with the fiscal quarter ended June 30, 2006), a consolidated and consolidating balance sheet of the Company and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated and consolidating statements of income or operations, shareholders’ equity and cash flows for such fiscal quarter and for the portion of the Company’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, such consolidated statements to be certified by the chief executive officer, chief financial officer, treasurer or controller of the Company as fairly presenting the financial condition, results of operations, shareholders’ equity and cash flows of the Company and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes and such consolidating statements to be certified by the chief executive officer, chief financial officer, treasurer or controller of the Company to the effect that such statements are fairly stated in all material respects when considered in relation to the consolidated financial statements of the Company and its Subsidiaries; and

     (c) as soon as available, but in any event at least 75 days following the end of each fiscal year of the Company, an annual business plan and budget of the Company and its Subsidiaries on a consolidated basis, including forecasts prepared by management of the Company, in form satisfactory to the Administrative Agent and the Required Lenders, of consolidated balance sheets and statements of income or operations and cash flows of the Company and its Subsidiaries on a quarterly basis for the immediately following fiscal year.

As to any information contained in materials furnished pursuant to Section 6.02(d), the Company shall not be separately required to furnish such information under Section 6.01(a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Company to furnish the information and materials described in Sections 6.01(a) and (b) above at the times specified therein.

     6.02 Certificates; Other Information. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

     (a) concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of the Registered Public Accounting Firm certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Default or, if any such Default shall exist, stating the nature and status of such event;

     (b) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of the Company;

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     (c) promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of any Loan Party or any of its Subsidiaries, or any audit of any of them;

     (d) (i) promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Company, and copies of all annual, regular, periodic and special reports and registration statements which the Company may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any national securities exchange, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto and (ii) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), to the extent Form 10-K filings and/or Form 10-Q filings corresponding with the dates of such financial statement have not been made with the SEC prior to the delivery of such financial statements, drafts of such filings in form and substance reasonably satisfactory to the Administrative Agent;

     (e) promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party or of any of its Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;

     (f) promptly, and in any event within five Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-US jurisdiction) concerning any investigation or possible investigation or other formal inquiry by such agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof (including, without limitation, the notice information set forth on Schedule 6.02(f));

     (g) not later than five Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of all notices, requests and other documents (including amendments, waivers and other modifications) so received under or pursuant to the Acquisition Agreement or any instrument, indenture, loan or credit or similar agreement regarding or related to any breach or default by any party thereto or any other event that could reasonably be expected to result in a material impairment of the value of the interests or the rights of any Loan Party or otherwise have a Material Adverse Effect and, from time to time upon request by the Administrative Agent, such information and reports regarding the Acquisition Agreement and such instruments, indentures and loan and credit and similar agreements as the Administrative Agent may reasonably request;

     (h) promptly after the assertion or occurrence thereof, notice of any action or proceeding against or of any noncompliance by any Loan Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that could (i) reasonably be expected to have a Material Adverse Effect or (ii) cause any property described in the

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Mortgages to be subject to any material restrictions on ownership, occupancy, use or transferability under any Environmental Law;

     (i) as soon as available, but in any event within 45 days after the end of each fiscal quarter of the Company, (i) a report supplementing Schedule 5.07, including an identification of all Material Contracts, the parties to such Material Contracts, the dates such Material Contracts were entered into, the subject matter of such Material Contracts, the aggregate consideration payable to or by the parties thereto and any other information useful to determine the materiality of such Material Contract to the business, condition (financial or otherwise), operations, performance, properties or prospects of the Loan Party or Subsidiary party thereto; (ii) a report supplementing Schedules 5.08(c), 5.08(d)(i) and 5.08(d)(ii), including an identification of all owned and leased real property disposed of by the Company or any Subsidiary thereof during such fiscal year, a list and description (including the street address, county or other relevant jurisdiction, state, record owner, book value thereof and, in the case of leases of property, lessor, lessee, expiration date and annual rental cost thereof) of all real property acquired or leased during such fiscal year and a description of such other changes in the information included in such Schedules as may be necessary for such Schedules to be accurate and complete; (iii) a report supplementing Schedule 5.08(f), including an identification of the owner of such Material Personal Property, the book value of such Material Personal Property, the jurisdiction in which such Material Personal Property is registered and/or located and any other information that is necessary to obtain a perfected security interest in such Material Personal Property in each jurisdiction where it is registered and/or located; (iv) a report supplementing Schedule 5.08(g), including identifying the type of each applicable Account, the financial institution in which each such Account is maintained, the then average monthly balance of each such Account and which such Accounts are Excluded Accounts; (v) a report supplementing Schedule 5.17, setting forth (A) a list of registration numbers for all patents, trademarks, service marks, trade names and copyrights awarded to the Company or any Subsidiary thereof during such fiscal year and (B) a list of all patent applications, trademark applications, service mark applications, trade name applications and copyright applications submitted by the Company or any Subsidiary thereof during such fiscal year and the status of each such application; and (vi) a report supplementing Schedules 5.08(e) and 5.13 containing a description of all changes in the information included in such Schedules as may be necessary for such Schedules to be accurate and complete, each such report to be signed by a Responsible Officer of the Company and to be in a form reasonably satisfactory to the Administrative Agent;

     (j) promptly, such additional information regarding the business, financial, legal or corporate affairs of any Loan Party or any Subsidiary thereof, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.

     Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Company posts such documents, or provides a link thereto on the Company’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on

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which such documents are posted on the Company’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Company shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Company to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Company shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Company shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(b) to the Administrative Agent. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Company with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

     Each Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of such Borrower hereunder (collectively, the “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to any Borrower or its securities) (each, a “Public Lender”). Each Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrowers or their respective securities for purposes of United States Federal and state securities laws (provided that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

     6.03 Notices. Promptly notify the Administrative Agent and each Lender:

     (a) of the occurrence of (i) any Default or (ii) any matter that could reasonably be expected to result in a Default under Section 8.01(g);

     (b) of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) any dispute, litigation, investigation, proceeding or suspension between any Loan Party or any Subsidiary thereof and any Governmental

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Authority; or (ii) the commencement of, or any material development in, any litigation or proceeding affecting any Loan Party or any Subsidiary thereof, including pursuant to any applicable Environmental Laws;

     (c) of the occurrence of any ERISA Event or Foreign Plan Event;

     (d) of any material change in accounting policies or financial reporting practices by any Loan Party or any Subsidiary thereof;

     (e) of the determination by the Registered Public Accounting Firm providing the opinion required under Section 6.01(a)(ii) (in connection with its preparation of such opinion) or the Company’s determination at any time of the occurrence or existence of any Internal Control Event which could reasonably be expected to have a Material Adverse Effect; and

     (f) of any announcement by Moody’s or S&P of any downgrade or possible downgrade in the rating of the Subordinated Notes.

     Each notice pursuant to this Section 6.03 (other than Section 6.03(f)) shall be accompanied by a statement of a Responsible Officer of the Company setting forth details of the occurrence referred to therein and stating what action the Company has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

     6.04 Payment of Obligations. Pay and discharge as the same shall become due and payable, all its material obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien upon its property, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.

     6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its (i) legal existence and (ii) good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business (as determined by the Company in its sole discretion), except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

     6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and

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condition, ordinary wear and tear and obsolescence excepted; (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use reasonable care in the operation and maintenance of its facilities.

     6.07 Maintenance of Insurance. Maintain with financially sound and reputable insurance companies not Affiliates of the Company, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons and providing for not less than 30 days’ prior notice to the Administrative Agent of termination, lapse or cancellation of such insurance.

     6.08 Compliance with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

     6.09 Books and Records. (a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Company or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Company or such Subsidiary, as the case may be.

     6.10 Inspection Rights. Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Company; provided that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective `representatives or independent contractors) may do any of the foregoing at the expense of the Company at any time during normal business hours and without advance notice.

     6.11 Use of Proceeds. Use the proceeds of the Credit Extensions to finance the Acquisition and the costs and expenses reflected thereto and for general corporate purposes not in contravention of any Law or of any Loan Document.

     6.12 ASI as Loan Party and Equity Interests of ASI. Within 120 days of the Closing Date (a) cause ASI to become a Designated Borrower pursuant to Section 2.14, and cause ASI and its Subsidiaries to comply with Section 6.13 in all respects (as if ASI were a newly acquired Subsidiary of AJI) and (b) cause AJI to, and AJI agrees to, grant a security interest in all of its Equity Interests in ASI under security agreements in form and substance satisfactory to the Administrative Agent, deliver, or cause to be delivered, to the Administrative Agent all certificates representing Equity Interests of ASI owned by the Company and its Subsidiaries,

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accompanied by undated stock powers executed in blank, and otherwise comply with Section 6.13 with respect to such Equity Interests in all respects (as if ASI were a newly acquired Subsidiary of AJI).

     6.13 Covenant to Guarantee Obligations and Give Security. (a) Upon the formation or acquisition of any new direct or indirect Subsidiary (other than any CFC or a Subsidiary that is held directly or indirectly by a CFC) by any Loan Party, or upon the occurrence of an Asset Trigger Event with respect to any Subsidiary, at the Company’s expense:

     (i) within 10 Business Days after such formation, acquisition or Asset Trigger Event, cause such Subsidiary, and cause each direct and indirect parent of such Subsidiary (if it has not already done so), to duly execute and deliver to the Administrative Agent a guaranty or guaranty supplement, in form and substance satisfactory to the Administrative Agent, guaranteeing the other Loan Parties’ obligations under the Loan Documents,

     (ii) within 10 Business Days after such formation, acquisition or Asset Trigger Event, furnish to the Administrative Agent a description of the real and personal properties of such Subsidiary, in detail satisfactory to the Administrative Agent,

     (iii) within 15 Business Days after such formation, acquisition or Asset Trigger Event, cause such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to duly execute and deliver to the Administrative Agent deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement supplements and other security and pledge agreements, as specified by and in form and substance satisfactory to the Administrative Agent (including delivery of all Pledged Interests in and of such Subsidiary, and other instruments of the type specified in Section 4.01(a)(iii)), securing payment of all the Obligations of such Subsidiary or such parent, as the case may be, under the Loan Documents and constituting Liens on all such real and personal properties,

     (iv) within 30 days after such formation, acquisition or Asset Trigger Event, cause such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to take whatever action (including the recording of mortgages, the filing of Uniform Commercial Code or other financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on the properties purported to be subject to the deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement supplements and security and pledge agreements delivered pursuant to this Section 6.13, enforceable against all third parties in accordance with their terms,

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     (v) within 60 days after such formation, acquisition or Asset Trigger Event, deliver to the Administrative Agent, upon the request of the Administrative Agent in its reasonable discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties acceptable to the Administrative Agent as to the matters contained in clauses (i), (iii) and (iv) above, and as to such other matters as the Administrative Agent may reasonably request, and

     (vi) as promptly as practicable after such formation, acquisition or Asset Trigger Event, deliver, upon the request of the Administrative Agent in its reasonable discretion, to the Administrative Agent with respect to each parcel of real property owned or held by the entity that is the subject of such formation or acquisition title reports, surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance reasonably satisfactory to the Administrative Agent, provided that to the extent that any Loan Party or any of its Subsidiaries shall have otherwise received any of the foregoing items with respect to such real property, such items shall, promptly after the receipt thereof, be delivered to the Administrative Agent;

provided that (x) clauses (i) through (vi) above shall not apply to ASI or any of its Subsidiaries until the 120th day following the Closing Date, at which point such clauses shall apply to ASI and all of its Subsidiaries without regard to any time periods set forth in any such clause and (y) notwithstanding anything to the contrary contained in clause (x) above, clauses (i) and (iii) through (vi) shall not apply to any Subsidiary if such Subsidiary does not have assets in any country with an aggregate book value greater than $1,000,000 (when taken together with the aggregate book value of the assets of any Loan Party or any other Subsidiary in such country), unless and until such Subsidiary has assets in a country with an aggregate book value greater than or equal to $1,000,000 (when taken together with the aggregate book value of the assets of any Loan Party or any other Subsidiary in such country).

     (b) Upon the acquisition of any property by any US Loan Party, if such property, in the judgment of the Administrative Agent, shall not already be subject to a perfected first priority (subject to Liens permitted under Section 7.02) security interest in favor of the Administrative Agent for the benefit of the Secured Parties, then the Company shall, at the Company’s expense:

     (i) within 10 Business Days after such acquisition, furnish to the Administrative Agent a description of the property so acquired in detail satisfactory to the Administrative Agent,

     (ii) within 15 Business Days after such acquisition, cause the applicable Loan Party to duly execute and deliver to the Administrative Agent deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement supplements and other security and pledge agreements, as specified by and in form and substance satisfactory to the Administrative Agent, securing payment of all the Obligations of the applicable

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Loan Party under the Loan Documents and constituting Liens on all such properties,

     (iii) within 30 days after such acquisition, cause the applicable Loan Party to take whatever action (including the recording of mortgages, the filing of Uniform Commercial Code or other financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on such property, enforceable against all third parties,

     (iv) within 60 days after such acquisition, deliver to the Administrative Agent, upon the request of the Administrative Agent in its reasonable discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties acceptable to the Administrative Agent as to the matters contained in clauses (ii) and (iii) above and as to such other matters as the Administrative Agent may reasonably request, and

     (v) as promptly as practicable after any acquisition of a real property, deliver, upon the request of the Administrative Agent in its reasonable discretion, to the Administrative Agent with respect to such real property title reports, surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance satisfactory to the Administrative Agent, provided that to the extent that any Loan Party or any of its Subsidiaries shall have otherwise received any of the foregoing items with respect to such real property, such items shall, promptly after the receipt thereof, be delivered to the Administrative Agent.

     (c) Upon delivery of any report pursuant to Section 6.02(i) supplementing Schedules 5.07, 5.08(c), 5.08(d)(i), 5.08(d)(ii), 5.08(e), 5.08(f) and/or 5.17 with respect to Material Property of Foreign Obligors, if such Material Property, in the judgment of the Administrative Agent, shall not already be subject to a perfected first priority (subject to Liens permitted under Section 7.02) security interest in favor of the Administrative Agent for the benefit of the Secured Parties, then the Company shall, at the Company’s expense within 30 days after the date such reports were required to be delivered pursuant to Section 6.02(i),

     (i) cause the applicable Foreign Obligor to duly execute and deliver to the Administrative Agent deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement supplements and other security and pledge agreements, as specified by and in form and substance satisfactory to the Administrative Agent, securing payment of all the Obligations of the applicable Foreign Obligor under the Loan Documents and constituting Liens on all such properties,

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     (ii) cause the applicable Foreign Obligor to take whatever action (including the recording of mortgages, the filing of Uniform Commercial Code or other financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on such property, enforceable against all third parties,

     (iii) deliver to the Administrative Agent, upon the request of the Administrative Agent in its reasonable discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Foreign Obligors acceptable to the Administrative Agent as to the matters contained in clauses (ii) and (iii) above and as to such other matters as the Administrative Agent may reasonably request, and

     (iv) deliver, upon the request of the Administrative Agent in its reasonable discretion, to the Administrative Agent with respect to title reports, surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance satisfactory to the Administrative Agent, provided that to the extent that any Foreign Obligor or any of its Subsidiaries shall have otherwise received any of the foregoing items, such items shall, promptly after the receipt thereof, be delivered to the Administrative Agent;

provided that (x) clauses (i) through (iv) above shall not apply to ASI or any of its Subsidiaries until the 120th day following the Closing Date and (y) notwithstanding anything to the contrary contained in clause (x) above, clauses (ii) through (iv) shall not apply to any Subsidiary if such Subsidiary does not have assets in any country with an aggregate book value greater than $1,000,000 (when taken together with the aggregate book value of the assets of any Loan Party or any other Subsidiary in such country), unless and until such Subsidiary has assets in a country with an aggregate book value greater than or equal to $1,000,000 (when taken together with the aggregate book value of the assets of any Loan Party or any other Subsidiary in such country).

     (d) Upon the request of the Administrative Agent following the occurrence and during the continuance of a Default, the Company shall, at the Company’s expense:

     (i) within 10 days after such request, furnish to the Administrative Agent a description of the real and personal properties of the Loan Parties and their respective Subsidiaries in detail satisfactory to the Administrative Agent,

     (ii) within 15 days after such request, duly execute and deliver, and cause each Subsidiary (other than any CFC or a Subsidiary that is held directly or indirectly by a CFC) of the Company (if it has not already done so) to duly execute and deliver, to the Administrative Agent deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement supplements and other security and pledge agreements, as specified by and in form and substance satisfactory to the Administrative Agent (including

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delivery of all Pledged Equity and Pledged Debt in and of such Subsidiary, and other instruments of the type specified in Section 4.01(a)(iii)), securing payment of all the Obligations of such Subsidiary under the Loan Documents and constituting Liens on all such properties,

     (iii) within 30 days after such request, take, and cause each Loan Party and each other Subsidiary (other than any CFC or a Subsidiary that is held directly or indirectly by a CFC) of the Company to take, whatever action (including the recording of mortgages, the filing of Uniform Commercial Code or other financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on the properties purported to be subject to the deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement Supplements, IP Security Agreement Supplements and security and pledge agreements delivered pursuant to this Section 6.13, enforceable against all third parties in accordance with their terms,

     (iv) within 60 days after such request, deliver to the Administrative Agent, upon the request of the Administrative Agent in its sole discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties acceptable to the Administrative Agent as to the matters contained in clauses (ii) and (iii) above, and as to such other matters as the Administrative Agent may reasonably request, and

     (v) as promptly as practicable after such request, deliver, upon the request of the Administrative Agent in its sole discretion, to the Administrative Agent with respect to each parcel of real property owned or held by the Company and its Subsidiaries, title reports, surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance satisfactory to the Administrative Agent, provided that to the extent that any Loan Party or any of its Subsidiaries shall have otherwise received any of the foregoing items with respect to such real property, such items shall, promptly after the receipt thereof, be delivered to the Administrative Agent.

     (e) At any time upon request of the Administrative Agent, promptly execute and deliver any and all further instruments and documents and take all such other action as the Administrative Agent reasonably determines necessary in obtaining the full benefits of, or (as applicable) in perfecting and preserving the Liens of, such guaranties, deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement supplements and other security and pledge agreements.

     6.14 Compliance with Environmental Laws. Comply, and cause all lessees and other Persons operating or occupying its properties to comply, in all material respects, with all

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applicable Environmental Laws and Environmental Permits; obtain and renew all Environmental Permits necessary for its operations and properties; and conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws; provided that neither the Company nor any of its Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

     6.15 Preparation of Environmental Reports. At the request of the Required Lenders from time to time (but not more than once in any calendar year), provide to the Lenders within 60 days after such request, at the expense of the Company, an environmental site assessment report for any of its properties described in such request, prepared by an environmental consulting firm acceptable to the Administrative Agent, indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance, removal or remedial action in connection with any Hazardous Materials on such properties; without limiting the generality of the foregoing, if the Company fails to provide a report satisfactory in form and substance to the Administrative Agent within the time referred to above, the Administrative Agent may retain an environmental consulting firm to prepare such report at the expense of the Company, and the Company hereby grants and agrees to cause any Subsidiary that owns any property described in such request to grant at the time of such request to the Administrative Agent, the Lenders, such firm and any agents or representatives thereof an irrevocable non-exclusive license, subject to the rights of tenants, to enter onto their respective properties to undertake such an assessment.

     6.16 Further Assurances. Promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts (including obtaining appraisals on real estate owned by AJI on behalf of the Administrative Agent), deeds, certificates, assurances and other instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably require from time to time in order to (i) effectuate the purposes of the Loan Documents, (ii) to the fullest extent permitted by applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so. Without limiting any other provision in this Agreement or any other Loan Document, upon the request of the Administrative Agent and, in any event, at least within 45 days after the end of each fiscal quarter of the Company, to the extent (i) the attachment of any Lien on any Collateral to secure the Obligations in full (or in part) or the perfection of such Lien requires the listing of each Secured Party in the filing system, registration system or otherwise relevant to such Lien (collectively, the “Filing System”) and (ii) the then

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existing listing of Secured Parties in the Filing System relevant to such Lien does not accurately reflect the then existing Secured Parties, the Company shall update each such listing of the Secured Parties to reflect the then current Secured Parties and, subsequently, perform a search in each relevant Filing System. In addition, the Company shall certify to the Administrative Agent that, either (1) each applicable Filing System accurately reflects the then existing Secured Parties or (2) (x) the then existing listing of Secured Parties in certain Filing Systems does not accurately reflect the then existing Secured Parties and detailing the steps taken to revise such listing to accurately reflect the then existing Secured Parties (attaching evidence thereof in form and substance satisfactory to the Administration Agent that such steps have been taken) and (y) the existing listing of Secured Parties in the remaining Filing Systems accurately reflect the then existing Secured Parties.

     6.17 Compliance with Terms of Leaseholds. Make all payments and otherwise perform in all material respects all obligations in respect of all leases of real property to which the Company or any of its Subsidiaries is a party and which are material to the Company’s or such Subsidiary’s business or operations, keep such leases in full force and effect and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled (unless consistent with the business plans delivered pursuant to Section 6.01(c)), notify the Administrative Agent of any material default by any party with respect to such leases and cooperate with the Administrative Agent in all respects to cure any such default, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect.

     6.18 Foreign Government Scheme or Arrangement; Foreign Plan.

     (a) Ensure that any employer and employee contributions required by Law or by the terms of any Foreign Government Scheme or Arrangement or any Foreign Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices.

     (b) Ensure that the fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations, as of the date hereof, with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with applicable generally accepted accounting principles, other than with respect to the Japanese Borrowers to the extent that non-compliance with this clause (b) by the Japanese Borrowers (x) does not violate any applicable law or regulation or subject the Japanese Borrowers to any material fines or Liens against their respective property and (y) otherwise could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

     (c) Ensure that each Foreign Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities.

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     6.19 Lien Searches. Promptly following receipt of the acknowledgment copy of any financing statements filed under the Uniform Commercial Code in any jurisdiction by or on behalf of the Secured Parties, deliver to the Administrative Agent completed requests for information listing such financing statement and all other effective financing statements filed in such jurisdiction that name any Loan Party as debtor, together with copies of such other financing statements.

     6.20 Material Contracts. Perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each Material Contract in full force and effect, enforce each Material Contract in accordance with its terms, take all such action to such end as may be from time to time requested by the Administrative Agent and, upon request of the Administrative Agent, make to each other party to each Material Contract such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

     6.21 Designation as Senior Debt. Designate all Obligations as “Designated Senior Indebtedness” under, and defined in, the Subordinated Notes Documents and all supplemental indentures thereto, and the Company hereby makes such designation.

     6.22 Security Interests in Accounts, Etc. Subject to Section 6.26, maintain each Account of the Company and its Subsidiaries (other than Excluded Accounts) at Bank of America, an Affiliate of Bank of America or another commercial bank which is satisfactory to the Administrative Agent, and cause each such Account to be subject to a first priority security interest in favor of the Administrative Agent (or its designee) for the benefit of the Secured Parties in a manner satisfactory to the Administrative Agent (which, with respect to Accounts held in the US, shall be accomplished by means of a valid Control Agreement); provided that to the extent a first priority security interest cannot be granted in Accounts maintained in Japan and Taiwan, such Accounts are not required to be subject to a first priority security interest, but must be maintained with Bank of America or an Affiliate thereof and subject to a security arrangement satisfactory to the Administrative Agent. Without limiting the generality of the foregoing, each Japanese Subsidiary shall, on a quarterly basis, provide notice to the financial institution which holds its Accounts (other than Excluded Accounts) and take all other actions necessary to maintain a first priority perfected security interest in such Account to the extent that such security interests can be perfected by taking such action.

     6.23 Approvals and Authorizations. Maintain all authorizations, consents, approvals and licenses from, exemptions of, and filings and registrations with, each Governmental Authority of the jurisdiction in which each Foreign Obligor is organized and existing, and all approvals and consents of each other Person in such jurisdiction, in each case that are required in connection with the Loan Documents, except, in any case, where the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

     6.24 Taxpayer Identification Number. Within 30 days after the Closing Date, each (a) US Loan Party which does not have, as of the Closing Date, a U.S. taxpayer identification

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number and (b) non-US Loan Party which does not have, as of the Closing Date, a unique identification number issued to it by the jurisdiction of its corporation, shall have, in each case, taken all necessary action and executed all documents and instruments and made all necessary filings as may be required by applicable Governmental Authority, to obtain such U.S. taxpayer (or other applicable) identification number, and shall thereafter (i) take all such further steps as may be required to obtain such identification number as soon as reasonably practicable and (ii) provide such identification number to the Administrative Agent in writing promptly after the receipt thereof.

     6.25 Lost AJI Stock Certificates. Within twelve months after the Closing Date, the Company shall deliver, or cause to be delivered, to the Administrative Agent the Lost AJI Stock Certificates, accompanied by undated stock powers executed in blank.

     6.26 Post Closing Deliverables.

     (a) Within 5 days, deliver to the Administrative Agent all Equity Interests of AJI other than the Lost AJI Stock Certificates and the stock certificates evidencing the Other AJI Equity Interests, accompanied by undated stock powers executed in blank.

     (b) Within 5 days, deliver to Japanese counsel to the Administrative Agent fully executed documents to be filed in connection with the Japanese Collateral Documents, in form and substance satisfactory to such counsel.

     (c) Within 5 days, deliver to the Administrative Agent (i) all intercompany notes required to be delivered by the Company pursuant to Section 4.14 of the US Security Agreement and (ii) a fully executed amendment to the outsourcing agreement with Solectron Corporation, in form and substance satisfactory to the Administrative Agent.

     (d) Within 45 days, to the extent not already done, cause all Accounts of the Company and its Subsidiaries to satisfy the requirements Section 6.22.

     (e) Within 60 days, grant a security interest under Taiwanese law in all Equity Interests in Asyst Tech Taiwan Ltd. (“ATTL”) under a security agreement, in form and substance satisfactory to the Administrative Agent, deliver, or cause to be delivered, to the Administrative Agent all certificates representing such Equity Interests, accompanied by undated stock powers executed in blank, and otherwise comply with Section 6.13 with respect to such Equity Interests in all respects (as if ATTI were a newly acquired Subsidiary of the Company).

ARTICLE VII
NEGATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Company shall not, nor shall it permit any Subsidiary to, directly or indirectly:

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     7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, or sign or file or suffer to exist under the Uniform Commercial Code of any jurisdiction a financing statement that names the Company or any of its Subsidiaries as debtor, or assign any accounts or other right to receive income, or permit any provisions to exist in any Contractual Obligation with respect to the Company, any Subsidiary or any real or personal property of the foregoing that provides for a Lien to be granted at a later date or upon the occurrence of an event, other than the following:

     (a) Liens pursuant to any Loan Document;

     (b) Liens existing on the date hereof and listed on Schedule 5.08(b) and any renewals or extensions thereof; provided that (i) the property covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased except as contemplated by Section 7.02(d), (iii) the direct or any contingent obligor with respect thereto is not changed, (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.02(d) and (v) in no event shall the amount secured or benefited thereby exceed $2,000,000 with respect to Liens on property of AJI;

     (c) Liens for taxes, fees, assessments or other governmental charges not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

     (d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

     (e) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by applicable Law, including ERISA or any Foreign Government Scheme or Arrangement;

     (f) deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

     (g) easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

     (h) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h);

     (i) Liens securing Indebtedness permitted under Section 7.02(f); provided that (i) such Liens do not at any time encumber any property other than the property

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financed by such Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition;

     (j) leases, subleases, licenses and sublicenses granted to others in the ordinary course of business not interfering in any material respect with the value of the property to which such Lien is attached or the conduct of business of the Company or any of its Subsidiaries, as applicable, and any interest or title of a lessor, sublessor, licensor or sublicensor or under any lease, sublease, license or sublicense;

     (k) zoning or similar laws or rights reserved to or vested in any Governmental Authority to control or regulate the use of any real property owned by the Company or any of its Subsidiaries;

     (l) Liens on or transfers of accounts receivable and contracts and instruments related thereto arising solely in connection with the sale of such accounts receivable pursuant to Section 7.05(f); and

     (m) other Liens affecting property with an aggregate fair value not to exceed $5,000,000; provided that no such Lien shall extend to or cover any Collateral.

     7.02 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

     (a) obligations (contingent or otherwise) existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with fluctuations in interest rates or foreign exchange rates and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party; provided that the aggregate Swap Termination Value of Secured Hedge Agreements shall not exceed $50,000,000 at any time outstanding;

     (b) Indebtedness of a Subsidiary Guarantor or ASI owed to the Company, a Subsidiary Guarantor or ASI, which Indebtedness shall (i) be pledged under the applicable Security Agreement, (ii) be on terms (including subordination terms) acceptable to the Administrative Agent and (iii) be otherwise permitted under the provisions of Section 7.03;

     (c) Indebtedness under the Loan Documents;

     (d) Indebtedness outstanding on the date hereof and listed on Schedule 7.02, and any Refinancings thereof (collectively, “Continuing Debt”); provided that, with respect to any such Indebtedness described in this clause (d) of AJI and its Subsidiaries and ASI and its Subsidiaries, (x) commitments relating to such Indebtedness shall be limited to an aggregate principal amount not to exceed $50,000,000, (y) no more than an aggregate principal amount of $25,000,000 at any time outstanding may be Funded Indebtedness and (z) all such Indebtedness shall be unsecured (other than as permitted in Section 7.01(b));

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     (e) unsecured Guarantees of the Company or any Subsidiary Guarantor in respect of Indebtedness otherwise permitted hereunder of the Company, any other Subsidiary Guarantor or ASI, but, if the obligations being Guaranteed are subordinated to the Obligations, only if such Guarantees are subordinated to the Obligations on substantially the same terms;

     (f) Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets within the limitations set forth in Section 7.01(i); provided that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $5,000,000;

     (g) Indebtedness of any Person that becomes a Subsidiary of the Company after the date hereof in accordance with the terms of Section 7.03(i), which Indebtedness is existing at the time such Person becomes a Subsidiary of the Company (other than Indebtedness incurred solely in contemplation of such Person’s becoming a Subsidiary of the Company), in an aggregate principal amount not to exceed $5,000,000, and Refinancings of such Indebtedness;

     (h) Indebtedness incurred pursuant to Section 7.18, to the extent permitted thereunder;

     (i) unsecured Subordinated Debt (other than the Subordinated Notes) of the Borrowers incurred pursuant to the terms of the Sub Debt Documents, and Refinancings of such Subordinated Debt which continue to satisfy the terms of the definition of “Subordinated Debt”; provided that before and after giving effect to the incurrence of such Subordinated Debt or Refinancing thereof (x) no Default shall exist, (y) the Company shall be in pro forma compliance with Section 7.2.11 and (z) the aggregate principal amount of Subordinated Debt at any time outstanding under this clause (i) and clause (j) below shall not exceed $150,000,000;

     (j) unsecured Indebtedness incurred pursuant to the Subordinated Notes Documents, and Refinancings of such Subordinated Debt which continue to satisfy the terms of the definition of “Subordinated Debt”; provided that before and after giving effect to such Refinancing (x) no Default shall exist, (y) the Company shall be in pro forma compliance with Section 7.2.11 and (z) the aggregate principal amount of Subordinated Debt at any time outstanding under this clause (j) and clause (i) above shall not exceed $150,000,000; and

     (k) so long as no Default has occurred and is continuing, unsecured Indebtedness of the Company and its Subsidiaries in an aggregate principal amount not to exceed $10,000,000 at any time outstanding.

     7.03 Investments. Make or hold any Investments, except:

     (a) Investments held by the Company and its Subsidiaries in the form of Cash Equivalents;

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     (b) Investments consisting of advances to officers, directors and employees of the Company and its Subsidiaries in an aggregate amount not to exceed $1,000,000 at any time outstanding, for travel, entertainment, relocation and analogous ordinary business purposes;

     (c) (i) Investments by the Company and its Subsidiaries in their respective Subsidiaries outstanding on the date hereof, (ii) additional Investments by the Company and its Subsidiaries in Loan Parties, (iii) additional Investments by Subsidiaries of the Company that are not Loan Parties in other Subsidiaries that are not Loan Parties and (iv) so long as no Default has occurred and is continuing or would result from such Investment, additional Investments by the Loan Parties in wholly-owned Subsidiaries that are not Loan Parties in an aggregate amount invested from the date hereof not to exceed $5,000,000;

     (d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

     (e) Guarantees permitted by Section 7.02;

     (f) Investments existing on the date hereof (other than those referred to in Section 7.03(c)(i)) and set forth on Schedule 5.08(e);

     (g) Investments in Swap Contracts permitted under Section 7.02(a);

     (h) the purchase or other acquisition of all of the Equity Interests in, or all or substantially all of the property of, any Person that, upon the consummation thereof, will be wholly-owned directly by the Company or one or more of its wholly-owned Subsidiaries (including as a result of a merger or consolidation); provided that, with respect to each purchase or other acquisition made pursuant to this Section 7.03(h):

     (i) any such newly-created or acquired Subsidiary shall comply with the requirements of Section 6.13;

     (ii) the lines of business of the Person to be (or the property of which is to be) so purchased or otherwise acquired shall be substantially the same lines of business as one or more of the principal businesses of the Company and its Subsidiaries in the ordinary course;

     (iii) such purchase or other acquisition shall not include or result in any contingent liabilities that could reasonably be expected to be material to the business, financial condition, operations or prospects of the Company and its Subsidiaries, taken as a whole (as determined in good faith by the board of directors (or the persons performing similar functions) of the Company or such Subsidiary if the board of directors is otherwise approving such transaction and, in each other case, by a Responsible Officer);

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     (iv) the total cash and noncash consideration (including the fair market value of all Equity Interests issued or transferred to the sellers thereof, all indemnities, earnouts and other contingent payment obligations to, and the aggregate amounts paid or to be paid under noncompete, consulting and other affiliated agreements with, the sellers thereof, all write-downs of property and reserves for liabilities with respect thereto and all assumptions of debt, liabilities and other obligations in connection therewith) paid by or on behalf of the Company and its Subsidiaries for any such purchase or other acquisition, when aggregated with the total cash and noncash consideration paid by or on behalf of the Company and its Subsidiaries for all other purchases and other acquisitions made by the Company and its Subsidiaries pursuant to this Section 7.03(h), shall not exceed $15,000,000;

     (v) (A) immediately before and immediately after giving pro forma effect to any such purchase or other acquisition, no Default shall have occurred and be continuing and (B) immediately after giving effect to such purchase or other acquisition, the Company and its Subsidiaries shall be in pro forma compliance with all of the covenants set forth in Section 7.11, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such purchase or other acquisition had been consummated as of the first day of the fiscal period covered thereby; and

     (vi) the Company shall have delivered to the Administrative Agent and each Lender, at least five Business Days prior to the date on which any such purchase or other acquisition is to be consummated, a certificate of a Responsible Officer, in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders, certifying that all of the requirements set forth in this clause (vi) have been satisfied or will be satisfied on or prior to the consummation of such purchase or other acquisition;

     (i) Investments by the Company and its Subsidiaries not otherwise permitted under this Section 7.03 in an aggregate amount not to exceed $10,000,000 over the term of this Agreement; provided that, with respect to each Investment made pursuant to this Section 7.03(i):

     (i) such Investment shall not include or result in any contingent liabilities that could reasonably be expected to be material to the business, financial condition, operations or prospects of the Company and its Subsidiaries, taken as a whole (as determined in good faith by the board of directors (or persons performing similar functions) of the Company or such Subsidiary if the board of directors is otherwise approving such transaction and, in each other case, by a Responsible Officer);

     (ii) such Investment shall be in property that is part of, or in lines of business that are, substantially the same lines of business as one or more of the principal businesses of the Company and its Subsidiaries in the ordinary course;

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     (iii) any determination of the amount of such Investment shall include all cash and noncash consideration (including the fair market value of all Equity Interests issued or transferred to the sellers thereof, all indemnities, earnouts and other contingent payment obligations to, and the aggregate amounts paid or to be paid under noncompete, consulting and other affiliated agreements with, the sellers thereof, all write-downs of property and reserves for liabilities with respect thereto and all assumptions of debt, liabilities and other obligations in connection therewith) paid by or on behalf of the Company and its Subsidiaries in connection with such Investment; and

     (iv) (A) immediately before and immediately after giving pro forma effect to any such purchase or other acquisition, no Default shall have occurred and be continuing and (B) immediately after giving effect to such purchase or other acquisition, the Company and its Subsidiaries shall be in pro forma compliance with all of the covenants set forth in Section 7.11, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such Investment had been consummated as of the first day of the fiscal period covered thereby;

     (j) the Acquisition and, following the Closing Date, the acquisition of 4.9% of the Equity Interests of ASI in accordance with the Acquisition Agreement;

     (k) repurchases of stock from former officers, directors or employees of the Company and its Subsidiaries under the terms of applicable repurchase agreements in an aggregate amount not to exceed $1,000,000 in any fiscal year, provided that no Event of Default has occurred, is continuing or would exist after giving effect to the repurchases; and

     (l) other Investments not exceeding $5,000,000 in the aggregate in any fiscal year of the Company.

     7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or a substantial portion of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:

     (a) any Subsidiary may merge with (i) the Company, provided that the Company shall be the continuing or surviving Person, or (ii) any one or more other Subsidiaries; provided that when any Subsidiary Guarantor (or ASI) is merging with another Subsidiary, a Subsidiary Guarantor (or ASI) shall be the continuing or surviving Person; provided further that when any US Subsidiary Guarantor is merging with another Subsidiary, the continuing and surviving Person shall be a US Subsidiary Guarantor; and

     (b) any Subsidiary may Dispose of all or a substantial portion of its assets (upon voluntary liquidation or otherwise) to the Company or to another Subsidiary; provided that if the transferor in such a transaction is a Subsidiary Guarantor (or ASI),

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then the transferee must either be the Company or a Subsidiary Guarantor; provided further that if the transferor in such a transaction is a US Subsidiary Guarantor, then the transferee must either be the Company or a US Subsidiary Guarantor;

     (c) any Subsidiary (other than ASI) that is not a Loan Party may dispose of all or substantially all its assets (including any Disposition that is in the nature of a liquidation) to (i) another Subsidiary that is not a Loan Party or (ii) to a Loan Party;

     (d) in connection with any acquisition permitted under Section 7.03, any Subsidiary of the Company may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided that (i) the Person surviving such merger shall be a wholly-owned Subsidiary of the Company and (ii) in the case of any such merger to which any Loan Party (other than the Company) or ASI is a party, such Loan Party or ASI, as applicable, is the surviving Person; and

     (e) so long as no Default has occurred and is continuing or would result therefrom, any Subsidiary of the Company may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided that in each case, immediately after giving effect thereto in the case of any such merger to which any Loan Party (other than the Company) or ASI is a party, such Loan Party or ASI, as applicable, is the surviving corporation.

     7.05 Dispositions. Make any Disposition or enter into any agreement to make any Disposition, except:

     (a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

     (b) Dispositions of inventory in the ordinary course of business;

     (c) Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

     (d) Subject to Section 7.04(b), Dispositions of property by any Subsidiary to the Company or to a wholly-owned Subsidiary; provided that if the transferor of such property is a Subsidiary Guarantor or ASI (or, in each case, Equity Interests therein), the transferee thereof must either be the Company or a Subsidiary Guarantor;

     (e) Dispositions permitted by Section 7.04;

     (f) Dispositions of accounts (as such term is defined in Section 9-102 of the UCC) in the ordinary course of business (including any factoring arrangements), and other Dispositions of accounts for collection;

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     (g) Dispositions by the Company and its Subsidiaries of property pursuant to sale-leaseback transactions, provided that the aggregate book value of all property so Disposed of shall not exceed $10,000,000 from and after the Closing Date; and

     (h) Dispositions (other than of a Subsidiary Guarantor or ASI (or, in each case, Equity Interests therein)) by the Company and its Subsidiaries not otherwise permitted under this Section 7.05; provided that (i) at the time of such Disposition, no Default shall exist or would result from such Disposition, (ii) the aggregate book value of all property Disposed of in reliance on this clause (g) in any fiscal year shall not exceed $10,000,000 and (iii) the purchase price for such asset shall be paid to the Company or such Subsidiary solely in cash.

provided that any Disposition pursuant to Section 7.05(a) through Section 7.05 (g) shall be for the fair market value of such asset.

     7.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, or issue or sell any Equity Interests or accept any capital contributions, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:

     (a) each Subsidiary may make Restricted Payments to the Company, the Subsidiary Guarantors and any other Person (other than Shinko (except to the extent provided in clause (d) below)) that owns a direct Equity Interest in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made;

     (b) the Company and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;

     (c) the Company and each Subsidiary may purchase, redeem or otherwise acquire its common Equity Interests with the proceeds received from the substantially concurrent issue of new common Equity Interests; and

     (d) the Company, AJI and ASI may make Restricted Payments to Shinko to the extent required under the Acquisition Agreement (as in effect on the Closing Date, unless any subsequent modifications thereto reduce the amount of Restricted Payments and are otherwise permitted under Section 7.16).

     7.07 Change in Nature of Business. Engage in any material line of business substantially different from those lines of business conducted by the Company and its Subsidiaries on the date hereof or any business substantially related or incidental thereto.

     7.08 Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the Company, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Company or such Subsidiary as would be obtainable by the Company or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate; provided that the foregoing restriction shall not

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apply to transactions between or among the Company and any Subsidiary Guarantor or between and among any Subsidiary Guarantors.

     7.09 Burdensome Agreements. Enter into or permit to exist any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to the Company or any Subsidiary Guarantor or to otherwise transfer property to or invest in the Company or any Subsidiary Guarantor, except for any agreement in effect at the time any Subsidiary becomes a Subsidiary of the Company, so long as such agreement was not entered into solely in contemplation of such Person becoming a Subsidiary of the Company, (ii) of any Subsidiary to Guarantee the Indebtedness of the Company or (iii) of the Company or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person; or (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person.

     7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

     7.11 Financial Covenants.

     (a) Consolidated Total Leverage Ratio. Permit the Consolidated Total Leverage Ratio at any time during any period of four fiscal quarters of the Company to be greater than 3.50:1.

     (b) Consolidated Senior Leverage Ratio. Permit the Consolidated Senior Leverage Ratio at any time during any period of four fiscal quarters of the Company set forth below to be greater than the ratio set forth below opposite such period:

	Maximum
	Consolidated
	Senior Leverage
Four Fiscal Quarters Ending	Ratio
Closing Date through December 30, 2006		2.25:1
December 31, 2006 and each fiscal quarter thereafter		2.00:1

     (c) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed Charge Coverage Ratio as of the end of any fiscal quarter of the Company to be less than the ratio set forth below opposite such fiscal quarter:

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	Minimum
	Consolidated
	Fixed Charge
Four Fiscal Quarters Ending	Coverage Ratio
Closing Date through December 30, 2006		2.00:1
December 31, 2006 and each fiscal quarter thereafter		2.50:1

     7.12 Capital Expenditures. Make or become legally obligated to make any Capital Expenditure, except for Capital Expenditures in the ordinary course of business not exceeding, in the aggregate for the Company and it Subsidiaries during each fiscal year set forth below, the amount set forth opposite such fiscal year:

Fiscal Year	Amount
2007	$	15,000,000
2008	$	10,000,000
2009	$	10,000,000

     7.13 Amendments of Organization Documents. Amend any of its Organization Documents in a manner materially adverse to the rights or remedies of the Secured Parties under the Loan Documents.

     7.14 Accounting Changes. Make any change in (a) accounting policies or reporting practices, except as required by GAAP, or (b) fiscal year.

     7.15 Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination terms of, any Indebtedness, except (a) the prepayment of the Credit Extensions in accordance with the terms of this Agreement and (b) regularly scheduled or required repayments or redemptions or other payments of Indebtedness set forth in Schedule 7.02 and refinancings and refundings of such Indebtedness in compliance with Section 7.02(d).

     7.16 Amendment, Etc. of Acquisition Agreement, Related Documents and Debt Documents. (a) Cancel or terminate the Acquisition Agreement or any Related Document or consent to or accept any cancellation or termination thereof if such cancellation or termination would materially impair the rights or interests of the any Loan Party or the rights or interest of any Secured Party, (b) amend, modify or change in any manner any term or condition of the Acquisition Agreement or any Related Document or give any consent, waiver or approval thereunder that would materially impair the rights or interests of any Loan Party or the rights or interests of any Secured Party, (c) waive any default under or any breach of any term or condition of the Acquisition Agreement or any Related Document, (d) take any other action in connection with the Acquisition Agreement or any Related Document that would materially impair the value of the interest or rights of any Loan Party thereunder or that would impair the rights or interests of the Administrative Agent or any Lender, (e) amend, modify or change in

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any manner any material term or condition of any Indebtedness set forth in Schedule 7.02, except for (i) any Refinancings thereof permitted by Section 7.02 and (ii) any amendment, supplement, waiver or modification for which no fee is payable to the holders of such Indebtedness and which (A) extends the date or reduces the amount of any required repayment, prepayment or redemption of the principal of such Indebtedness, (B) reduces the rate or extends the date for payment of the interest, premium (if any) or fees payable on such Indebtedness or (C) makes the covenants, events of default or remedies in Contractual Obligations governing such Indebtedness less restrictive on the applicable Loan Parties or applicable Subsidiaries.

     7.17 Designation of Senior Debt. Designate any Indebtedness (other than the Indebtedness under the Loan Documents) of the Company or any of its Subsidiaries as “Designated Senior Debt” (or any similar term) under, and as defined in, the Subordinated Notes Documents, or any other significant subordinated debt.

     7.18 Lease Obligations. Create, incur, assume or suffer to exist any obligations as lessee (a) for the rental or hire of real or personal property in connection with any sale and leaseback transaction, or (b) for the rental or hire of other real or personal property of any kind under leases or agreements to lease (including Capitalized Leases) having an original term of one year or more that would cause the direct and contingent liabilities of the Company and its Subsidiaries, on a consolidated basis, in respect of all such obligations to exceed $10,000,000 payable in any period of 12 consecutive months.

ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES

     8.01 Events of Default. Any of the following shall constitute an Event of Default:

     (a) Non-Payment. Any Borrower or any other Loan Party fails to (i) pay when and as required to be paid herein, and in the currency required hereunder, any amount of principal of any Loan or any L/C Obligation or deposit any funds as Cash Collateral in respect of L/C Obligations, or (ii) pay within three days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) pay within five days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

     (b) Specific Covenants. (i) The Company fails to perform or observe any term, covenant or agreement contained in any of Section 6.01, 6.02, 6.10, 6.11, 6.12, 6.13, 6.18, 6.22, 6.25, 6.26 or Article VII, or (ii) any Subsidiary Guarantor fails to perform or observe any term, covenant or agreement contained in Article IV of the US Subsidiary Guaranty, or any corresponding provision in any other Guaranty (with respect to the covenants set forth in Article VII, as such covenants apply to each Subsidiary Guarantor) or (iii) any of the Loan Parties fails to perform or observe any term, covenant or agreement contained in Section 4.14 of the US Security Agreement or any corresponding provision contained in any other Collateral Document to which it is a party; or

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     (c) Other Defaults. (i) The Company fails to perform or observe any term, covenant or agreement contained in any of Section 6.03 or 6.05(a)(ii), (b) or (c) and such failure continues for 3 Business Days or (ii) any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or (b) or Section 8.01(c)(i) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days; or

     (d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Company or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading when made or deemed made; or

     (e) Cross-Default. (i) The Company or any Subsidiary thereof (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Company or any Subsidiary thereof is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Company or any Subsidiary thereof is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Company or such Subsidiary as a result thereof is greater than the Threshold Amount; or

     (f) Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary thereof institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the

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consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

     (g) Inability to Pay Debts; Attachment. (i) The Company or any Subsidiary thereof becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, (ii) in respect of the Company or any Subsidiary thereof (excluding a Japanese Subsidiary thereof), any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy, (iii) in respect of any Japanese Subsidiary of the Company, any order or notice of provisional attachment (“karishobun”), provisional attachment (“karisashiosae”) for the purpose of assuring collection of taxes or public imposts, post-judgment attachment (“sashiosae”) or other court order of enforcement issued with respect to any of its rights under agreement or attachment with respect to any deposits or other credits of such Japanese Subsidiary with any bank and/or any financial institution is dispatched, or (iv) any clearing house in the observance of its rules takes procedures for suspension of any Japanese Subsidiary’s transactions with banks and similar institutions; or

     (h) Judgments. There is entered against the Company or any Subsidiary thereof (i) one or more final, nonappealable judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer is rated at least “A” by A.M. Best Company, has been notified of the potential claim and does not dispute coverage), or (ii) any one or more non-monetary final, nonappealable judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 20 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

     (i) ERISA; Foreign Government Scheme or Arrangement. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Company under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, (ii) the Company or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount, or (iii) a Foreign Plan Event occurs, or the Company or any Loan Party fails to pay amounts due, with respect to any Foreign Plan resulting in liabilities, which when combined with clauses (i) and (ii), respectively, in an aggregate amount in excess of the Threshold Amount; or

     (j) Invalidity of Loan Documents. Any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations and termination of the Commitments, ceases to be in full force and effect and the invalidity of

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such provisions could reasonably be expected to materially and adversely affect the rights and remedies of the Secured Parties; or any Loan Party or any other Person contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document and the revocation, termination or rescission of such provision could reasonably be expected to materially and adversely affect the rights and remedies of the Secured Parties; or

     (k) Change of Control. There occurs any Change of Control; or

     (l) Collateral Documents. Any Collateral Document after delivery thereof pursuant to Section 4.01 or 6.13 shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien (subject to Liens permitted by Section 7.01) on any material portion of the Collateral purported to be covered thereby; or

     (m) Subordination. (i) The subordination provisions of the Subordinated Notes Documents the documents evidencing or governing any other subordinated Indebtedness (the “Subordinated Provisions”) shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable against any holder of the applicable subordinated Indebtedness; or (ii) the Company or any other Loan Party shall, directly or indirectly, disavow or contest in any manner (A) the effectiveness, validity or enforceability of any of the Subordination Provisions, (B) that the Subordination Provisions exist for the benefit of the Administrative Agent, the Lenders and the L/C Issuer or (C) that all payments of principal of or premium and interest on the applicable subordinated Indebtedness, or realized from the liquidation of any property of any Loan Party, shall be subject to any of the Subordination Provisions; or

     (n) Material Contracts. The occurrence of any default or breach by any party under any Material Contract, or any Material Contract shall be terminated prior to its term for any reason and such default, breach or termination could reasonably be expected to have a Material Adverse Effect.

     8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

     (a) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company;

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     (c) require that each Borrower Cash Collateralize the L/C Obligations (in an amount equal to its pro rata share of the then Outstanding Amount thereof); and

     (d) exercise on behalf of itself, the Lenders and the L/C Issuer all rights and remedies available to it, the Lenders and the L/C Issuer under the Loan Documents;

provided that upon the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower under the Bankruptcy Code of the United States, upon the filing of a petition for the commencement of any insolvency proceedings with respect of any Japanese Subsidiary, or upon the occurrence of any event specified under Section 8.01(g)(iii) or (iv), the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrowers to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

     8.03 Application of Funds. After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer (including fees and time charges for attorneys who may be employees of any Lender or the L/C Issuer) and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Obligations, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, L/C Borrowings and amounts owing under Secured Hedge Agreements and Secured Cash Management Agreements, ratably among the Lenders, the L/C Issuer, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth held by them;

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Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit; and

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Company or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.

ARTICLE IX
ADMINISTRATIVE AGENT

     9.01 Appointment and Authority. (a) Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and no Borrower shall have rights as a third party beneficiary of any of such provisions.

     (b) The Administrative Agent shall also act as the “collateral agent”, “security agent”, “security trustee”, or in any similar capacity under the Loan Documents, and each of the Lenders (in its capacities as a Lender, Swing Line Lender (if applicable), potential Hedge Bank and potential Cash Management Bank) and the L/C Issuer hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent, “security agent”, “security trustee”, or in any similar capacity of such Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent”, “security agent”, “security trustee”, or in any similar capacity and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent”, “security agent”, “security trustee”, or in any similar capacity under the Loan Documents) as if set forth in full herein with respect thereto.

     9.02 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or

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“Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

     9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

     (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

     (b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

     (c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any of the Borrowers or any of their respective Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

     The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Company, a Lender or the L/C Issuer.

     The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or

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(vi) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

     9.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

     9.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

     9.06 Resignation of Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Company. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Company, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Company and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly,

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until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Company to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

     9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

     9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Bookrunners, Arrangers or Documentation Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.

     9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise

     (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial proceeding; and

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     (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or the L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or the L/C Issuer or in any such proceeding.

     9.10 Collateral and Guaranty Matters. The Lenders and the L/C Issuer irrevocably authorize the Administrative Agent, at its option and in its discretion,

     (a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit, (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document, or (iii) if approved, authorized or ratified in writing in accordance with Section 10.01;

     (b) to release any Subsidiary Guarantor from its obligations under any Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder; and

     (c) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 7.01(i).

     Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Subsidiary Guarantor from its obligations under any Guaranty pursuant to this Section 9.10. In each case as specified in this Section 9.10, the Administrative Agent will, at the Company’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under its Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.10.

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ARTICLE X
MISCELLANEOUS

     10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Company or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Company or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no such amendment, waiver or consent shall:

     (a) waive any condition set forth in Section 4.01 (other than Section 4.01(b)(i)), or, in the case of the initial Credit Extension, Section 4.02, without the written consent of each Lender;

     (b) without limiting the generality of clause (a) above, waive any condition set forth in Section 4.02 as to any Credit Extension under the Revolving Credit Facility without the written consent of the Required Revolving Lenders;

     (c) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;

     (d) postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to such payment;

     (e) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (v) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document, or change the manner of computation of any financial ratio (including any change in any applicable defined term) used in determining the Applicable Rate that would result in a reduction of any interest rate on any Loan or any fee payable hereunder, without the written consent of each Lender entitled to such amount; provided that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of any Borrower to pay interest or Letter of Credit Fees at the Default Rate;

     (f) change Section 2.13 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender;

     (g) change (i) any provision of this Section 10.01 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder (other than the definitions specified in clause (ii) of this Section 10.01(g)), without the written consent of each Lender or (ii) the

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definition of “Required Revolving Lenders” or “Required Term Lenders” without the written consent of each Lender under the applicable Facility;

     (h) release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender;

     (i) release the Company from the Company Guaranty or any Subsidiary Guarantor from its Guaranty, without the written consent of each Lender; or

     (j) impose any greater restriction on the ability of any Lender under a Facility to assign any of its rights or obligations hereunder without the written consent of (i) if such Facility is the Term Loan Facility, the Required Term Lenders and (ii) if such Facility is the Revolving Credit Facility, the Required Revolving Lenders;

and provided, further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iv) Section 10.06(h) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification; and (v) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

     10.02 Notices; Effectiveness; Electronic Communications. (a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in clause (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

     (i) if to a Borrower, the Administrative Agent, the L/C Issuer or the Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

     (ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have

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been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in clause (b) below, shall be effective as provided in such clause (b).

     (b) Electronic Communications. Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Company may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

     Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

     (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Borrower, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided that in no event shall any Agent Party have any liability to

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any Borrower, any Lender, the L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

     (d) Change of Address, Etc. Each of the Borrowers, the Administrative Agent, the L/C Issuer and the Swing Line Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Company, the Administrative Agent, the L/C Issuer and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

     (e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of any Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Company shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of any Borrower. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

     10.03 No Waiver; Cumulative Remedies. No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

     10.04 Expenses; Indemnity; Damage Waiver. (a) Costs and Expenses. The Company shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the

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Administrative Agent, any Lender or the L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the L/C Issuer), and shall pay all fees and time charges for attorneys who may be employees of the Administrative Agent, any Lender or the L/C Issuer, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

     (b) Indemnification by the Company. The Company shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, direct damages (which may include payments by an Indemnitee of special, indirect, consequential or punitive damages to third parties), liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to any Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Company or any other Loan Party or any of the Company’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, fraud or willful misconduct of such Indemnitee. No Loan Party shall have any indemnification obligation under this section or otherwise to any Indemnitee (other than the Administrative Agent (and any sub-agent thereof) and the Arranger) to the extent of any losses, claims, damages, liabilities and related expenses asserted by an Indemnitee against another Indemnitee under this Agreement.

     (c) Reimbursement by Lenders. To the extent that the Company for any reason fails to indefeasibly pay any amount required under clause (a) or (b) of this

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Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in connection with such capacity. The obligations of the Lenders under this clause (c) are subject to the provisions of Section 2.12(d).

     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law (except as provided in clause (b) above), no Borrower and no Indemnitee shall assert, and each hereby waives, any claim against the other or any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in clause (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

     (e) Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

     (f) Survival. The agreements in this Section shall survive the resignation of the Administrative Agent, the L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

     10.05 Payments Set Aside. To the extent that any payment by or on behalf of any Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and

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the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Applicable Overnight Rate from time to time in effect, in the applicable currency of such recovery or payment. The obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

     10.06 Successors and Assigns. (a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 10.06(b), (ii) by way of participation in accordance with the provisions of Section 10.06(d), or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 10.06(f), or (iv) to an SPC in accordance with the provisions of Section 10.06(h) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in clause (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

     (b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment(s) and the Loans (including for purposes of Section 10.06(b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

     (i) Minimum Amounts.

     (A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment under any Facility and the Loans at the time owing to it under such Facility or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

     (B) in any case not described in clause (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment

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and Assumption, as of the Trade Date, shall not be less than $5,000,000, in the case of any assignment in respect of the Revolving Credit Facility, or $1,000,000, in the case of any assignment in respect of the Term Loan Facility, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Company otherwise consents (each such consent not to be unreasonably withheld or delayed); provided that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met.

     (ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not (A) apply to the Swing Line Lender’s rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its rights and obligation among separate Facilities on a non-pro rata basis;

     (iii) Required Consents. No consent shall be required for any assignment except to the extent required by clause (b)(i)(B) of this Section and, in addition:

     (A) the consent of the Company (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;

     (B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (i) any Term Loan Commitment or Revolving Credit Commitment if such assignment is to a Person that is not a Lender with a Commitment in respect of the applicable Facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (ii) any Term Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund; and

     (C) the consent of the L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and

     (D) the consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment in respect of the Revolving Credit Facility.

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     (iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount, if any, required as set forth in Schedule 10.06; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

     (v) No Assignment to Company. No such assignment shall be made to the Company or any of the Company’s Affiliates or Subsidiaries.

     (vi) No Assignment to Natural Persons. No such assignment shall be made to a natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to clause (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, each Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this clause shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.06(d).

     (c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

     (d) Participations. Any Lender may at any time, without the consent of, or notice to, any Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Company or any of the Company’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or

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obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

     Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant. Subject to clause (e) of this Section, each Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.06(b). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender.

     (e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Company’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Company is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 3.01(e) as though it were a Lender.

     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

     (g) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

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     (h) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Company (an “SPC”) the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the Administrative Agent as is required under Section 2.12(b)(ii). Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Borrowers under this Agreement (including its obligations under Section 3.04), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof. Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of the Company and the Administrative Agent and with the payment of a processing fee in the amount of $2,500, assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.

     (i) Resignation as L/C Issuer or Swing Line Lender after Assignment. Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Revolving Credit Commitments and Revolving Credit Loans pursuant to Section 10.06(b), Bank of America may, (i) upon 30 days’ notice to the Company and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Company, resign as Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing Line Lender, the Company shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided that no failure by the Company to appoint any such successor shall affect the resignation of Bank of America as L/C Issuer or Swing Line Lender, as the case may be. If Bank of America resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in

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Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

     10.07 Treatment of Certain Information; Confidentiality. Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to a Borrower and its obligations, (g) with the consent of the Company or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Company.

     For purposes of this Section, “Information” means all information received from the Company or any Subsidiary thereof relating to the Company or any Subsidiary thereof or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by the Company or any Subsidiary thereof, provided that, in the case of information received from the Company or any such Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

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     Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the Information may include material non-public information concerning the Company or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including Federal and state securities Laws.

     10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of any Borrower against any and all of the obligations of such Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender or the L/C Issuer, irrespective of whether or not such Lender or the L/C Issuer shall have made any demand under this Agreement or any other Loan Document and although such obligations of such Borrower may be contingent or unmatured or are owed to a branch or office of such Lender or the L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify the Company and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

     10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Company. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

     10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery

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of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

     10.11 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

     10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

     10.13 Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender is a Defaulting Lender, then the Company may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

     (a) the Company shall have paid (or caused a Designated Subsidiary to pay) to the Administrative Agent the assignment fee specified in Section 10.06(b);

     (b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company or applicable Designated Subsidiary (in the case of all other amounts);

     (c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and

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     (d) such assignment does not conflict with applicable Laws.

     A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Company to require such assignment and delegation cease to apply.

     10.14 Governing Law; Jurisdiction; Etc. (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

     (b) SUBMISSION TO JURISDICTION. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

     (c) WAIVER OF VENUE. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

     (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. EACH JAPANESE BORROWER HEREBY

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IRREVOCABLY APPOINTS THE COMPANY, AS ITS AUTHORIZED AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT AND CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY SUCH COURTS BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO SUCH AGENT AT SUCH ADDRESS, AND AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW: (I) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR PROCEEDING; AND (II) SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO IT. IF ANY AGENT APPOINTED BY ANY PERSON PARTY HERETO REFUSES TO ACCEPT SERVICE, SUCH PERSON HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL UPON RECEIPT CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN CONTAINED SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY OTHER PERSON PARTY HERETO TO BRING PROCEEDINGS AGAINST SUCH PARTY IN THE COURTS OF ANY OTHER JURISDICTION.

     10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     10.16 California Judicial Reference. If any action or proceeding is filed in a court of the State of California by or against any party hereto in connection with any of the transactions contemplated by this Agreement or any other Loan Document, (a) the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee (who shall be a single active or retired judge) to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision, provided that at the option of any party to such proceeding, any such issues pertaining to a “provisional remedy” as defined in California Code of Civil Procedure Section 1281.8 shall be heard and determined by the court, and (b) without limiting the generality of Section 10.04, the Company shall be solely responsible to pay all fees and expenses of any referee appointed in such action or proceeding.

     10.17 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby, each Borrower acknowledges and agrees, and acknowledges its

137

Affiliates’ understanding, that: (i) the credit facility provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Borrowers and their respective Affiliates, on the one hand, and the Administrative Agent and the Arranger, on the other hand, and the Borrowers are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, the Administrative Agent and the Arranger each is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for any of the Borrower or any of Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the Administrative Agent nor the Arranger has assumed or will assume an advisory, agency or fiduciary responsibility in favor of any Borrower with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent or the Arranger has advised or is currently advising any of the Borrowers or their respective Affiliates on other matters) and neither the Administrative Agent nor the Arranger has any obligation to any of the Borrowers or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent and the Arranger and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrowers and their respective Affiliates, and neither the Administrative Agent nor the Arranger has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent and the Arranger have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and each Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. Each Borrower hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent and the Arranger with respect to any breach or alleged breach of agency or fiduciary duty.

     10.18 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of each Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Borrower in accordance with the Act.

     10.19 Time of the Essence. Time is of the essence of the Loan Documents.

     10.20 Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation

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of each Borrower in respect of any such sum due from it to the Administrative Agent or the Lenders hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent from any Borrower in the Agreement Currency, such Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or the Person to whom such obligation was owing against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Administrative Agent in such currency, the Administrative Agent agrees to return the amount of any excess to such Borrower (or to any other Person who may be entitled thereto under applicable law).

     10.21 Appointment and Authority of the Company. Each of the other Loan Parties hereby irrevocably appoints the Company to act on its behalf under this Agreement and under the other Loan Documents to which it is a party, and authorizes the Company to take such actions on its behalf and to exercise such powers as are delegated to it by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.

     10.22 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

     10.23 Lenders’ Joint and Several Rights with Respect to Taiwanese Collateral. With respect to the Taiwanese Collateral, the rights of the Lenders hereunder are joint and several under Article 283 of the Civil Code of the Republic of China and, accordingly, each Lender shall, subject to the terms hereof and of the Taiwanese Collateral Documents, be entitled to claim for the full Obligations amount at any time owing and each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and the Taiwanese Collateral Documents with respect to such full amount; provided that each Lender agrees not to claim or enforce such rights unilaterally but shall appoint the Administrative Agent under pursuant to Section 9.01 to exercise and enforce the Lenders’ rights arising out of this Agreement and share among themselves any risks and benefits in respect of the Obligations in accordance with this Agreement or any Taiwanese Collateral Document in proportion to their respective Applicable Percentage of the Facilities.

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                          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

ASYST TECHNOLOGIES, INC.

By:

Name:

Title:

ASYST JAPAN, INC.

By:

Name:

Title:

S-1

BANK OF AMERICA, N.A.,
as Administrative Agent

By:

Name:

Title:

S-2

BANK OF AMERICA, N.A.,
as a Lender, L/C Issuer and Swing Line Lender

By:

Name:

Title:

S-3

COMERICA BANK,
as a Lender

By:

Name:

Title:

S-4

KEYBANK NATIONAL ASSOCIATION

as a Lender

By:

Name:

Title:

S-5

UNION BANK OF CALIFORNIA, N.A.

as a Lender

By:

Name:

Title:

S-6

DEVELOPMENT BANK OF JAPAN

as a Lender

By:

Name:

Title:

S-7

EXHIBIT A

FORM OF COMMITTED LOAN NOTICE

Date:                                         ,                     

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that certain Credit Agreement, dated as of June 22, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Asyst Technologies, Inc., a California corporation (the “Company”) and Asyst Japan, Inc., a Japanese corporation (“AJI” and, together with the Company, the “Borrowers”), the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

     The Company hereby requests, on behalf of itself or, if applicable, the other Borrower or the Designated Borrower referenced in item 6 below (the “Applicable Other Borrower”) (select one):

o A Borrowing of [Revolving Credit] [Term] Loans o A conversion or continuation of [Revolving Credit] [Term] Loans

1.	On                                                                                 (a Business Day).
2.	In the amount of $                                                            .
3.	Comprised of                                                             .
	[Type of Loan requested]
4.	In the following currency:                                                             .
5.	For Eurodollar Rate Loans: with an Interest Period of months.
6.	On behalf of                                                             [insert name of applicable Other/Designated Borrower].

     [The Revolving Credit Borrowing, if any, requested herein complies with the provisos to the first sentence of Section 2.01(b) of the Agreement.]¹

     The Borrower hereby represents and warrants that the conditions specified in Sections 4.02(a), (b) and (c) shall be satisfied on and as of the date of the applicable Credit Extension.

¹ Include this sentence in the case of a Revolving Credit Facility.

A-1
Form of Committed Loan Notice

ASYST TECHNOLOGIES, INC.

By:

Name:

Title:

A-2
Form of Committed Loan Notice

EXHIBIT B

FORM OF SWING LINE LOAN NOTICE

Date:                                         ,                     

To:	Bank of America, N.A., as Swing Line Lender
	Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that certain Credit Agreement, dated as of June 22, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Asyst Technologies, Inc., a California corporation (the “Company”) and Asyst Japan, Inc., a Japanese corporation, the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

     The Company hereby requests a Swing Line Loan:

1.	On                                                                                  (a Business Day).
2.	In the amount of $                                          .

     The Swing Line Borrowing requested herein complies with the requirements of the provisos to the first sentence of Section 2.04(b) of the Agreement.

     The Company hereby represents and warrants that the conditions specified in Sections 4.02(a), (b) and (c) shall be satisfied on and as of the date of the Applicable Credit Extension.

ASYST TECHNOLOGIES, INC.

By:

Name:

Title:

B-1
Form of Swing Line Loan Notice

EXHIBIT C-1

FORM OF TERM NOTE

                                        ,                     

     FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to                                          or registered assigns (the “Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of the Term Loan from time to time made by the Lender to the Borrower under that certain Credit Agreement, dated as of June 22, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Asyst Technologies, Inc., a California corporation and Asyst Japan, Inc., a Japanese corporation, the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

     The Borrower promises to pay interest on the unpaid principal amount of the Term Loan made by the Lender from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in the currency in which the Term Loan was denominated and in Same Day Funds at the Administrative Agent’s Office for such currency. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

     This Term Note is one of the Term Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. This Term Note is also entitled to the benefits of each Guaranty and is secured by the Collateral. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Term Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. The Term Loan made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Term Note and endorse thereon the date, amount, currency and maturity of its Loans and payments with respect thereto.

     The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Term Note.

C-1-1
Form of Note

     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

ASYST JAPAN, INC.

By:

Name:

Title:

C-1-2
Form of Note

LOANS AND PAYMENTS WITH RESPECT THERETO

		Currency		Amount of	Outstanding
		and	End of	Principal or	Principal
	Type of	Amount of	Interest	Interest Paid	Balance This	Notation
Date	Loan Made	Loan Made	Period	This Date	Date	Made By

C-1-3

EXHIBIT C-2

FORM OF [REVOLVING CREDIT] [SWING LINE] NOTE

     FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to                                         or registered assigns (the “Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each [Revolving Credit] [Swing Line] Loan from time to time made by the Lender to the Borrower under that certain Credit Agreement, dated as of June 22, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Asyst Technologies, Inc., a California corporation and Asyst Japan, Inc., a Japanese corporation, the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

     The Borrower promises to pay interest on the unpaid principal amount of each [Revolving Credit] [Swing Line] Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. [Except as otherwise provided in Section 2.04(f) of the Agreement with respect to Swing Line Loans, a][A]ll payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in the currency in which such [Revolving Credit] [Swing Line] Loan was denominated and in Same Day Funds at the Administrative Agent’s Office for such currency. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

     This [Revolving Credit] [Swing Line] Note is one of the [Revolving Credit] [Swing Line] Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. This [Revolving Credit] [Swing Line] Note is also entitled to the benefits of [each Guaranty][the US Subsidiary Guaranty] and is secured by [the Collateral] [the US Collateral]. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this [Revolving Credit] [Swing Line] Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. [Revolving Credit] [Swing Line] Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this [Revolving Credit] [Swing Line] Note and endorse thereon the date, amount, currency and maturity of its Loans and payments with respect thereto.

     The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this [Revolving Credit] [Swing Line] Note.

C-2-1
Form of Note

     THIS [REVOLVING CREDIT] [SWING LINE] NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

[BORROWER]

By:

Name:

Title:

C-2-2
Form of Note

LOANS AND PAYMENTS WITH RESPECT THERETO

				Amount of
		Currency		Principal or	Outstanding
		and	End of	Interest	Principal
	Type of	Amount of	Interest	Paid This	Balance	Notation
Date	Loan Made	Loan Made	Period	Date	This Date	Made By

C-2-3

EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:                     ,

To:    Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

          Reference is made to that certain Credit Agreement, dated as of June 22, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Asyst Technologies, Inc., a California corporation (the “Company”) and Asyst Japan, Inc., a Japanese corporation, the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

          The undersigned Responsible Officer², acting in such capacity and position on behalf of the Company, hereby certifies as of the date hereof that he/she is the                                                              of the Company, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Company, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

          1. Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of the Company ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

          1. Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Company ended as of the above date. Such financial statements fairly present the financial condition, results of operations and cash flows of the Company and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

² This Certificate should be from the Chief Executive Officer or Treasurer of the Company.

D-1
Form of Compliance Certificate

          2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Company during the accounting period covered by the attached financial statements.

          3. A review of the activities of the Company during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Company performed and observed all its Obligations under the Loan Documents, and

[select one:]

          [to the best knowledge of the undersigned during such fiscal period, the Company performed and observed each covenant and condition of the Loan Documents applicable to it, and no Default has occurred and is continuing.]

—or—

          [the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

          4. The representations and warranties of the Borrowers contained in Article V of the Agreement and (ii) each Loan Party contained in each other Loan Document or in any document furnished at any time under or in connection with the Loan Documents, are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Compliance Certificate, the representations and warranties contained in clauses (a) and (b) of Section 5.05 of the Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including the statements in connection with which this Compliance Certificate is delivered.

          5. The financial covenant analyses and information set forth on Schedules 2 and 3 attached hereto are true and accurate on and as of the date of this Certificate. The line item descriptions on the attached Schedules 2 and 3 are in summary form for ease of use only and the provisions of the related definitions shall control.

D-2
Form of Compliance Certificate

          IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                     ,                     .

ASYST TECHNOLOGIES, INC.

By:

Name:

Title:

D-3
Form of Compliance Certificate

For the Quarter/Year ended                     , ____ (“Statement Date”)

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

I.	Section 7.11(a) – Consolidated Total Leverage Ratio.
	A.	Consolidated Funded Indebtedness at Statement Date		$
	B.	Consolidated EBITDA for Measurement Period ending on above date (“Subject Period”):		$
		1.	Consolidated Net Income for Subject Period:	$
		2.	Consolidated Interest Charges for Subject Period:	$
		3.	Provision for income taxes for Subject Period:	$
		4.	Depreciation expenses for Subject Period:	$
		5.	Amortization expenses for Subject Period:	$
		6.	Income Tax credits for Subject Period:	$
		8.	Consolidated EBITDA (Lines II.A.1 + 2 + 3 + 4 + 5 – 6):	$
	C.	Consolidated Total Leverage Ratio (Line I.A ¸ Line I.B):		____ to 1
		Maximum permitted:

	Maximum Consolidated Total
Four Fiscal Quarters Ending	Leverage Ratio
Closing Date through June 29, 2006	3.75:1
June 30, 2006 and each fiscal quarter thereafter	3.50

II.	Section 7.11 (b) – Consolidated Senior Leverage Ratio.
	A.	Consolidated Senior Indebtedness at Statement Date	$
	B.	Consolidated EBITDA for Subject Period (Line I.B.9 above):	$
	C.	Consolidated Senior Leverage Ratio (Line II.A ¸ Line II.B):	____ to 1
		Maximum permitted:

D-4
Form of Compliance Certificate

	Maximum Consolidated Senior
Four Fiscal Quarters Ending	Leverage Ratio
Closing Date through December 30, 2006	2.25:1
December 31, 2006 and each fiscal quarter thereafter	2.00:1

III.	Section 7.11(c) — Consolidated Fixed Charge Coverage Ratio
	A.	Consolidated EBITDA for Subject Period (Line I.B.9 above):	$
	B.	Cash Capital Expenditures for Subject Period:	$
	C.	Federal, State, Local and Foreign Cash Income Taxes	$
	D.	Consolidated Interest Charges for Subject Period:	$
	E.	Scheduled Principal payments, etc. for Subject Period:	$
	F.	Consolidated Fixed Charge Coverage Ratio ([Line III.A – Line III.B – Line III.C] ¸ [Line III.D + Line III.E]):
		Minimum required:

	Minimum Consolidated Fixed
Four Fiscal Quarters Ending	Charge Coverage Ratio
Closing Date through December 30, 2006	2.00:1
December 31, 2006 and each fiscal quarter thereafter	2.50:1

D-5
Form of Compliance Certificate

IV.	Section 7.11 — Capital Expenditures.
	A.	Capital Expenditures made during fiscal year to date:	$
	B.	Maximum permitted Capital Expenditures ($_____________:	$
	C.	Excess (deficient) for covenant compliance (Line IV.B — IV.A):	$

D-6
Form of Compliance Certificate

For the Quarter/Year ended                     (“Statement Date”)

SCHEDULE 3

to the Compliance Certificate

($ in 000’s)

Consolidated EBITDA

(in accordance with the definition of Consolidated EBITDA

as set forth in the Agreement)

					Twelve
Consolidated	Quarter	Quarter	Quarter	Quarter	Months
EBITDA	Ended	Ended	Ended	Ended	Ended
Consolidated Net Income
+ Consolidated Interest Charges
+ income taxes
+ depreciation expense
+ amortization expense
– income tax credits
= Consolidated EBITDA

D-7
Form of Compliance Certificate

EXHIBIT E

ASSIGNMENT AND ASSUMPTION

     This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each]³ Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each]⁴ Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]⁵ hereunder are several and not joint.]⁶ Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

     For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including, without limitation, the Letters of Credit and the Swing Line Loans included in such facilities⁷) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively

3	For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.
4	For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.
5	Select as appropriate.
6	Include bracketed language if there are either multiple Assignors or multiple Assignees.
7	Include all applicable subfacilities.

E-1
Form of Assignment and Assumption

as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

1.	Assignor[s]:
2.	Assignee[s]:
	[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]
3.	Borrower(s): Asyst Technologies, Inc., a California corporation and Asyst Japan, Inc., a Japanese corporation and the Designated Borrowers from time to time party to the Credit Agreement
4.	Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement
5.	Credit Agreement: Credit Agreement, dated as of June 22, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Asyst Technologies, Inc., a California corporation (the “Company”) and Asyst Japan, Inc., a Japanese corporation, the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.
6.	Assigned Interest[s]:

				Aggregate
				Amount of			Percentage
				Commitment/	Amount of		Assigned of
		Facility		Loans	Commitment/Loans		Commitment/	CUSIP
Assignor[s]	Assignee[s]	Assigned	for all Lenders8		Assigned	Loans9		Number
				$	$		%
				$	$		%
				$	$		%

8	Amounts in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.
9	Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

E-2
Form of Assignment and Assumption

[7. Trade Date:                                         ]¹⁰

Effective Date:                                         , 20___[TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

     The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR [NAME OF ASSIGNOR]
By:
	Title:
ASSIGNEE [NAME OF ASSIGNEE]
By:
	Title:

[Consented to and]¹¹ Accepted:

BANK OF AMERICA, N.A., as      Administrative Agent
By:
	Title:
[Consented to:]12
ASYST TECHNOLOGIES, INC.
By:
	Title:

10	To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.
11	To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.
12	To be added only if the consent of the Company and/or other parties (e.g. Swing Line Lender, L/C Issuer) is required by the terms of the Credit Agreement.

E-3
Form of Assignment and Assumption

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

[                                        ]¹³

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

          1. Representations and Warranties.

          1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Company, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Company, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

          1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 10.06(b)(iii), (v) and (vi) and (vii) of the Credit Agreement (subject to such consents, if any, as may be required under Section 10.06(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section ___thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without

¹³ Describe Credit Agreement at option of Administrative Agent.

E-4
Form of Assignment and Assumption

reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

          2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.

          3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of                      [confirm that choice of law provision parallels the Credit Agreement].

E-5
Form of Assignment and Assumption

EXHIBIT F-1

FORM OF COMPANY GUARANTY

F-1-1
Form of Company Guaranty

EXHIBIT F-2

FORM OF US SUBSIDIARY GUARANTY

F-2-1
Form of US Subsidiary Guaranty

EXHIBIT F-3

FORM OF JAPANESE GUARANTY

F-3-1
Form of Japanese Guaranty

EXHIBIT F-4

FORM OF UK SUBSIDIARY GUARANTY

F-4-1
Form of UK Subsidiary Guaranty

EXHIBIT F-5

FORM OF TAIWANESE SUBSIDIARY GUARANTY

F-5-1
Form of Taiwanese Subsidiary Guaranty

EXHIBIT G-1

FORM OF US SECURITY AGREEMENT

G-1-1
Form of US Security Agreement

EXHIBIT G-2 A & B

FORM OF JAPANESE SECURITY AGREEMENTS

G-2-1
Form of Japanese Security Agreements

EXHIBIT G-3 A & B

FORM OF UK SECURITY AGREEMENTS

G-3-1
Form of UK Security Agreements

EXHIBIT G-4 A, B, C, D & E

FORM OF TAIWANESE SECURITY AGREEMENTS

G-4-1
Form of Taiwanese Security Agreements

EXHIBIT I

FORM OF DESIGNATED BORROWER
REQUEST AND ASSUMPTION AGREEMENT

Date:                                         ,                     

To: Bank of America, N.A., as Administrative Agent

     Ladies and Gentlemen:

     This Designated Borrower Request and Assumption Agreement is made and delivered pursuant to Section 2.14 of that certain Credit Agreement, dated as of June 22, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Asyst Technologies, Inc., a California corporation (the “Company”) and Asyst Japan, Inc., a Japanese corporation, the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

     Each of                                          (the “Designated Borrower”) and the Company hereby confirms, represents and warrants to the Administrative Agent and the Lenders that the Designated Borrower is a Subsidiary of the Company.

     The documents required to be delivered to the Administrative Agent under Section 2.14 of the Credit Agreement will be furnished to the Administrative Agent in accordance with the requirements of the Credit Agreement.

     Complete if the Designated Borrower is a Domestic Subsidiary: The true and correct US taxpayer identification number of the Designated Subsidiary is                                         .

     Complete if the Designated Borrower is a Foreign Subsidiary: The true and correct unique identification number that has been issued to the Designated Borrower by its jurisdiction of organization and the name of such jurisdiction are set forth below:

Identification Number Jurisdiction of Organization

     The parties hereto hereby confirm that with effect from the date hereof, the Designated Borrower shall have obligations, duties and liabilities toward each of the other parties to the Credit Agreement identical to those which the Designated Borrower would have had if the Designated Borrower had been an original party to the Credit Agreement as a Borrower. The Designated Borrower confirms its acceptance of, and consents to, all representations and warranties, covenants, and other terms and provisions of the Credit Agreement.

     The parties hereto hereby request that the Designated Borrower be entitled to receive Revolving Facility Loans under the Credit Agreement, and understand, acknowledge and agree that neither the Designated Borrower nor the Company on its behalf shall have any right to

I-1

Form of Designated Borrower Request and Assumption Agreement

request any Revolving Facility Loans for its account unless and until the date five Business Days after the effective date designated by the Administrative Agent in a Designated Borrower Notice delivered to the Company and the Lenders pursuant to Section 2.14 of the Credit Agreement.

     This Designated Borrower Request and Assumption Agreement shall constitute a Loan Document under the Credit Agreement.

     THIS DESIGNATED BORROWER REQUEST AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

     IN WITNESS WHEREOF, the parties hereto have caused this Designated Borrower Request and Assumption Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

[DESIGNATED BORROWER]

By:

Title:

ASYST TECHNOLOGIES, INC.

By:

Title:

I-2

Form of Designated Borrower Request and Assumption Agreement

EXHIBIT J

FORM OF DESIGNATED BORROWER NOTICE

Date:                                         ,                     

To: Asyst Technologies, Inc.

     The Lenders party to the Credit Agreement referred to below

     Ladies and Gentlemen:

     This Designated Borrower Notice is made and delivered pursuant to Section 2.14 of that certain Credit Agreement, dated as of June 22, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Asyst Technologies, Inc., a California corporation (the “Company”) and Asyst Japan, Inc., a Japanese corporation, the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

     The Administrative Agent hereby notifies Company and the Lenders that effective as of the date hereof [                                        ] shall be a Designated Borrower and may receive Loans for its account on the terms and conditions set forth in the Credit Agreement.

     This Designated Borrower Notice shall constitute a Loan Document under the Credit Agreement.

BANK OF AMERICA, N.A.,

as Administrative Agent

By:

Title:

J-1

Form of Designated Borrower Notice

EXHIBIT K

FORM OF CLOSING DATE CERTIFICATE

Date:                                         ,                     

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that Credit Agreement, dated as of June 22, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Asyst Technologies, Inc., a California corporation (the “Company”) and Asyst Japan, Inc., a Japanese corporation, the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

     The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the                                                              of each Loan Party, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of such Loan Party, and that:

     1. Consummation of Transaction. All actions necessary to consummate the Acquisition have been taken in accordance with the terms of the Acquisition Agreement, without any waiver or amendment not consented to by the Lenders of any term, provision or condition set forth therein, and in compliance with all applicable requirements of Law. At and as of the Closing Date, there exists no condition that would constitute a default or an event of default under the Acquisition Agreement or any Related Document.

     2. Delivery of Acquisition Agreement. Attached hereto as Annex I are true and complete, fully executed copies of the a certified copy of the Acquisition Agreement and the Related Documents. Such agreements, instruments and other documents are in full force and effect as of the date hereof and the parties thereto are in full compliance therewith in all material respects.

     3. Payment of Outstanding Indebtedness, etc. All Existing Indebtedness (other than Continuing Debt), together with all interest, all prepayment premiums and other amounts due and payable with respect thereto, has been paid in full and the commitments in respect of such Indebtedness have been terminated and all Liens securing obligations under such Indebtedness have been released. Attached hereto as Annex II are copies of all executed UCC termination statements (Form UCC-3), payoff letters or other instruments required to be delivered pursuant to Section 4.01 of the Credit Agreement.

     4. Financial Information, etc. Attached hereto as Annex III are true and complete copies of audited consolidated financial statements of (a) the Audited Financial Statements, (b) unaudited consolidated and consolidating balance sheets of the Company and its Subsidiaries

K-1

Form of Closing Date Certificate

dated [                    ], and the related consolidated and consolidating statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on that date, (c) consolidated and consolidating pro forma balance sheet of the Company and its Subsidiaries as at [                                        ,                     ], and the related consolidated and consolidating pro forma statements of income and cash flows of the Company and its Subsidiaries for the [                                        ]months then ended, giving effect to the Transaction, all in accordance with GAAP and (d) the consolidated and consolidating forecasted balance sheet and statements of income and cash flows of the Company and its Subsidiaries for the three year period from the Closing Date.

     5. Insurance. Attached hereto as Annex IV are true and complete copies of the insurance certificates required to be delivered pursuant to Section 4.01 of the Credit Agreement.

     6. Closing Fees, Expenses, etc. All fees required to be paid to the Administrative Agent and the Arranger on or before the Closing Date and all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date have been paid. All fees required to be paid to the Lenders on or before the Closing Date have been paid.

     7. Material Adverse Effect. There has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect.

     8. Closing Conditions. All conditions precedent to be satisfied by the Closing Date as set forth in Article IV of the Credit Agreement (and not otherwise covered by the preceding paragraphs) have been satisfied in full. All conditions precedent to be satisfied by the Closing Date as set forth in the Acquisition Agreement (and not otherwise covered by the preceding paragraphs) have been satisfied in full.

K-2

Form of Closing Date Certificate

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the date first written above.

ASYST TECHNOLOGIES, INC.

By:

Name:

Title:

ASYST JAPAN, INC.

By:

Name:

Title:

ASYST TECHNOLOGIES EUROPE LTD.

By:

Name:

Title:

ASYST TECH TAIWAN LTD.

By:

Name:

Title:

K-3

Form of Closing Date Certificate

ANNEX I TO CLOSING DATE CERTIFICATE

ACQUISITION AGREEMENT

K-4

Form of Closing Date Certificate

ANNEX II TO CLOSING DATE CERTIFICATE

UCC TERMINATION STATEMENTS, PAYOFF LETTERS, ETC.

K-5

Form of Closing Date Certificate

ANNEX III TO CLOSING DATE CERTIFICATE

FINANCIAL INFORMATION

K-6

Form of Closing Date Certificate

ANNEX IV TO CLOSING DATE CERTIFICATE

INSURANCE

K-7

Form of Closing Date Certificate

EXHIBIT L

FORM OF SOLVENCY CERTIFICATE

Date:                                         ,                     

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that Credit Agreement, dated as of June 22, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Asyst Technologies, Inc., a California corporation (the “Company”) and Asyst Japan, Inc., a Japanese corporation, the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

          The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the chief financial officer (the “Chief Financial Officer”) of each Loan Party, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of such Loan Party, and that:

     1. The Chief Financial Officer has knowledge of the preparation and negotiation of, and has reviewed and is familiar with the provisions of, the Loan Documents, the Acquisition Agreement and Related Documents, and the agreements executed in connection therewith and in connection with the other Transactions.

     2. The Chief Financial Officer is familiar (both before and after giving effect to the Transactions) with the finances of each Loan Party and has participated in the preparation of the financial statements of each Loan Party.

     3. On a pro forma basis after giving effect to the Transactions, as of the Closing Date each Loan Party is Solvent.

L-1
Form of Solvency Certificate

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the date first written above.

ASYST TECHNOLOGIES, INC.

By:

Name:

Title:

ASYST JAPAN, INC.

By:

Name:

Title:

ASYST TECHNOLOGIES EUROPE LTD.

By:

Name:

Title:

ASYST TECH TAIWAN LTD.

By:

Name:

Title:

L-2
Form of Solvency Certificate

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF ASYST TECHNOLOGIES, INC.

	STATE/COUNTRY OF
NAME	INCORPORATION
Asyst Technologies Europe, Ltd.	U.K.
Asyst Technologies GmbH	Germany
Asyst Technologies (Far East) Pte. Ltd.	Singapore
Asyst Technologies (Taiwan) Ltd.	R.O.C.
Asyst Technologies Malaysia Sdn. Bhd.	Malaysia
SMIF Equipment (Tianjin) Co., Ltd.	P.R.C.
Korea Asyst Ltd.	Korea
Asyst Japan, Inc.	Japan
Asyst Shinko, Inc.	Japan

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-85327, 333-89489, 333-54924, 333-56068, 333-63422, 333-69812, 333-97227 and 333-109431) and Form S-8 (No. 033-70100, 333-1438, 333-31417, 333-45799, 333-71641, 333-94619, 333-46002, 333-61166, 333-69822, 333-89590, 333-109432 and 333-121988) of Asyst Technologies, Inc. of our report dated June 13, 2006 relating to the financial statements, financial statement schedule, management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

San Jose, California

June 14, 2006

EX-31.1

EXHIBIT 31.1

I, Stephen S. Schwartz, certify that:

     1. I have reviewed this Annual Report on Form 10-K of Asyst Technologies, Inc. for the fiscal year ended March 31, 2006;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

          (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

          (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

          (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

          (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 13, 2006

/s/ STEPHEN S. SCHWARTZ Stephen S. Schwartz, Ph.D.

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

I, Richard H. Janney, certify that:

     1. I have reviewed this Annual Report on Form 10-K of Asyst Technologies, Inc. for the fiscal year ended March 31, 2006;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

          (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

          (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

          (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

          (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 13, 2006

/s/ RICHARD H. JANNEY Richard H. Janney

Interim Chief Financial Officer and Interim Principal Accounting Officer

EX-32.1

EXHIBIT 32.1

Certification

     Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), Stephen S. Schwartz, Chief Executive Officer of Asyst Technologies, Inc. (the “Company”), and Richard H. Janney, Interim Chief Financial Officer and Interim Principal Accounting Officer of the Company, each hereby certifies that, to the best of his knowledge:

     1. The Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2006, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934, and

     2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: October 13, 2006

/s/ STEPHEN S. SCHWARTZ Stephen S. Schwartz, Ph.D.	/s/ RICHARD H. JANNEY Richard H. Janney
Chief Executive Officer	Interim Chief Financial Officer

This certification is not deemed to be “filed” for purposes of section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. This certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference.