Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Mks Instruments, Inc. 90 439K
2: EX-3.1 Restated Articles of Organization 36 92K
3: EX-3.2 Amended and Restated Articles or Organization 16 46K
4: EX-3.4 Amended and Restated Bylaws 16 59K
7: EX-10.11 Loan Agreement Dated November 11, 1993 101 293K
8: EX-10.13 Loan Agreement Dated February 23, 1996 94 300K
9: EX-10.17 Comprehensive Supplier Agreement 121 315K
10: EX-10.18 Management Incentive Program 2 12K
5: EX-10.4 1999 Employee Stock Purchase Plan 6 28K
6: EX-10.9 Loan Agreement Dated October 31, 1995 47 154K
11: EX-23.2 Consent of Pricewaterhousecoopers LLP 1 7K
12: EX-27 Financial Data Schedule 1 7K
| Page | (sequential) | | | | (alphabetic) | Top |
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- Alternative Formats (Word, et al.)
- Agent, The
- Events of Default
- Loan Agreement
- Revolving Credit Facility
- Revolving Credit Note
- The Agent
- Waiver
- 10.10. Amendments
- 10.11. Headings
- 10.12. Waiver of Notice, Etc
- 10.13. Severability
- 10.14. Entire Agreement
- 10.15. Compliance with Covenants
- 10.16. Termination
- 10.17. Waiver of Trial by Jury
- 10.1. Assignments and Participations
- 10.2. Survival of Representations, Etc
- 10.3. Right of Setoff
- 10.4. Indemnity; Costs, Expenses and Taxes
- 10.5. Notices
- 10.6. Massachusetts Law
- 10.7. Counterparts
- 10.9. Limit on Interest
- 1.1. Definitions
- 1.2. Accounting Terms
- 1.3. Other Definitional Provisions
- 2.1. Revolving Credit
- 2.2. Advances
- 2.5. Interest Periods
- 2.6. Unused Commitment Fee
- 2.7. Deficiency Advances
- 2.8. Termination of Existing Facilities
- 3.1. Payments
- 3.2. Capital Adequacy
- 3.3. Special Provisions Governing LIBOR Loans
- 3.4. Taxes
- 4.10. Payment of Taxes
- 4.11. Transactions With Affiliates, Officers, Directors and 1% Shareholders
- 4.12. Erisa
- 4.13. Ownership of Properties; Liens
- 4.14. Employment Matters
- 4.15. Insurance
- 4.16. Indebtedness
- 4.17. Securities Law Compliance
- 4.18. Accuracy of Information
- 4.1. Organization, Existence and Power
- 4.2. Authorization of Loan Documents; Binding Effect
- 4.3. Authority
- 4.4. Capital Structure
- 4.5. Financial Condition
- 4.6. Pending Litigation
- 4.7. Certain Agreements; Material Contracts
- 4.8. Authorization, Etc
- 4.9. No Violation
- 5.1. Each Advance
- 5.2. First Advance
- 6.1. Reporting Requirements
- 6.2. Loan Proceeds
- 6.3. Maintenance of Business and Properties; Insurance
- 6.4. Payment of Taxes
- 6.5. Compliance with Laws, etc
- 6.7. Further Assurances
- 6.8. Bank Accounts
- 7.1. Sale of Assets; Mergers, Etc
- 7.2. Liens and Encumbrances
- 7.3. Sales and Leasebacks
- 7.4. Investments
- 7.5. Transactions with Affiliates
- 7.6. ERISA Compliance
- 7.7. Financial Covenants
- 7.8. Contracts Prohibiting Compliance with Agreement
- 8.1. Default
- 8.2. Agent to Act
- 8.3. Cumulative Rights
- 8.4. No Waiver
- 8.5. Allocation of Proceeds
- 9.10. Fees
- 9.1. Appointment
- 9.2. Limitation on Liability
- 9.3. Reliance
- 9.4. Notice of Default
- 9.5. No Representations
- 9.6. Indemnification
- 9.7. The Agent in its Individual Capacity
- 9.8. Resignation
- 9.9. Sharing of Payments, Etc
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| 1 | 1st Page - Filing Submission
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| " | Loan Agreement
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| 2 | Revolving Credit Facility
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| 4 | Events of Default
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| " | The Agent
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| 6 | 1.1. Definitions
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| 13 | 1.2. Accounting Terms
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| " | 1.3. Other Definitional Provisions
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| " | 2.1. Revolving Credit
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| 14 | 2.2. Advances
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| 16 | 2.5. Interest Periods
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| " | 2.6. Unused Commitment Fee
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| 17 | 2.7. Deficiency Advances
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| " | 2.8. Termination of Existing Facilities
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| 18 | 3.1. Payments
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| 19 | 3.2. Capital Adequacy
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| 20 | 3.3. Special Provisions Governing LIBOR Loans
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| 21 | 3.4. Taxes
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| 22 | 4.1. Organization, Existence and Power
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| 23 | 4.2. Authorization of Loan Documents; Binding Effect
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| " | 4.3. Authority
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| " | 4.4. Capital Structure
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| " | 4.5. Financial Condition
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| 24 | 4.6. Pending Litigation
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| " | 4.7. Certain Agreements; Material Contracts
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| " | 4.8. Authorization, Etc
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| 25 | 4.9. No Violation
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| " | 4.10. Payment of Taxes
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| " | 4.11. Transactions With Affiliates, Officers, Directors and 1% Shareholders
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| 26 | 4.12. Erisa
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| " | 4.13. Ownership of Properties; Liens
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| " | 4.14. Employment Matters
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| " | 4.15. Insurance
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| " | 4.16. Indebtedness
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| 27 | 4.17. Securities Law Compliance
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| " | 4.18. Accuracy of Information
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| " | 5.1. Each Advance
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| 28 | 5.2. First Advance
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| 29 | 6.1. Reporting Requirements
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| 31 | 6.2. Loan Proceeds
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| " | 6.3. Maintenance of Business and Properties; Insurance
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| " | 6.4. Payment of Taxes
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| 32 | 6.5. Compliance with Laws, etc
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| " | 6.7. Further Assurances
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| " | 6.8. Bank Accounts
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| 33 | 7.1. Sale of Assets; Mergers, Etc
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| " | 7.2. Liens and Encumbrances
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| 36 | 7.3. Sales and Leasebacks
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| " | 7.4. Investments
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| 37 | 7.5. Transactions with Affiliates
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| " | 7.6. ERISA Compliance
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| 38 | 7.7. Financial Covenants
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| " | 7.8. Contracts Prohibiting Compliance with Agreement
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| " | 8.1. Default
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| 41 | 8.2. Agent to Act
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| " | 8.3. Cumulative Rights
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| " | 8.4. No Waiver
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| " | 8.5. Allocation of Proceeds
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| 42 | 9.1. Appointment
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| " | 9.2. Limitation on Liability
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| 43 | 9.3. Reliance
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| " | 9.4. Notice of Default
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| " | 9.5. No Representations
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| 44 | 9.6. Indemnification
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| " | 9.7. The Agent in its Individual Capacity
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| 45 | 9.8. Resignation
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| " | 9.9. Sharing of Payments, Etc
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| 46 | 9.10. Fees
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| " | 10.1. Assignments and Participations
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| 47 | 10.2. Survival of Representations, Etc
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| 48 | 10.3. Right of Setoff
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| " | 10.4. Indemnity; Costs, Expenses and Taxes
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| 49 | 10.5. Notices
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| 50 | 10.6. Massachusetts Law
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| " | 10.7. Counterparts
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| 51 | 10.9. Limit on Interest
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| " | 10.10. Amendments
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| 52 | 10.11. Headings
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| " | 10.12. Waiver of Notice, Etc
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| 53 | 10.13. Severability
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| " | 10.14. Entire Agreement
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| " | 10.15. Compliance with Covenants
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| " | 10.16. Termination
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| " | 10.17. Waiver of Trial by Jury
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| 59 | Revolving Credit Note
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| 75 | Waiver
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EXHIBIT 10.13
LOAN AGREEMENT
by and among
MKS INSTRUMENTS, INC.,
as Borrower,
THE FIRST NATIONAL BANK OF BOSTON,
As Agent and as Lender,
and
CHEMICAL BANK,
as Lender,
February 23, 1996
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1.1. Definitions ......................................................... 1
1.2. Accounting Terms .................................................... 8
1.3. Other Definitional Provisions ....................................... 8
ARTICLE II
REVOLVING CREDIT FACILITY
2.1. Revolving Credit .................................................... 8
2.2. Advances ............................................................ 9
2.5. Interest Periods .................................................... 11
2.6. Unused Commitment Fee ............................................... 11
2.7. Deficiency Advances ................................................. 12
2.8. Termination of Existing Facilities .................................. 12
ARTICLE III
ADDITIONAL TERMS
3.1. Payments ............................................................ 13
3.2. Capital Adequacy .................................................... 14
3.3. Special Provisions Governing LIBOR Loans ............................ 15
3.4. Taxes ............................................................... 16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
4.1. Organization, Existence and Power ................................... 17
4.2. Authorization of Loan Documents; Binding Effect ..................... 18
4.3. Authority ........................................................... 18
4.4. Capital Structure ................................................... 18
4.5. Financial Condition ................................................. 18
4.6. Pending Litigation .................................................. 19
4.7. Certain Agreements; Material Contracts .............................. 19
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4.8. Authorization, Etc ................................................. 19
4.9. No Violation ....................................................... 20
4.10. Payment of Taxes ................................................... 20
4.11. Transactions With Affiliates, Officers, Directors and 1%
Shareholders ....................................................... 20
4.12. ERISA .............................................................. 21
4.13. Ownership of Properties; Liens ..................................... 21
4.14. Employment Matters ................................................. 21
4.15. Insurance .......................................................... 21
4.16. Indebtedness ....................................................... 22
4.17. Securities Law Compliance .......................................... 22
4.18. Accuracy of Information ............................................ 22
ARTICLE V
CONDITIONS TO ADVANCES
5.1. Each Advance ........................................................ 22
5.2. First Advance ....................................................... 23
ARTICLE VI
AFFIRMATIVE COVENANTS OF THE BORROWER
6.1. Reporting Requirements .............................................. 24
6.2. Loan Proceeds ....................................................... 26
6.3. Maintenance of Business and Properties; Insurance ................... 26
6.4. Payment of Taxes .................................................... 26
6.5. Compliance with Laws, etc ........................................... 27
6.7. Further Assurances .................................................. 27
6.8. Bank Accounts ....................................................... 27
ARTICLE VII
NEGATIVE COVENANTS OF THE BORROWER
7.1. Sale of Assets; Mergers, Etc ........................................ 28
7.2. Liens and Encumbrances .............................................. 29
7.3. Sales and Leasebacks ................................................ 31
7.4. Investments ......................................................... 31
7.5. Transactions with Affiliates ........................................ 32
7.6. ERISA Compliance .................................................... 32
7.7. Financial Covenants ................................................. 33
7.8. Contracts Prohibiting Compliance with Agreement ..................... 33
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ARTICLE VIII
EVENTS OF DEFAULT
8.1. Default ............................................................. 33
8.2. Agent to Act ........................................................ 36
8.3. Cumulative Rights ................................................... 36
8.4. No Waiver ........................................................... 36
8.5. Allocation of Proceeds .............................................. 36
ARTICLE IX
THE AGENT
9.1. Appointment ......................................................... 37
9.2. Limitation on Liability ............................................. 37
9.3. Reliance ............................................................ 38
9.4. Notice of Default ................................................... 38
9.5. No Representations .................................................. 38
9.6. Indemnification ..................................................... 39
9.7. The Agent in its Individual Capacity ................................ 39
9.8. Resignation ......................................................... 40
9.9. Sharing of Payments, Etc ............................................ 40
9.10. Fees ............................................................... 41
ARTICLE X
MISCELLANEOUS
10.1. Assignments and Participations ..................................... 41
10.2. Survival of Representations, Etc ................................... 42
10.3. Right of Setoff .................................................... 43
10.4. Indemnity; Costs, Expenses and Taxes ............................... 43
10.5. Notices ............................................................ 44
10.6. MASSACHUSETTS LAW .................................................. 45
10.7. Counterparts ....................................................... 45
10.8. JURISDICTION, SERVICE OF PROCESS ................................... 45
10.9. Limit on Interest .................................................. 46
10.10. Amendments ........................................................ 46
10.11. Headings .......................................................... 47
10.12. WAIVER OF NOTICE, ETC ............................................. 47
10.13. Severability ...................................................... 48
10.14. Entire Agreement .................................................. 48
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10.15. Compliance with Covenants ......................................... 48
10.16. Termination ....................................................... 48
10.17. WAIVER OF TRIAL BY JURY ........................................... 48
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LOAN AGREEMENT
This Loan Agreement (the "Agreement") is entered into as of the 23rd day
of February, 1996, by and among The First National Bank of Boston ("Bank of
Boston"), Chemical Bank ("Chemical"; hereinafter Bank of Boston and Chemical may
be referred to individually as a "Lender" or collectively as the "Lenders"), The
First National Bank of Boston in its capacity as agent for the Lenders (in such
capacity, together with any successor agent appointed in accordance with the
terms of Section 9.8, the "Agent"), and MKS Instruments, Inc., a Massachusetts
corporation ("Borrower").
PREMISES:
WHEREAS, the Borrower has requested that the Lenders make available to it
a revolving credit facility of up to $20,000,000; and
WHEREAS, the Lenders are willing to make such revolving credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. In addition to terms defined elsewhere in this
Agreement, the following terms shall have the meanings indicated, which meanings
shall be equally applicable to both the singular and plural forms of such terms:
"Adjusted LIBOR Rate" shall have the meaning set forth in Section
2.4.1.
"Advance" shall mean the drawing down by the Borrower of a Base Rate
Loan or a LIBOR Loan on any given Advance Date.
"Advance Date" shall mean the date as of which an Advance is
consummated.
"Affiliate" of any Person shall mean any other Person which,
directly or indirectly, controls, or is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" of any
Person shall mean the power, directly or indirectly, either to (i) vote 10% or
more of the securities having ordinary voting power for the election of
directors of such Person or (ii) direct the management and policies of such
Person, whether by contract or otherwise. As to
the Borrower, the term "Affiliate" shall include, without limitation, any
partnership or joint venture of which the Borrower or any Affiliate of the
Borrower is a general partner or is a limited partner with more than a ten
percent (10%) interest, and any director or executive officer of the Borrower.
"Applicable Commitment Percentage" shall mean, with respect to each
Lender at any time, a fraction, the numerator of which shall be such Lender's
Revolving Credit Commitment and the denominator of which shall be the Total
Revolving Credit Commitment, which Applicable Commitment Percentage for each
Lender as of the Closing Date is as set forth in Exhibit A; provided, however,
that the Applicable Commitment Percentage of each Lender shall be increased or
decreased to reflect any assignments to or by such Lender effected in accordance
with Section 10.1.
"Assignment and Acceptance" shall mean an Assignment and Acceptance
in the form of Exhibit B (with blanks appropriately filled in) delivered to the
Agent in connection with an assignment of a Lender's interest under this
Agreement pursuant to Section 10.1.
"Base Rate" shall mean the higher of (a) the annual rate of interest
announced from time to time by the Bank of Boston at the Bank of Boston's office
at 100 Federal Street, Boston, Massachusetts, as its "base rate" or (b) one-half
of one percent (1/2%) above the Federal Funds Effective Rate. For the purposes
of this definition, "Federal Funds Effective Rate" shall mean, 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, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Bank of Boston from three funds brokers of recognized standing selected by
the Bank of Boston.
"Base Rate Loan" shall mean an Advance that is specified as such in
the Notice of Borrowing with respect to such Advance and that bears interest at
the Base Rate.
"Borrowing" shall mean the incurrence of one or more Advances on a
given date.
"Business Day" shall mean a day on which commercial banks are
required to be open for business in Boston, Massachusetts.
"Cash Flow Ratio" shall have the meaning set forth in Section
7.7(c).
"Closing Date" shall mean the date of this Agreement.
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"Compliance Certificate" shall have the meaning set forth in Section
6.1(c).
"Consolidated Debt Service" shall mean for any period the sum
(without duplication) of Interest Expense, the interest portion of Financing
Lease Obligations and required principal payments on long-term debt of the
Borrower and its Subsidiaries, determined on a consolidated basis.
"Consolidated Indebtedness" shall mean the Indebtedness of the
Borrower and its Subsidiaries, determined on a consolidated basis.
"Consolidated Net Income" shall mean for any period the net income
(or loss) for such period (before extraordinary items and excluding the net
income of any business entity that is not a Subsidiary in which the Borrower or
one of its Subsidiaries has an ownership interest unless such net income shall
have actually been received by such company in the form of cash distributions)
of the Borrower and its Subsidiaries after deducting all operating expenses,
depreciation and amortization, Interest Expense, the interest portion of
Financing Lease Obligations, all taxes in respect of income and profits paid or
payable (including accrued Sub S distributions required to make shareholder tax
payments) and all other proper deductions, all determined on a consolidated
basis.
"Consolidated Operating Cash Flow" shall mean for any period, the
net income (or loss) for such period (before extraordinary items and excluding
the net income of any business entity that is not a Subsidiary in which the
Borrower or one of its Subsidiaries has an ownership interest unless such net
income shall have actually been received by the Borrower or Subsidiary, as the
case may be, in the form of cash distributions) of the Borrower and its
Subsidiaries before deducting Interest Expense and taxes and after restoring
thereto depreciation of real and personal property and leasehold improvements
and amortization and after deducting cash taxes paid, Sub S distributions
required to make shareholder tax payments, and capital expenditures incurred,
provided that capital expenditures shall not include real estate purchases
funded by debt.
"Consolidated Tangible Net Worth" shall mean, at any time, the
stockholders' equity of the Borrower and its Subsidiaries determined in
accordance with generally accepted accounting principles including the book
amount of all minority interests in MKS International, Inc. but excluding the
book amount of all minority interests in other Affiliates and any foreign
exchange translation adjustment, with no upward adjustments due to a
reevaluation of assets (other than any such upward adjustment as may be required
under generally accepted accounting principles in connection with the
acquisition by the Borrower or any Subsidiary of another company or entity)
minus the following items (without duplication of deductions) appearing on the
balance sheet of the Borrower and its Subsidiaries:
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(a) the book amount of all assets (including, without limitation,
goodwill, patents, trademarks, copyrights, organizational expense and
unamortized debt discount) that would be treated as intangibles under generally
accepted accounting principles;
(b) treasury stock; and
(c) any write-up in the book amount of any asset or Investment
subsequent to the Closing Date, resulting from a reevaluation or reappraisal
thereof from the amount entered in accordance with generally accepted accounting
principles by the Borrower or any Subsidiary on its books with respect to its
acquisition of the asset or Investment.
"Costs" shall have the meaning set forth in Section 10.4.
"Debt-to-Net Worth Ratio" shall have the meaning set forth in
Section 7.7(b).
"Default" shall mean any event that, with the lapse of time, the
giving of notice, or both, would become an Event of Default hereunder.
"Event of Default" shall have the meaning set forth in Section 8.1
hereof.
"Existing Loan Agreements" shall mean the Loan Agreements between
the Borrower and the Bank of Boston dated November 1, 1993 and October 31, 1995,
respectively.
"Financing Lease" shall mean any lease of the Borrower or a
Subsidiary, as lessee, that is shown or is required to be shown in accordance
with generally accepted accounting principles as a liability on the balance
sheet of the lessee thereunder.
"Financing Lease Obligation" shall mean for any period the monetary
obligation of the lessee under a Financing Lease. The amount of a Financing
Lease Obligation at any date is the amount at which the lessee's liability under
the Financing Lease would be required to be shown on its balance sheet at such
date.
"Hazardous Substances" shall mean any hazardous waste, as defined by
42 U.S.C. Section 6903(5), any hazardous substances, as defined by 42 U.S.C.
Section 601(14), any pollutant or contaminant, as defined by 42 U.S.C. Section
9601(33), or any toxic substance, oil or hazardous materials or other chemicals
or substances regulated by any laws or regulations relating to the discharge of
air pollutants, water pollutants, or processed wastewater.
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"Indebtedness" shall mean, for any Person, (a) all obligations of
such Person that in accordance with generally accepted accounting principles
would be reflected on the balance sheet of such Person as a liability, (b) all
obligations of any other Person the payment or collection of which such Person
has guaranteed (except by reason of endorsement for collection in the ordinary
course of business) or in respect of which such Person is liable, contingently
or otherwise, including, without limitation, liable by way of agreement to
purchase, to provide funds for payment, to supply funds to or otherwise to
invest in such other Person, or otherwise to assure a creditor against loss, (c)
all obligations of any other Person for borrowed money or for the deferred
purchase price of property or services secured by (or for which the holder of
such indebtedness has an existing right, contingent or otherwise, to be secured
by) any mortgage, or other encumbrance upon or in property (including, without
limitation, accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such indebtedness or
obligations, and (d) Financing Lease Obligations of such Person.
"Interest Expense" shall mean for any period the aggregate amount of
interest recorded, in accordance with generally accepted accounting principles,
on the financial statements for that period by the Borrower and its Subsidiaries
in respect of Consolidated Indebtedness incurred for borrowed money.
"Interest Period" shall mean the period designated by the Borrower
as such in the Notice of Borrowing with respect to any LIBOR Loan pursuant to
and subject to the limitations set forth in Section 2.5.
"Interest Rate Determination Date" shall mean the third Business Day
prior to the first day of the related Interest Period for a LIBOR Loan.
"Interim Maturity Date" shall mean the last day of any Interest
Period.
"Investments" shall have the meaning set forth in Section 7.4.
"IPO" shall mean the initial underwritten public offering pursuant
to an effective registration statement under the Securities Act of 1933, as
amended, covering the offer and sale of the Borrower's Common Stock for the
account of the Borrower.
"LIBOR Loan" shall mean an Advance that is specified as such in the
Notice of Borrowing with respect to such Advance and that bears interest at the
adjusted LIBOR Rate.
"LIBOR Rate" shall mean for any Interest Rate Determination Date,
the rate obtained by dividing (i) the quotation offered by the Agent in the
interbank Eurodollar market for U.S. dollar deposits of amounts in immediately
available funds
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comparable to the principal amount of the LIBOR Loan for which the LIBOR Rate is
being determined with a maturity comparable to the Interest Period for which
such LIBOR Rate will apply as of approximately noon (Boston time) three Business
Days prior to the commencement of such Interest Period by (ii) a percentage
equal to 100% minus the stated maximum rate of all reserves required to be
maintained against "Eurocurrency liabilities" as specified in Regulation D (or
against any other category of liabilities that includes deposits by reference to
which the interest rate on LIBOR Loans is determined) as applicable on such date
to any member bank of the Federal Reserve System.
"Licenses" shall have the meaning set forth in Section 4.8.
"Lien" shall mean any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property, whether
the interest is based on common law, statute or contract (including the security
interest lien arising from a mortgage, encumbrance, pledge, conditional sale or
trust receipt or a lease, consignment or bailment for security purposes). For
the purposes of this Agreement, the Borrower or a Subsidiary shall be deemed to
be the owner of any property that it has acquired or holds subject to a
Financing Lease or a conditional sale agreement or other arrangement pursuant to
which title to the property has been retained by or vested in some other Person
for security purposes, and such retention or vesting shall be deemed to be a
Lien.
"Loan Documents" shall mean each of this Agreement, the Notes and
any other document or instrument executed by the Borrower in favor of the
Lenders in connection with the transactions contemplated hereby.
"Note" shall mean a Revolving Credit Note.
"Notice of Borrowing" shall have the meaning set forth in Section
2.2.1.
"Obligations" shall mean, without limitation, any and all
liabilities, debts, and obligations of the Borrower to each of the Lenders, of
each and every kind, nature and description, arising under this Agreement or any
other Loan Document, whether now existing or hereafter incurred. "Obligations"
also means, without limitation, any and all obligations of the Borrower to act
or to refrain from acting in accordance with the terms, provisions and covenants
of this Agreement or of any other Loan Document.
"Permitted Liens" shall have the meaning set forth in Section 7.2.
"Person" shall mean any natural person, corporation, unincorporated
organization, trust, joint-stock company, joint venture, association, company,
partnership or government, or any agency or political subdivision of any
government.
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"Required Lenders" shall mean, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating at least 66-2/3% of the
aggregate Credit Exposures of all the Lenders on such date. For purposes of the
preceding sentence, the "Credit Exposure" of each Lender shall mean the
aggregate principal amount of the Advances owing to such Lender plus the
aggregate unutilized amounts of such Lender's Revolving Credit Commitment.
"Revolver Termination Date" shall mean June 30, 1999 or any
subsequent anniversary thereof if the Total Revolving Credit Commitment shall
have been renewed by the Lenders.
"Revolving Credit Commitment" means, with respect to each Lender,
the obligation of such Lender to make Advances to the Borrower up to an
aggregate principal amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Revolving Credit Commitment.
"Revolving Credit Facility" shall mean the loan arrangement
described in Article II of this Agreement, subject to all other applicable terms
of this Agreement.
"Revolving Credit Note" shall have the meaning set forth in Section
2.3.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Advances then outstanding
and all interest accrued thereon.
"Revolving Loan Account" shall mean the account on the books of the
Agent in the name of the Borrower in which the following shall be recorded:
Advances made by the Lenders to and for the account of the Borrower pursuant to
Section 2 of this Agreement; all other charges, expenses and other items
properly chargeable to the Borrower with respect to such Advances; all Costs
with respect to such Advances; all payments made by the Borrower on account of
Indebtedness evidenced by the Revolving Credit Notes; and other appropriate
debits and credits.
"Subsidiary" shall mean any Person of which the Borrower at the time
owns, directly or indirectly, through another Subsidiary or otherwise, 50% or
more of the equity interests.
"Sub S Dividends" shall mean one or more distributions by the
Borrower to its shareholders who were shareholders prior to the IPO in an
aggregate amount equal to the Borrower's "accumulated adjustments account," as
defined in Section 1368(a)(1) of the Internal Revenue Code of 1986, as of the
date of the IPO.
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"Total Revolving Credit Commitment" shall mean a principal amount
equal to $20,000,000.
1.2. Accounting Terms. Accounting terms not specifically defined in this
Agreement shall have the meanings given to them under generally accepted
accounting principles.
1.3. Other Definitional Provisions. The words "hereof," "herein" and
"hereunder," and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not any particular provision of this Agreement.
Any Article, Section, Exhibit or Schedule references are to this Agreement
unless otherwise specified.
ARTICLE II
REVOLVING CREDIT FACILITY
2.1. Revolving Credit. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances from time to time to
the Borrower during the period from the date hereof to the Revolver Termination
Date on a pro rata basis as to the total Borrowing requested by the Borrower on
any day determined by such Lender's Applicable Commitment Percentage up to but
not exceeding the Revolving Credit Commitment of such Lender, provided, however,
that the Lenders will not be required and shall have no obligation to make any
such Advance (i) so long as a Default or an Event of Default has occurred and is
continuing or (ii) if the Agent has accelerated the maturity of any of the Notes
as a result of an Event of Default; provided further, however, that immediately
after giving effect to each such Advance, the aggregate principal amount of
Revolving Credit outstandings shall not exceed the Total Revolving Credit
Commitment. Within such limits and subject to the terms and conditions hereof,
the Borrower may borrow, repay and reborrow under the Revolving Credit Facility
on any Business Day from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolver Termination Date. All Advances shall
be due and payable no later than the Revolver Termination Date. Each Advance
shall, at the option of the Borrower, be a Base Rate Loan or a LIBOR Loan
provided, however, that no LIBOR Loan having an Interest Period of 2, 3 or 6
months shall be made at any time in a principal amount of less than $1,250,000
and no LIBOR Loan having an Interest Period of 1 month shall be made at any time
in a principal amount of less than $1,000,000.
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2.2. Advances.
2.2.1. Whenever the Borrower desires to obtain a LIBOR Loan
hereunder, it may request that the Agent provide quotes as of any specified
Interest Rate Determination Date as to the LIBOR Rate for any or all Interest
Periods, and the Agent shall promptly provide such quotes. The Borrower shall
give the Agent prior telecopied or telephone notice (given not later than 11:00
a.m. (Boston time)) on the day of any Borrowing with respect to a Base Rate Loan
and at least three Business Days prior to the day of any Borrowing with respect
to a LIBOR Loan. Each such notice (each a "Notice of Borrowing") shall specify
the principal amount of each Advance to be made, the date of the Borrowing
(which shall be a Business Day), whether each Advance being made is to be
initially maintained as a Base Rate Loan or a LIBOR Loan and, in the case of a
LIBOR Loan, the initial Interest Period applicable thereto. If such notice is
given by telephone, it shall be immediately confirmed in writing. Notice of
receipt of a Notice of Borrowing, together with the amount of each Lender's
portion of an Advance requested thereunder, shall be provided by the Agent to
each Lender by facsimile transmission with reasonable promptness on the day the
Agent receives the Notice of Borrowing. No more than one Base Rate Loan shall be
outstanding at any time, but the Borrower may increase the principal amount of
any Base Rate Loan at any time by giving a Notice of Borrowing as set forth
above.
2.2.2. No later than 3:00 p.m. on the Advance Date, each Lender
shall, pursuant to the terms and subject to the conditions of this Agreement,
make the amount of the Advance or Advances to be made by it on such day
available by wire transfer to the Agent in the amount of its pro rata share,
determined according to such Lender's Applicable Commitment Percentage of the
Advance or Advances to be made on such day. Such wire transfer shall be directed
to the Agent and shall be in the form of Dollars constituting immediately
available funds. The amount so received by the Agent shall, subject to the terms
and conditions of this Agreement, promptly be made available to the Borrower on
the date so specified by delivery of the proceeds thereof to the Revolving Loan
Account or otherwise as shall be directed in the applicable Notice of Borrowing
and reasonably acceptable to the Agent.
2.2.3. Upon the Interim Maturity Date of any LIBOR Loan, unless the
Borrower (i) shall have given the Agent a Notice of Borrowing in accordance with
Section 2.2.1 requesting that a new LIBOR Loan be made on such Interim Maturity
Date or (ii) shall have repaid such LIBOR Loan on such Interim Maturity Date,
the Borrower shall be deemed to have requested that the Lenders make a Base Rate
Loan to the Borrower on such Interim Maturity Date in an aggregate principal
amount equal to the aggregate principal amount of the LIBOR Loan maturing on
such Interim Maturity Date.
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2.3. Revolving Loan Account. The Advances made by each Lender from time to
time to the Borrower under this Agreement shall be evidenced by a Revolving
Credit Note in the form of Exhibit C hereto (each, a "Revolving Credit Note") in
the amount of such Lender's Revolving Credit Commitment. The Advances and the
amounts of all payments on the Revolving Credit Notes shall be recorded by the
Agent in the Revolving Loan Account of the Borrower. The debit balance of the
Revolving Loan Account shall represent the amount of the Borrower's indebtedness
to the Lenders from time to time by reason of Advances and other appropriate
charges hereunder. All statements regarding the Revolving Loan Account shall be
deemed to be accurate absent manifest error or unless objected to by the
Borrower within 30 days after receipt. The Borrower agrees to review each such
statement promptly after receipt and to bring any errors or discrepancies to the
Agent's attention promptly.
2.4. Interest.
2.4.1. The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Advance from the date the proceeds thereof are made
available to the Borrower until maturity (whether by acceleration, voluntary
prepayment or otherwise) as follows. Each Advance shall bear interest at the
Base Rate in effect from time to time unless the Borrower elects and qualifies
to pay interest on such Advance at the following rate (the "Adjusted LIBOR
Rate"):
(i) During any period in which the Borrower maintains a
Debt-to-Net Worth Ratio of less than 1 to 1:
(a) and a Cash Flow Ratio of less than 1.75 to 1, the
LIBOR Rate plus 1.125%;
(b) and a Cash Flow Ratio of 1.75 to 1 or greater up to
and including 2.5 to 1, the LIBOR Rate plus .875%; or
(c) and a Cash Flow Ratio in excess of 2.5 to 1, the
LIBOR Rate plus .625%;
(ii) During any period in which the Borrower maintains a
Debt-to-Net Worth Ratio of 1 to 1 or more but less than or equal to 1.5 to
1:
(a) and a Cash Flow Ratio of less than 1.75 to 1, the
LIBOR Rate plus 1.25%;
(b) and a Cash Flow Ratio of 1.75 to 1 or greater up to
and including 2.5 to 1, the LIBOR Rate plus 1.00%; or
(c) and a Cash Flow Ratio in excess of 2.5 to 1, the
LIBOR Rate plus .75%.
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2.4.2. Overdue principal and (to the extent permitted by law)
overdue interest in respect of each Base Rate Loan and each LIBOR Loan (to the
extent not converted into a Base Rate Loan) shall bear interest, payable on
demand, after as well as before judgment, at a rate per annum equal to the Base
Rate in effect from time to time plus 3% per annum.
2.4.3. Interest shall accrue from and including the date of any
Advance and shall be payable by the Borrower on each Advance in arrears on the
last day of each of the Borrower's fiscal quarters, on any prepayment (on the
amount prepaid), on any maturity date (whether by acceleration or otherwise),
and after such maturity, on demand. Interest shall be calculated on the basis of
actual days elapsed and a 360-day year.
2.5. Interest Periods. At the time it gives any Notice of Borrowing with
respect to a LIBOR Loan, the Borrower shall elect the Interest Period applicable
to the related Advance, which Interest Period shall, at the option of the
Borrower, be a period of 1, 2, 3 or 6 months. Notwithstanding anything to the
contrary contained herein:
(i) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(ii) if any Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that if any Interest Period
would otherwise expire on the day that is not a Business Day but is
a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(iii) no Interest Period shall extend beyond the Revolver
Termination Date.
2.6. Unused Commitment Fee. For the period beginning on the Closing Date
and ending on the Revolver Termination Date, the Borrower agrees to pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, an unused commitment fee equal to 0.25% per annum
multiplied by the average daily amount by which (a) the Total Revolving Credit
Commitment exceeds (b) the Revolving Credit Outstandings less all accrued and
unpaid interest. Such fees shall be due in arrears on the last Business Day of
each March, June, September and December commencing March 29, 1996 to and on the
Revolver Termination Date. Notwithstanding the foregoing, so long as any Lender
fails to make available any portion of its Revolving Credit Commitment when
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requested, such Lender shall not be entitled to receive payment of its pro rata
share of such fee for so long as such Lender shall not have made available such
portion. Such fee shall be calculated on the basis of a year of 360 days for the
actual number of days elapsed.
2.7. Deficiency Advances. No Lender shall be responsible for any default
of any other Lender in respect to such other Lender's obligation to make any
Advance nor shall the Revolving Credit Commitment of any Lender hereunder be
increased as a result of such default of any other Lender. Without limiting the
generality of the foregoing, in the event any Lender shall fail to advance funds
to the Borrower as herein provided, the Agent may in its discretion, but shall
not be obligated to, advance under the Revolving Credit Note in its favor as a
Lender all or any portion of such amount or amounts (each, a "deficiency
advance") and shall thereafter be entitled to payments of principal of and
interest on such deficiency advance in the same manner and at the same interest
rate or rates to which such other Lender would have been entitled had it made
such advance under its Revolving Credit Note; provided that, upon payment to the
Agent from such other Lender of the entire outstanding amount of each such
deficiency advance, together with accrued and unpaid interest thereon, from the
most recent date or dates interest was paid to the Agent by the Borrower on each
Advance comprising the deficiency advance at the rate of interest payable by the
Borrower and payment by such other Lender to Agent of customary late fees, then
such payment shall be credited against the applicable Revolving Credit Note of
the Agent in full payment of such deficiency advance and the Borrower shall be
deemed to have borrowed the amount of such deficiency advance from such other
Lender as of the most recent date or dates, as the case may be, upon which any
payments of interest were made by the Borrower thereon.
2.8. Termination of Existing Facilities. The outstanding Advances, if any,
under the Loan Agreement between the Borrower and Bank of Boston dated November
1, 1993 (the "1993 Agreement") shall be replaced on the date hereof by one or
more Advances under this Agreement and Borrower shall have no further right to
obtain, and Lender shall have no obligation to make, Advances under the 1993
Agreement. The $3,000,000 demand unsecured revolving credit facility made
available to the Borrower by Chemical Bank as set forth in a letter agreement
dated August 23, 1995 shall terminate on the date hereof.
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ARTICLE III
ADDITIONAL TERMS
3.1. Payments.
3.1.1. The Borrower shall have the right to prepay the Notes, in
whole at any time or in part from time to time, without premium or penalty,
provided that, except as set forth in Section 3.3, no Advance, either in whole
or in part, may be prepaid on the Advance Date of such Advance. The Borrower
shall give notice (by telex or telecopier, or by telephone (confirmed in writing
promptly thereafter)) to the Agent of each proposed prepayment hereunder prior
to 11:00 a.m. (Boston time), (x) with respect to Base Rate Loans, upon the
Business Day of the proposed prepayment and (y) with respect to LIBOR Loans, at
least three Business Days prior to the Business Day of the proposed prepayment,
which notice in each case shall specify the proposed prepayment date (which
shall be a Business Day), the aggregate principal amount of the proposed
prepayment and which Advances are to be prepaid. LIBOR Loans that are
voluntarily prepaid before the last day of the applicable Interest Period shall
be subject to the additional compensation requirements set forth in Section 3.3,
and each prepayment of a LIBOR Loan shall be in an aggregate principal amount of
not less than the total principal amount outstanding at such time under such
LIBOR Loan. If at any time the outstanding principal amount of the Advances
exceeds $20,000,000, the Borrower will immediately prepay the Advances by the
amount of such excess.
3.1.2. All payments of principal and interest due under the Notes
(including Prepayments), and any other amounts owing to the Lenders under this
Agreement shall be made by the Borrower not later than 2:30 p.m., Boston time,
on the day due in lawful money of the United States of America to the Agent at
its Boston, Massachusetts office in immediately available funds. The Borrower
hereby authorizes the Agent to charge such payments as they become due, if not
otherwise paid by the Borrower, to any account of the Borrower with the Agent as
the Agent may elect.
3.1.3. Whenever any payment to be made hereunder or under any other
Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case be included in computing interest or other fees or
charges provided for under this Agreement or any other Loan Document; provided,
however, that with respect to LIBOR Loans, if the next succeeding Business Day
falls in another calendar month, such payment shall be made on the next
preceding Business Day.
3.1.4. All payments made by the Borrower on the Notes shall be
applied by the Agent (a) first, to the payment of Costs with respect to the
Notes, (b)
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second, to the payment of accrued and unpaid interest on the Notes, until all
such accrued interest has been paid, and (c) third, to the payment of the unpaid
principal amount of the Notes. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Notes and the fees
described in Section 2.6 shall be made to the Agent for the account of the
Lenders pro rata based on their Applicable Commitment Percentages, (b) all
payments to be made by the Borrower for the account of each of the Lenders on
account of principal, interest and fees, shall be made without diminution,
setoff, recoupment or counterclaim, and (c) the Agent will promptly distribute
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from the Borrower.
3.2. Capital Adequacy.
3.2.1. If, after the date of this Agreement, a Lender shall have
reasonably determined in good faith that the adoption or effectiveness after the
date hereof of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of materially reducing the rate
of return on such Lender's capital or assets as a consequence of its commitments
or obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's then current policies with respect to capital
adequacy), then from time to time, subject to Section 3.2.2, within 15 days
after demand, the Borrower shall pay to the Agent for the account of such Lender
such additional amount or amounts as will compensate such Lender for such
reduction (after such Lender shall have allocated the same fairly and equitably
among all of its customers or any class generally affected thereby).
3.2.2. The Agent will notify the Borrower of any event occurring
after the date of this Agreement that will entitle a Lender to any additional
payment under this Section 3.2 as promptly as practicable. The Agent will
furnish to the Borrower with such notice a certificate signed by an officer of
the Lender requesting payment certifying that such Lender is entitled to payment
under this Section 3.2 and setting forth the basis (in reasonable detail) and
the amount of each request by such Lender for any additional payment pursuant to
this Section 3.2. Such certificate shall be conclusive in the absence of
manifest error. The Borrower shall not be obligated to compensate such Lender
pursuant to this Section for amounts accruing prior to the date that is 180 days
before such Agent notifies the Borrower of its obligations to compensate such
Lender for such amounts.
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3.3. Special Provisions Governing LIBOR Loans. Notwithstanding any other
provisions of this Agreement, the following provisions shall govern with respect
to LIBOR Loans as to the matters covered:
3.3.1. Increased Costs, Illegality, etc. (a) In the event that the
Agent shall have determined (which determination shall, if made in good faith
and absent manifest error, be final, conclusive and binding upon all parties):
(i) on any Interest Rate Determination Date, that by
reason of any changes arising after the date of this Agreement
affecting the interbank Eurodollar market, adequate and fair means
do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of LIBOR Rate; or
(ii) at any time during any Interest Period, that the
Lenders shall incur increased costs (including taxes) or reductions
in the amounts received or receivable hereunder with respect to a
LIBOR Loan by reason of (x) any change since the Interest Rate
Determination Date for the Interest Period in question in any
applicable law or governmental rule, regulation, guideline or order
(or any interpretation thereof and including the introduction of any
new law or governmental rule, regulation, guideline or order) (such
as, for example but not limited to, a change in official reserve
requirements, but excluding reserve requirements that have been
included in calculating the LIBOR Rate for such Interest Period)
and/or (y) other circumstances affecting any Lender, the interbank
Eurodollar market or the position of any Lender in the relevant
market; or
(iii) at any time, that the making or continuance of any
LIBOR Loan has become unlawful by compliance by the Lenders in good
faith with any law, governmental rule, regulation, guideline or
order, or has become impracticable as a result of a contingency
occurring after the date of this Agreement;
then and in any such event, the Agent shall promptly after making such
determination give notice (by telephone confirmed in writing) to the Borrower of
such determination. Thereafter (x) in the case of clause (i) above, any Notice
of Borrowing given by the Borrower with respect to a LIBOR Loan that has not yet
been incurred shall be deemed rescinded by the Borrower and LIBOR Loans shall no
longer be available until such time as the Agent notifies the Borrower that the
circumstances giving rise to such notice no longer exist or that,
notwithstanding such circumstances, LIBOR Loans will again be made available
hereunder, (y) in the case of clause (ii), the Borrower shall pay to the Agent,
upon written demand therefor (but only with respect to any LIBOR Loan made
pursuant to a Notice of Borrowing issued
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after the giving of the written notice that LIBOR Loans will again be made
available hereunder referred to in clause (x) above), such additional amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as the Agent in its sole discretion shall determine) as
shall be required to compensate the Lenders for such increased cost or reduction
in amount received (a written notice as to additional amounts owed the Lenders,
showing the basis for such calculation thereof, shall be given to the Borrower
by the Agent and shall, absent manifest error, be final, conclusive and binding
upon the parties hereto), and (z) in the case of clause (iii), the Borrower
shall take one of the actions specified in Section 3.3.1(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any LIBOR Loan is affected by the circumstances
described in Section 3.3.1(a)(ii) or (iii), the Borrower may (and in the case of
a LIBOR Loan affected pursuant to Section 3.3.1(a)(iii) shall) either (x) if the
affected LIBOR Loan is then being made, withdraw the related Notice of Borrowing
by giving the Agent telephonic (confirmed in writing) notice thereof on the same
date that the Borrower was notified by the Agent pursuant to Section 3.3.1(a),
or (y) if the affected LIBOR Loans are then outstanding, upon at least three
Business Days' written notice to the Agent, require the Agent to convert each
LIBOR Loan so affected into a Base Rate Loan.
3.3.2. Compensation. The Borrower shall compensate the Lenders, upon
the Agent's written request (which request shall set forth the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including, without limitation, any interest paid by the Lender to lenders of
funds borrowed by it to make or carry its LIBOR Loans to the extent not
recovered by the Lenders in connection with the re-employment of such funds) and
any loss sustained by any Lender in connection with the re-employment of the
funds (including, without limitation, a return on such re-employment that would
result in such Lender's receiving less than it would have received had such
LIBOR Loan remained outstanding until the last day of the Interest Period
applicable to such LIBOR Loan) that such Lender, may sustain: (i) if for any
reason (other than a default by or negligence of any Lender) a LIBOR Loan is not
advanced on a date specified therefor in a Notice of Borrowing (unless timely
withdrawn pursuant to Section 3.3.1(b)(x) above), (ii) if any payment or
prepayment of any LIBOR Loans occurs for any reason whatsoever (including,
without limitation, by reason of Section 3.3.1(b)) on a date that is prior to
the last day of an Interest Period applicable thereto, (iii) if any prepayment
of any of its LIBOR Loans is not made on the date specified in a notice of
payment given by the Borrower pursuant to Section 3.1 or (iv) as a consequence
of an election made by the Borrower pursuant to Section 3.3.1(b) (y).
3.4. Taxes. All payments made by the Borrower under this Agreement and any
Notes shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or other taxes, levies,
imposts,
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duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any governmental authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on any Lender as a result of a present or former connection between such
Lender and the jurisdiction of the governmental authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from such Lender's having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any Note). If any such non-excluded taxes, levies, imposts, duties,
charges, fees deductions or withholdings ("Non-Excluded Taxes") are required to
be withheld from any amounts payable to the Lenders hereunder or under any Note,
the amounts so payable to the Lenders shall be increased to the extent necessary
to yield to the Lenders (after payment of all Non-Excluded Taxes) interest or
any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement. Whenever any Non-Excluded Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Agent a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Lenders for any incremental taxes, interest or penalties that may
become payable to any Lenders as a result of any such failure. The agreements in
this subsection shall survive the termination of this Agreement and the payment
of the Advances and all other amounts payable hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
In order to induce the Lenders to enter into this Agreement and to make
the loans provided for herein, the Borrower makes the following representations
and warranties to the Lenders, all of which shall survive the execution and
delivery of this Agreement and the Notes.
4.1. Organization, Existence and Power. The Borrower is duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. The Borrower has the corporate power necessary to conduct the
business in which it is engaged, to own the properties owned by it and to
consummate the transactions contemplated by the Loan Documents. The Borrower is
duly qualified or licensed to transact business in all places where the nature
of the properties owned by it or the business conducted by it makes such
qualification necessary and where the failure to be so qualified or licensed
would have a material adverse effect upon the consolidated financial condition,
assets or results of operations of the Borrower and its Subsidiaries taken as a
whole.
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4.2. Authorization of Loan Documents; Binding Effect. The execution and
delivery of this Agreement and the other Loan Documents and the performance of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate actions of the Borrower. Each of the Loan Documents
constitutes the legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms.
4.3. Authority. The Borrower has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Loan
Documents. Neither the authorization, execution, delivery, or performance by the
Borrower of this Agreement or of any other Loan Document nor the performance of
the transactions contemplated hereby or thereby violates or will violate any
provision of the corporate charter or by-laws of the Borrower, or does or will,
with the passage of time or the giving of notice or both, result in a breach of
or a default under, or require any consent under or result in the creation of
any lien, charge or encumbrance upon any property or assets of the Borrower
pursuant to, any material instrument, agreement or other document to which the
Borrower is a party or by which the Borrower or any of its properties may be
bound or affected.
4.4. Capital Structure. The number of shares of stock of which the
Borrower's authorized capital stock consists, the par value per share of such
stock, the number of shares of such stock that have been issued and are
outstanding and the number of shares that have been issued and are held by the
Borrower as treasury shares are all disclosed on the Disclosure Schedule. Set
forth in the Disclosure Schedule is a complete and accurate list of all
Subsidiaries of the Borrower. The Disclosure Schedule indicates the jurisdiction
of incorporation or organization of each of the Subsidiaries, the number of
shares or units of each class of capital stock or other equity of the
Subsidiaries authorized, and the number of such shares or units outstanding and
the percentage of each class of such equity owned (directly or indirectly) by
the Borrower. No shares of stock or units of equity interests of the Borrower or
any of its Subsidiaries are covered by outstanding options, warrants, rights of
conversion or purchase or similar rights granted or created by the Borrower
except as set forth on the Disclosure Schedule. All the outstanding capital
stock of the Borrower has been validly issued and is fully paid and
nonassessable. All the stock or units of equity interests of the Borrower's
Subsidiaries that are owned by the Borrower or any Subsidiary of the Borrower
are owned free and clear of all mortgages, deeds of trust, pledges, liens,
security interests and other charges or encumbrances.
4.5. Financial Condition. The audited consolidated balance sheet of the
Borrower and its Subsidiaries dated as of December 31, 1995 (the "Balance Sheet
Date") and the audited statements of operations, cash flows and stockholders'
equity of the Borrower and its Subsidiaries for and as of the end of the period
ending on that date, including any related notes (the "Financial Statements"),
all of which were
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heretofore furnished to the Lenders, are true, correct and complete in all
material respects and fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the date of each such
statement and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved.
Other than as reflected in such Financial Statements and except for liabilities
incurred in the ordinary course of business since the date thereof, the Borrower
has no Indebtedness that is or would be material to the financial condition of
the Borrower, nor any material unrealized or unanticipated losses from any
commitments. Since the Balance Sheet Date there has been no material adverse
change in the consolidated financial condition (as set forth in the Financial
Statements) or results of operations of the Borrower and its Subsidiaries taken
as a whole.
4.6. Pending Litigation. Except as set forth in the Disclosure Schedule,
there are no suits or proceedings pending or, to the knowledge of the Borrower,
threatened before any court or arbitration tribunal or by or before any
governmental or regulatory authority, commission, bureau or agency or public
regulatory body against the Borrower that if adversely determined would have a
material adverse effect on the consolidated financial condition, assets or
results of operations of the Borrower and its Subsidiaries taken as a whole.
4.7. Certain Agreements; Material Contracts. The Borrower is not a party
to any agreement or instrument or subject to any court order or governmental
decree adversely affecting in any material respect the business, properties,
assets or financial condition of the Borrower and its Subsidiaries taken as a
whole.
4.8. Authorization, Etc. All authorizations, consents, approvals,
accreditations, certifications and licenses required under the corporate charter
or by-laws of the Borrower or under applicable law or regulation for the
ownership or operation of the property owned or operated by the Borrower or the
conduct of any business or activity conducted by the Borrower, including
provision of services for which reimbursement is made by third party payors,
other than authorizations, consents, approvals, accreditations, certifications
or licenses the failure to obtain and/or maintain which would not have a
material adverse effect on the consolidated financial condition, assets or
results of operations of the Borrower and its Subsidiaries taken as a whole
(collectively, "Licenses") have been duly issued and are in full force and
effect. The Borrower has fulfilled and performed all of its material obligations
with respect to such licenses (to the extent now required to be fulfilled or
performed) and no event has occurred that would allow, with or without the
passage of time or the giving of notice or both, revocation or termination
thereof or would result in any other material impairment of the rights of the
holder of any such License. All filings or registrations with any governmental
or regulatory authority required for the conduct of the business or activity
conducted by the Borrower have been made, other than any such filings or
registrations as to which the failure to make same would not
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have a material adverse effect on the consolidated financial condition, assets
or results of operations of the Borrower and its Subsidiaries, taken as a whole.
Except as expressly contemplated hereby, no approval, consent or authorization
of or filing or registration with any governmental commission, bureau or other
regulatory authority or agency is required with respect to the execution,
delivery or performance of any of the Loan Documents.
4.9. No Violation. The execution, delivery and performance by the Borrower
of the Loan Documents do not and will not violate any provision of law or
regulation applicable to the Borrower, or any writ, order or decree of any court
or governmental or regulatory authority or agency applicable to the Borrower.
The Borrower is not in default, nor has any event occurred that with the passage
of time or the giving of notice, or both, would constitute a default, in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement, instrument or other document to which the
Borrower is a party, which default would have a material adverse effect on the
consolidated assets, financial condition or results of operations of the
Borrower and its Subsidiaries, taken as a whole. The Borrower is not in
violation of any applicable federal, state or local law, rule or regulation or
any writ, order or decree, which violation would have a material adverse effect
on the consolidated assets, financial condition or results of operations of the
Borrower and its Subsidiaries, taken as a whole. Except as otherwise set forth
in the Disclosure Schedule under the caption "Litigation," the Borrower has not
received notice of any violation of any federal, state or local environmental
law, rule or regulation or assertion that the Borrower has any obligation to
clean up or contribute to the cost of cleaning up any waste or pollutants.
4.10. Payment of Taxes. The Borrower and its Subsidiaries have properly
prepared and filed or caused to be properly prepared and filed all federal tax
returns and all material state and local tax returns that are required to be
filed and have paid all taxes shown thereon to be due and all other taxes,
assessments and governmental charges or levies imposed upon the Borrower and its
Subsidiaries, their income or profits or any properties belonging to the
Borrower. No extensions of any statute of limitations are in effect with respect
to any tax liability of the Borrower or any Subsidiary of the Borrower. No
deficiency assessment or proposed adjustment of the federal income taxes of the
Borrower or any Subsidiary of the Borrower is pending and the Borrower has no
knowledge of any proposed liability of a substantial nature for any tax to be
imposed upon any of its properties or assets.
4.11. Transactions With Affiliates, Officers, Directors and 1%
Shareholders. Except as set forth on the Disclosure Schedule, the Borrower has
no Indebtedness to or material contractual arrangement or understanding with any
Affiliate, officer or director of the Borrower, nor any shareholder holding of
record at least 1% of the equity of the Borrower nor, to the best of the
Borrower's knowledge (without independent inquiry), any of their respective
relatives.
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4.12. ERISA. The Borrower has never established or maintained any funded
employee pension benefit plan as defined under Section 3(2)(A) of the Employee
Retirement Income Security Act of 1974, as amended and in effect on the date
hereof ("ERISA"), other than the plans described on the Disclosure Schedule. No
employee benefit plan established or maintained, or to which contributions have
been made, by the Borrower or any Subsidiary of the Borrower that is subject to
Part 3 of Title I-B of ERISA, had an accumulated funding deficiency (as such
term is defined in Section 302 of ERISA) as of the last day of the fiscal year
of such plan ended most recently prior to the date hereof, or would have had an
accumulated funding deficiency (as so defined) on such day if such year were the
first year of the plan to which Part 3 of Title I-B of ERISA applied. No
material liability to the Pension Benefit Guaranty Corporation has been incurred
or is expected by the Borrower to be incurred by it or any Subsidiary of the
Borrower with respect to any such plan or otherwise. The execution, delivery and
performance of this Agreement and the other Loan Documents will not involve on
the part of the Borrower any prohibited transaction within the meaning of ERISA
or Section 4975 of the Internal Revenue Code. The Borrower has never maintained,
contributed to or been obligated to contribute to any "multiemployer plan," as
defined in Section 3(37) of ERISA. The Borrower has never incurred any
"withdrawal liability" calculated under Section 4211 of ERISA, and there has
been no event or circumstance that would cause it to incur any such liability.
4.13. Ownership of Properties; Liens. The Borrower has good and marketable
title to all its material properties and assets, real and personal, that are now
carried on its books, including, without limitation, those reflected in the
Financial Statements (except those disposed of in the ordinary course since the
date thereof), and has valid leasehold interests in its properties and assets,
real and personal, which it purports to lease, subject in either case to no
mortgage, security interest, pledge, lien, charge, encumbrance or title
retention or other security agreement or arrangement of any nature whatsoever
other than Permitted Liens and those specified in the Disclosure Schedule. All
of the Borrower's material leasehold interests and material obligations with
respect to real property are described on the Disclosure Schedule.
4.14. Employment Matters. Except as set forth on the Disclosure Schedule,
there are no material grievances, disputes or controversies pending or, to the
knowledge of the Borrower, threatened between the Borrower and its employees,
nor is any strike, work stoppage or slowdown pending or threatened against the
Borrower.
4.15. Insurance. The Borrower maintains in force fire, casualty,
comprehensive liability and other insurance covering its properties and business
that is adequate and customary for the type and scope of its properties and
business.
4.16. Indebtedness. Except as reflected in the Financial Statements or set
forth in the Disclosure Schedule, and other than Indebtedness incurred in the
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ordinary course of business since the Balance Sheet Date, the Borrower has no
outstanding Indebtedness.
4.17. Securities Law Compliance. The Borrower is not an "investment
company" as defined in the Investment Company Act of 1940, as amended. All of
the Borrower's outstanding stock was offered, issued and sold in compliance with
all applicable state and federal securities laws.
4.18. Accuracy of Information. None of the information furnished to the
Lenders by or on behalf of the Borrower for purposes of this Agreement or any
Loan Document or any transaction contemplated hereby or thereby contains, and
none of such information hereinafter furnished will contain any material
misstatement of fact, nor does or will any such information omit any material
fact necessary to make such information not misleading at such time.
ARTICLE V
CONDITIONS TO ADVANCES
The Lenders shall not be obligated to make any Advances unless the
following conditions have been satisfied:
5.1. Each Advance. The obligations of the Lenders to make each Advance are
subject to the following conditions precedent, each of which shall have been met
or performed on or before the Advance Date or the Closing Date, as the case may
be:
(a) No Default. No Default or Event of Default shall have occurred
and be continuing or will occur upon the making of the Advance.
(b) Correctness of Representations. The representations and
warranties made by the Borrower in this Agreement shall be true and correct with
the same force and effect as though such representations and warranties had been
made on and as of the Advance Date (i) except to the extent that the
representations and warranties set forth in Article IV of this Agreement are
untrue as a result of circumstances that have changed subsequent to the date
hereof, which change has caused no non-compliance by the Borrower with the
covenants, conditions and agreements in this Agreement and (ii) except that the
references in Section 4.5 of this Agreement to the financial statements and the
term "Balance Sheet Date" are deemed to refer to the most recent financial
statements (inclusive of consolidated balance sheets and statements of
operations, cash flows and stockholders' equity of the Borrower and its
Subsidiaries) furnished to the Lenders pursuant to Section 6.1(a) and (b) of
this Agreement and the date of such financial statements, respectively.
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(c) No Litigation; Certain Other Conditions. There shall be no suit
or proceeding (other than suits or proceedings disclosed on the Disclosure
Schedule on the date of this Agreement) pending or threatened before any court
or arbitration tribunal or by or before any governmental or regulatory
authority, commission, bureau or agency or public regulatory body that, if
determined adversely to the Borrower or any Subsidiary of the Borrower, is
reasonably likely to have a material adverse effect on the consolidated
financial condition or results of operations of the Borrower and its
Subsidiaries taken as a whole.
(d) No Material Adverse Change. There shall have been no material
adverse change in the consolidated financial condition or results of operations
of the Borrower and its Subsidiaries taken as a whole since the Balance Sheet
Date.
(e) Loan Documents. All Loan Documents shall be in full force and
effect.
5.2. First Advance. The obligations of the Lenders to make the first
Advance are subject to the following additional conditions precedent, each of
which shall have been met or performed on or before the Closing Date:
(a) Deliveries. The Agent shall have received, in form and substance
satisfactory to the Agent and Lenders, the following:
(i) an opinion or opinions of independent counsel to the
Borrower with respect to the Loan Documents and the transactions
contemplated thereby;
(ii) certificates as to the Borrower's legal existence and
good standing under the laws of The Commonwealth of Massachusetts, and
certificates as to the Borrower's authority to do business as a foreign
corporation in the States of Arizona, California, Colorado, Connecticut,
Florida, Illinois, Maryland, Michigan, New Jersey, New Mexico, New York,
Oregon, Pennsylvania and Texas, each dated as of a recent date;
(iii) a certificate of the Borrower's Clerk as to (i) its
charter documents and by-laws, as amended, (ii) corporate votes
authorizing the execution and delivery of the Loan Documents, and (iii)
incumbency of the officers authorized to execute the Loan Documents on
behalf of the Borrower;
(iv) a Revolving Credit Note to the order of each Lender, each
duly executed by the Borrower and otherwise appropriately completed;
(v) a certificate duly executed by the Borrower's chief
financial officer dated the Advance Date or Closing Date, as the case may
be, to the
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effect that each of the conditions set forth in the foregoing Section 5.1
has been met as of such date.
(b) All Proceedings Satisfactory. All corporate and other
proceedings taken prior to or on the Closing Date in connection with the
transactions contemplated by this Agreement, and all documents and exhibits
related thereto, shall be reasonably satisfactory in form and substance to the
Agent and the Lenders.
(c) Additional Documents. The Borrower shall have delivered to the
Agent all additional opinions, documents and certificates that the Agent or any
Lender may reasonably require.
ARTICLE VI
AFFIRMATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that from the date of execution of this
Agreement and until the payment in full of the principal of and interest upon
the Notes and payment and performance of all other Obligations, unless the
Required Lenders shall otherwise consent in writing:
6.1. Reporting Requirements. The Borrower shall furnish to the Lenders:
(a) As soon as available and in any event within forty-five days
after the end of each of the first three quarters of each fiscal year of the
Borrower and its Subsidiaries, (i) a consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as of the end of such quarter and
(ii) consolidated and consolidating statements of operations, cash flows and
stockholders' equity of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, all in reasonable detail and duly certified by the chief financial
officer of the Borrower as having been prepared in accordance with generally
accepted accounting principles consistently applied (subject to addition of
notes and ordinary year-end audit adjustments), together with a certificate of
the chief financial officer of the Borrower stating that no Default or Event of
Default has occurred and is continuing or, if a Default or an Event of Default
has occurred and is continuing, a statement as to the nature thereof and the
action that the Borrower proposes to take with respect thereto;
(b) As soon as available and in any event within ninety days after
the end of each fiscal year of the Borrower, the audited consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such fiscal year and
the audited consolidated statements of operations, cash flows and stockholders'
equity of the Borrower and its Subsidiaries for such fiscal year, in each case
accompanied by the
-24-
unqualified opinion with respect thereto of the Borrower's independent public
accountants and a certification by such accountants stating that they have
reviewed this Agreement and whether, in making their audit, they have become
aware of any Default or Event of Default and if so, describing its nature, along
with the related unaudited consolidating balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal year and the unaudited consolidating
statements of operations, cash flows and stockholders' equity of the Borrower
and its Subsidiaries for such fiscal year;
(c) Not later than forty-five days following the end of each fiscal
quarter a certificate signed by the chief financial officer of the Borrower
substantially in the form of Exhibit D hereto (the "Compliance Certificate");
(d) Not later than thirty days after the end of each fiscal year of
the Borrower, the Borrower's representative forecast for the next fiscal year on
a consolidated basis, including, at a minimum, projected statements of profit
and loss and projected cash flow, prepared in accordance with generally accepted
accounting principles consistently applied;
(e) Promptly upon receipt thereof, one copy of each other report
submitted to the Borrower or any Subsidiary by independent accountants in
connection with any annual, interim or special audit made by them of the books
of the Borrower or any Subsidiary;
(f) Promptly after the commencement thereof, notice of all actions,
suits and proceedings before any court, arbitration tribunal or governmental
regulatory authority, commission, bureau, agency or public regulatory body that,
if determined adversely to the Borrower or any Subsidiary of the Borrower, would
be reasonably likely to have a material adverse effect on the consolidated
financial condition or results of operations of the Borrower and its
Subsidiaries taken as a whole;
(g) As soon as possible, and in any event within five days after the
Borrower shall know of the occurrence of any Default or Event of Default, the
written statement of the chief financial officer of the Borrower setting forth
details of such Default or Event of Default and action that the Borrower
proposes to take with respect thereto;
(h) As soon as possible, and in any event within five days after the
occurrence thereof, written notice as to any other event of which the Borrower
becomes aware that with the passage of time, the giving of notice or otherwise,
is reasonably likely to result in a material adverse change in the consolidated
financial condition or results of operations of the Borrower and its
Subsidiaries taken as a whole; and
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(i) Such other information respecting the business or properties or
the condition or operations, financial or otherwise, of the Borrower as any
Lender may from time to time reasonably request.
6.2. Loan Proceeds. The Borrower shall use the proceeds of the Advances
only for the purpose of general working capital, acquisitions not prohibited
hereby and capital expenditures.
6.3. Maintenance of Business and Properties; Insurance.
(a) The Borrower will continue to engage in business of the same
general nature as the business currently engaged in by the Borrower. The
Borrower will at all times maintain, preserve and protect all material
franchises and trade names and preserve all the Borrower's material tangible
property used or useful in the conduct of its business and keep the same in good
repair, working order and condition, ordinary wear and tear excepted, and from
time to time make all needful and proper repairs, renewals, replacements,
betterments, and improvements thereto so that the business carried on in
connection therewith may be conducted properly and advantageously at all times.
(b) The Borrower will keep all of its insurable properties now or
hereafter owned adequately insured at all times against loss or damage by fire
or other casualty to the extent customary with respect to like properties of
companies conducting similar businesses and to the extent available at
commercially reasonable rates; and will maintain public liability and workmen's
compensation insurance insuring the Borrower to the extent customary with
respect to companies conducting similar businesses and to the extent available
at commercially reasonable rates, all by financially sound and reputable
insurers. The Borrower shall furnish to the Agent from time to time at the
Agent's request copies of all such insurance policies and certificates
evidencing such insurance coverage. Notwithstanding the foregoing, the Borrower
may self-insure workmen's compensation to the extent permitted by law and may
also self-insure other risks to the extent reasonably deemed prudent by the
Borrower.
6.4. Payment of Taxes. The Borrower shall pay and discharge, or cause to
be paid and discharged, all material taxes, assessments, and governmental
charges or levies imposed upon the Borrower and its Subsidiaries or their income
or profits, or upon any other properties belonging to the Borrower prior to the
date on which penalties attach thereto, and all lawful claims that, if unpaid,
might become a lien or charge upon any material properties of the Borrower,
except for such taxes, assessments, charges, levies or claims as are being
contested by the Borrower in good faith by appropriate proceedings promptly
initiated and diligently prosecuted, for which adequate book reserves have been
established in accordance with generally accepted accounting principles, as to
which no foreclosure, distraint, sale or other
-26-
similar proceedings shall have been commenced, or, if commenced, have been
effectively stayed.
6.5. Compliance with Laws, etc. The Borrower shall comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, and obtain or maintain all Licenses required under
applicable law or regulation for the operation of the Borrower's business, where
noncompliance or failure to obtain or maintain would have a material adverse
effect on the consolidated financial condition, assets, or results of operations
of the Borrower and its Subsidiaries taken as a whole; provided, however, that
such compliance or the obtaining of such Licenses may be delayed while the
applicability or validity of any such law, rule, regulation or order or the
necessity for obtaining any such License is being contested by the Borrower in
good faith by appropriate proceedings promptly initiated and diligently
prosecuted.
6.6. Books, Records and Accounts. The Borrower shall keep true and correct
books, records and accounts, in which entries will be made in accordance with
generally accepted accounting principles consistently applied, and that shall
comply with the requirements of the Foreign Corrupt Practices Act of 1977 to the
extent applicable to the Borrower. Each Lender or its representatives shall upon
reasonable notice to the Borrower be afforded, during normal business hours,
access to and the right to examine and copy any such books, records and accounts
and the right to inspect the Borrower's premises and business operations. All
financial and other information with respect to the Borrower and/or any of its
Subsidiaries now or hereafter obtained by any Lender under this Agreement or
otherwise in connection with any of the transactions contemplated hereunder
shall be held in confidence and shall not be released or made available to any
other Person, except (i) to governmental agencies (and examiners employed by
same) having oversight over the affairs of such Lender, (ii) pursuant to
subpoena or similar process issued by a court or governmental agency of
competent jurisdiction, or (iii) as otherwise directed by order of any court or
governmental agency of competent jurisdiction.
6.7. Further Assurances. The Borrower shall execute and deliver, at the
Borrower's expense, all notices and other instruments and documents and take all
actions, including, but not limited to, making all filings and recordings, that
any Lender shall reasonably request in order to assure to the Lenders all rights
given to the Lenders hereby or under any other Loan Document.
6.8. Bank Accounts. The Borrower shall maintain its principal operating
accounts with the Agent.
ARTICLE VII
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NEGATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that from the date of execution of this
Agreement and until the payment in full of the principal of and interest upon
the Notes and payment and performance of all other Obligations, unless the
Required Lenders shall otherwise consent in writing:
7.1. Sale of Assets; Mergers, Etc.
(a) Sale of Assets. The Borrower will not, except in the ordinary
course of business, sell, transfer, or otherwise dispose of, to any Person any
assets (including the securities of any Subsidiary).
(b) Mergers, Etc. Neither the Borrower nor any Subsidiary will
consolidate with or merge into any other Person or permit any other Person to
consolidate with or merge into it, or acquire all or substantially all of the
assets of any Person, or sell, assign, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its
assets to any Person, except that
(1) a Subsidiary may consolidate with or merge into the
Borrower or another Subsidiary; and
(2) the Borrower or any of its Subsidiaries may acquire all or
substantially all of the assets of any Person provided (i) such
Person is engaged in a line of business substantially similar to one
or more of Borrower's existing lines of business, (ii) the aggregate
purchase price liability incurred in any calendar year, including
all contingent liabilities, when aggregated with all such
acquisitions and any Investments permitted under Section 7.4(2) in
any calendar year shall not exceed 25% of Consolidated Tangible Net
Worth as of the end of the most recent fiscal quarter or, if 80% or
more of the purchase price is paid in capital stock of the Borrower,
40% of Consolidated Tangible Net Worth as of the end of the most
recent fiscal quarter and (iii) based on a pro forma calculation of
the ratios set forth in Section 7.7 as of the date such acquisition
is closed, assuming consolidation of the acquired business with the
Borrower for the four full fiscal quarters ended immediately
preceding such closing and pro forma debt and debt service payments
based on scheduled principal payments, including acquisition
borrowings, if any, and pro forma interest on total debt at then
prevailing borrowing rates, Borrower is in compliance with the
financial covenants set forth in Section 7.7.
7.2. Liens and Encumbrances.
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(a) Neither the Borrower nor any Subsidiary will (a) cause or permit
or (b) agree or consent to cause or permit in the future (upon the happening of
a contingency or otherwise), any of its real or personal property, whether now
owned or subsequently acquired, to be subject to any Lien other than Liens
described below (which may herein be referred to as "Permitted Liens"):
(1) Liens securing the payment of taxes, assessments or
governmental charges or levies or the demands of suppliers,
mechanics, carriers, warehousers, landlords and other like Persons,
which payments are not yet due and payable or (as to taxes) may be
paid without interest or penalty; provided, that, if such payments
are due and payable, such Liens shall be permitted hereunder only to
the extent that (A) all claims that the Liens secure are being
actively contested in good faith and by appropriate proceedings, (B)
adequate book reserves have been established with respect thereto to
the extent required by generally accepted accounting principles, and
(C) such Liens do not in the aggregate materially interfere with the
owning company's use of property necessary or material to the
conduct of the business of the Borrower and its Subsidiaries taken
as a whole;
(2) Liens incurred or deposits made in the ordinary course of
business (A) in connection with worker's compensation, unemployment
insurance, social security and other like laws, or (B) to secure the
performance of letters of credit, bids, tenders, sales contracts,
leases, statutory obligations, surety, appeal and performance bonds
and other similar obligations, in each case not incurred in
connection with the borrowing of money, the obtaining of advances or
the payment of the deferred purchase price of property;
(3) Liens not otherwise described in Section 7.2(a)(1) or (2)
that are incurred in the ordinary course of business and are
incidental to the conduct of its business or ownership of its
property, were not incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred
purchase price of property and do not in the aggregate materially
detract from the value of, or materially interfere with the owning
company's use of, property necessary or material to the conduct of
the business of the Borrower and its Subsidiaries taken as a whole;
(4) Liens in favor of the Agent for the benefit of the
Lenders;
(5) Liens permitted under Existing Loan Agreements;
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(6) Judgment liens or attachments that shall not have been in
existence for a period longer than 30 days after the creation
thereof, or if a stay of execution shall have been obtained, for a
period longer than 30 days after the expiration of such stay or if
such an attachment is being actively contested in good faith and by
appropriate proceedings, for a period longer than 30 days after the
creation thereof;
(7) Liens existing as of the Closing Date and disclosed on the
Disclosure Schedule hereto;
(8) Liens provided for in equipment or Financing Leases
(including financing statements and undertakings to file financing
statements) provided that they are limited to the equipment subject
to such leases and the proceeds thereof;
(9) Leases or subleases with third parties or licenses and
sublicenses granted to third parties not interfering in any material
respect with the business of the Borrower or any Subsidiary of the
Borrower;
(10) Any Lien on any asset of any corporation existing at the
time such corporation is merged into or consolidated with the
Borrower or a Subsidiary of the Borrower and not created in
contemplation of such event;
(11) Any Lien existing on any asset prior to the acquisition
thereof by the Borrower or any Subsidiary of the Borrower and not
created in contemplation of such event;
(12) Liens in respect of any purchase money obligations for
tangible property used in its business, which obligations shall not
at any time exceed 5% of consolidated Tangible Net Worth, provided
that any such encumbrances shall not extend to property and assets
of the Borrower or any Subsidiary not financed by such a purchase
money obligation;
(13) Easements, rights of way, restrictions and other similar
charges or Liens relating to real property and not interfering in a
material way with the ordinary conduct of its business; and
(14) Liens on its property or assets created in connection
with the refinancing of Indebtedness secured by Permitted Liens on
such property, provided that the amount of Indebtedness secured by
any such Lien shall not be increased as a result of such refinancing
and no
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such Lien shall extend to property and assets of the Borrower or any
Subsidiary not encumbered prior to any such refinancing.
(b) In case any property is subjected to a Lien in violation of
Section 7.2(a), the Borrower will make or cause to be made provision whereby the
Notes will be secured equally and ratably with all other obligations secured by
such property, and in any case the Notes shall have the benefit, to the full
extent that the holders may be entitled thereto under applicable law, of an
equitable Lien equally and ratably securing the Notes. Such violation of Section
7.2(a) shall constitute an Event of Default hereunder, whether or not any such
provision is made pursuant to this Section 7.2(b).
(c) Neither the Borrower nor any Subsidiary will agree with any
third party not to cause or permit any of its real or personal property, whether
now owned or subsequently acquired, to be subject to Liens (with or without
exceptions).
7.3. Sales and Leasebacks. The Borrower and its Subsidiaries will not sell
or transfer any of their property and become, directly or indirectly, liable as
the lessee under a lease of such property (other than such transactions between
the Subsidiaries and transfers of capital equipment that will be leased pursuant
to Financing Leases).
7.4. Investments. Neither the Borrower nor any Subsidiary will make or
maintain any investments, made in cash or by delivery of property or assets, (a)
in any Person, whether by acquisition of capital stock, Indebtedness, or other
obligations or securities, or by loan or capital contribution, or otherwise, or
(b) in any property, whether real or personal, (items (a) and (b) being herein
called "Investments"), except the following:
(1) Investments in direct obligations of, or guaranteed by,
the United States government, its agencies or any public
instrumentality thereof and backed by the full faith and credit of
the United States government with maturities not to exceed (or an
unconditional right to compel purchase within) one year from the
date of acquisition;
(2) Investments in or to any Subsidiary or other Person,
provided Borrower remains in compliance with Section 7.1(b);
(3) Investments and obligations issued by any state of the
United States or any political subdivision of any such state or any
public instrumentality thereof with maturities not to exceed (or an
unconditional right to compel purchase within) 180 days of the date
of acquisition that are rated in one of the top two rating
classifications by at least one nationally recognized rating agency;
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(4) Investments in demand and time deposits with, Eurodollar
deposits with, certificates of deposit issued by, or obligations or
securities fully backed by letters of credit issued by (x) any bank
organized under the laws of the United States, any state thereof,
the District of Columbia or Canada having combined capital and
surplus aggregating at least $500,000,000, or (y) any other bank
organized under the laws of a state that is a member of the European
Economic Community (or any political subdivision thereof), Japan,
the Cayman Islands, or British West Indies having as of any date of
determination combined capital and surplus of not less than
$500,000,000 or the equivalent thereof (determined in accordance
with generally accepted accounting principles);
(5) Shares of money market mutual funds registered under the
Investment Company Act of 1940, as amended;
(6) Foreign currency swaps and hedging arrangements entered
into in the ordinary course of business to protect against currency
losses, and interest rate swaps and caps entered into in the
ordinary course of business to protect against interest rate
exposure on Indebtedness bearing interest at a variable rate;
(7) Investments in publicly traded companies and mutual funds
(other than money market mutual funds) that in the aggregate shall
not exceed $5,000,000; and
(8) Other Investments existing on the Closing Date and listed
on the Disclosure Schedule.
7.5. Transactions with Affiliates. Neither the Borrower nor any Subsidiary
will enter into any transaction (including the purchase, sale or exchange of
property or the rendering of any service) with any Affiliate except upon fair
and reasonable terms that are at least as favorable to the Borrower or the
Subsidiary as would be obtained in a comparable arm's-length transaction with a
non-Affiliate.
7.6. ERISA Compliance. Neither the Borrower nor any of its Subsidiaries
will at any time permit any employee pension benefit plan (as such term is
defined in Section 3 of ERISA) maintained by the Borrower or any of its
Subsidiaries or in which employees of the Borrower or any of its Subsidiaries is
entitled to participate to:
(a) engage in any "prohibited transaction" as such term is defined
in Section 4975 of the Internal Revenue Code of 1986, as
amended, or described in Section 406 of ERISA;
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(b) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA, whether or not waived; or
(c) terminate under circumstances that could result in the
imposition of a Lien on the property of the Borrower or any
Subsidiary of the Borrower pursuant to Section 4068 of ERISA.
7.7. Financial Covenants. The Borrower covenants and agrees that:
(a) Tangible Net Worth Test. The Consolidated Tangible Net Worth as
of the end of each fiscal quarter of the Borrower shall:
(A) prior to an IPO, not be less than the sum of (i)
$38,000,000, and (ii) 50% of Consolidated Net Income (excluding losses)
for each consecutive fiscal quarter of the Borrower beginning with the
quarter ending March 31, 1996, on a cumulative basis; and
(B) after an IPO, not be less than the sum of (i) the amount
required by clause (A) above immediately prior to such IPO plus (ii) the
net proceeds to the Borrower of the IPO less (iii) the Sub S Dividends.
(b) Debt-to-Net Worth Ratio. The ratio ("Debt-to-Net Worth Ratio")
of the Consolidated Indebtedness (excluding all guaranties except guaranties
with respect to borrowed money) as of the end of each fiscal quarter of the
Borrower beginning with the fiscal quarter ending December 31, 1995 to its
Consolidated Tangible Net Worth as of the end of each fiscal quarter of the
Borrower beginning with the fiscal quarter ending December 31, 1995 shall not
exceed 1.5 to 1.
(c) Cash Flow Ratio. The ratio (the "Cash Flow Ratio") as of the end
of each fiscal quarter of the Borrower of (i) Consolidated Operating Cash Flow
for the four consecutive fiscal quarters then ended to (ii) Consolidated Debt
Service for the four consecutive fiscal quarters then ended shall not be less
than 1.25 to 1.00.
7.8. Contracts Prohibiting Compliance with Agreement. The Borrower will
not enter into any contract or other agreement that would prohibit or in any way
restrict the ability of the Borrower to comply with any provision of this
Agreement.
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Default. If any one of the following events ("Events of Default")
shall occur:
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(a) Any representation or warranty made by the Borrower herein or in
any other Loan Document, or in any certificate or report furnished by the
Borrower hereunder or thereunder, shall prove to have been incorrect in any
material respect when made;
(b) Payment of any principal or interest due under any Note shall
not be made on or before the date due;
(c) A final judgment or settlement for in excess of $2,000,000 shall
be rendered against or agreed to by the Borrower or any of its Subsidiaries for
the payment of money that, after deducting the amount of any insurance proceeds
paid or payable to or on behalf of the Borrower or its Subsidiary in connection
with such judgment or settlement, as the case may be, is in excess of
$2,000,000, and such judgment shall remain undischarged for a period of thirty
(30) days, during which period execution shall not effectively be stayed, or
such settlement shall remain unpaid for a period of thirty days after the agreed
payment date unless such delay has been agreed to by the other party. If a
dispute exists with respect to the liability of any insurance underwriter under
any insurance policy of the Borrower or its Subsidiary, no deduction under this
subsection shall be made for the insurance proceeds that are the subject of such
dispute;
(d) The Borrower or any Subsidiary shall (1) voluntarily terminate
operations or apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of such Person or of
all or a substantial part of the assets of such Person, (2) admit in writing its
inability, or be generally unable, to pay its debts as the debts become due, (3)
make a general assignment for the benefit of its creditors, (4) commence a
voluntary case under the Federal Bankruptcy Code (as now or hereafter in
effect), (5) file a petition seeking to take advantage of any other law relating
to bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, (6) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code or applicable state bankruptcy laws or (7)
take any corporate action for the purpose of effecting any of the foregoing;
(e) Without its application, approval or consent, a proceeding shall
be commenced, in any court of competent jurisdiction, seeking in respect of the
Borrower or any Subsidiary: the liquidation, reorganization, dissolution,
winding-up, or composition or readjustment of debt, the appointment of a
trustee, receiver, liquidator or the like of such Person or of all or any
substantial part of the assets of such Person, or other like relief in respect
of such Person under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts; and, if the proceeding is
being contested in good faith by such Person, the same shall continue
undismissed, or unstayed and in effect for any period of 45
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consecutive days, or an order for relief against such Person shall be entered in
any case under the Bankruptcy Code or applicable state bankruptcy laws;
(f) Any foreclosure or other proceedings shall be commenced to
enforce, execute or realize upon any lien, encumbrance, attachment, trustee
process, mortgage or security interest for payment of an amount in excess of
$250,000 against the Borrower or any Subsidiary;
(g) Default shall be made in the due observance or performance of
any covenant or agreement under Article VII;
(h) Default shall be made in the due observance or performance of
any covenant or agreement contained herein (and not constituting an Event of
Default under any other clause in this Article VIII) or in any other Loan
Document or in any other agreement between any Lender and the Borrower
evidencing or securing borrowed monies and such default shall continue and shall
not have been remedied within thirty days after the date on which such default
occurred;
(i) There shall occur any default under any instrument or agreement
evidencing any indebtedness for money borrowed in excess of $100,000 by the
Borrower or any of its Subsidiaries;
(j) The transfer by John R. Bertucci and/or his Affiliates of
securities of the Borrower or the voting power related to such securities as a
result of which the power to elect, appoint or cause the election or appointment
of at least a majority of the members of the board of directors of the Borrower
shall no longer be held by John R. Bertucci and/or his Affiliates;
(k) There shall occur any material adverse change in the financial
condition of the Borrower;
(l) There shall occur any Event of Default under either of the
Existing Loan Agreements;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived, any or all of the
following actions may be taken: (i) the Agent (A) with the consent of the
Required Lenders, may, and at the direction of the Required Lenders shall,
declare any obligation of the Lenders to make further Advances terminated,
whereupon the obligation of each Lender to make further Advances hereunder shall
terminate immediately, and (B) the Agent shall at the direction of the Required
Lenders, at their option, declare by notice to the Borrower any or all of the
Obligations to be immediately due and payable, and the same, including all
interest accrued thereon and all other obligations of the Borrower to the Agent
and the Lenders, shall forthwith become immediately due and
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payable without presentment, demand, protest, notice or other formality of any
kind, all of which are hereby expressly waived, anything contained herein or in
any instrument evidencing the Obligations to the contrary notwithstanding;
provided, however, that notwithstanding the above, if there shall occur an Event
of Default under clause (d) or (e) above, then the obligation of the Lenders to
make Advances shall automatically terminate and any and all of the Obligations
shall be immediately due and payable without the necessity of any action by the
Agent or the Required Lenders or notice to the Agent or the Lenders; and (ii)
the Agent and each of the Lenders shall have all of the rights and remedies
available under each of the Loan Documents or under any applicable law.
8.2. Agent to Act. In case any one or more Events of Default shall occur
and not have been waived, the Agent may, and at the direction of the Required
Lenders shall, proceed to protect and enforce their rights or remedies either by
suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
8.3. Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
8.4. No Waiver. No course of dealing between the Borrower and any Lender
or the Agent or any failure or delay on the part of any Lender or the Agent in
exercising any rights or remedies under any Loan Document or otherwise available
to it shall operate as a waiver of any rights or remedies and no single or
partial exercise of any rights or remedies shall operate as a waiver or preclude
the exercise of any other rights or remedies hereunder or of the same right or
remedy on a future occasion.
8.5. Allocation of Proceeds. If an Event of Default has occurred and not
been waived, and the maturity of the Notes has been accelerated pursuant to this
Article VIII, all payments received by the Agent hereunder, in respect of any
principal of or interest on the Obligations or any other amounts payable by the
Borrower hereunder, shall be applied by the Agent in the following order:
(a) amounts due to the Lenders pursuant to Sections 2.6 and 10.4;
(b) amounts due to the Agent pursuant to Section 9.10;
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(c) payments of interest on Notes to be applied for the ratable
benefit of the Lenders;
(d) payments of principal of Notes to be applied for the ratable
benefit of the Lenders;
(e) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the Lenders;
and
(f) any surplus remaining after application as provided for herein,
to the Borrower or otherwise as may be required by applicable law.
ARTICLE IX
THE AGENT
9.1. Appointment. Each Lender hereby irrevocably designates and appoints
Bank of Boston as the Agent for the Lenders under this Agreement, and each of
the Lenders hereby irrevocably authorizes Bank of Boston as the Agent for such
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers as are expressly
delegated to the Agent by the terms of this Agreement and such other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Agent shall not have any duties or responsibilities, except those expressly
set forth herein, or any fiduciary relationship with any of the Lenders, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
9.2. Limitation on Liability. Neither the Agent nor any of its officers,
directors, employees, agents or attorneys-in-fact shall be liable to the Lenders
for any action lawfully taken or omitted to be taken by it or them under or in
connection with the Loan Documents except for its or their own gross negligence
or willful misconduct. Neither the Agent nor any of its affiliates shall be
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer or
representative thereof contained in any Loan Document, or in any certificate,
report, statement or other document referred to or provided for in or received
by the Agent under or in connection with any Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any Loan
Document, or for any failure of the Borrower to perform its obligations under
any Loan Document, or for any recitals, statements, representations or
warranties made, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any collateral. The Agent shall not be under
any obligation to any of the Lenders to ascertain or to inquire as to the
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observance or performance of any of the terms, covenants or conditions of any
Loan Document on the part of the Borrower or to inspect the properties, books or
records of the Borrower or its Subsidiaries.
9.3. Reliance. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent
certificate, affidavit, letter, cablegram, telegram, telefacsimile or telex
message, statement, order or other document or conversation reasonably believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless an
Assignment and Acceptance shall have been filed with and accepted by the Agent.
The Agent shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first receive advice or concurrence of the
Lenders or the Required Lenders as provided in this Agreement or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense that may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under the Loan Documents in accordance with a request
of the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all present and
future holders of the Notes.
9.4. Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall promptly give notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders; provided that, unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Event of Default as it shall deem advisable in the best interests of the
Lenders.
9.5. No Representations. Each Lender expressly acknowledges that neither
the Agent nor any of its affiliates has made any representations or warranties
to it and that no act by the Agent hereafter taken, including any review of the
affairs of the Borrower or its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the financial
condition, creditworthiness, affairs, status and nature of the Borrower and made
its own decision to enter into
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this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agent 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 analysis, appraisals and decisions in taking or not taking action
under the Loan Documents and to make such investigation as it deems necessary to
inform itself as to the status and affairs, financial or otherwise, of the
Borrower or its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition or
business of the Borrower or its Subsidiaries which may come into the possession
of the Agent or any of its Affiliates.
9.6. Indemnification. Each of the Lenders agrees to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting any obligations of the Borrower to do so), ratably according to the
respective principal amount of the Notes held by them (or, if no Notes are
outstanding, ratably in accordance with their respective Applicable Commitment
Percentages as then in effect) from and against any and all liabilities,
obligations, losses (excluding any losses suffered by the Agent as a result of
Borrower's failure to pay any fee owing to the Agent), damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may at any time (including without limitation at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of any Loan Document or
any other Document contemplated by or referred to therein or the transactions
contemplated thereby or any action taken or omitted by the Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Obligations and
the termination of this Agreement.
9.7. The Agent in its Individual Capacity. With respect to its Advances
made or renewed by it and any Note issued to it, the Agent shall have the same
rights and powers under this Agreement as any Lender and may exercise the same
as though it were not the Agent, and the terms "Lender" and "Lenders" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Agent were not the Agent hereunder. The Agent may apply any amount obtained by
it through exercise of a right of banker's lien, set-off, counterclaim or
otherwise to satisfaction of any obligations owed it by the Borrower whether
under this Agreement or any Existing Loan Agreement and shall have the right to
determine the order in which amounts are applied to such obligations.
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9.8. Resignation. If the Agent shall resign as Agent under this Agreement,
then the Required Lenders may appoint, with the consent, so long as there shall
not have occurred and be continuing a Default or Event of Default, of the
Borrower, which consent shall not be unreasonably withheld, a successor Agent
for the Lenders, which successor Agent shall be a commercial bank organized
under the laws of the United States or any state thereof, having a combined
surplus and capital of not less than $500,000,000, whereupon such successor
Agent shall succeed to the rights, powers and duties of the former Agent and the
obligations of the former Agent shall be terminated and canceled, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement; provided, however, that the former Agent's
resignation shall not become effective until such successor Agent has been
appointed and has succeeded of record to all right, title and interest in any
collateral held by the Agent; provided, further, that if the Required Lenders
and, if applicable, the Borrower cannot agree as to a successor Agent within
ninety (90) days after such resignation, the Agent shall appoint a successor
Agent that satisfies the criteria set forth above in this Section 9.8 for a
successor Agent and the parties hereto agree to execute whatever documents are
necessary to effect such action under this Agreement or any other Document
executed pursuant to this Agreement; provided, however, that in such event all
provisions of the Loan Documents shall remain in full force and effect. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Article IX shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
9.9. Sharing of Payments, Etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to its Obligations (other than pursuant
to Article V) that results in its receiving more than its pro rata share of the
aggregate payments with respect to all of the Obligations (other than any
payment pursuant to Section 3.2 or 3.3), then (a) such Lender shall be deemed to
have simultaneously purchased from the other Lenders a share in their
Obligations so that the amount of the Obligations held by each of the Lenders
shall be pro rata and (b) such other adjustments shall be made from time to time
as shall be equitable to insure that the Lenders share such payments ratably;
provided, however, that for purposes of this Section 9.9, the term "pro rata"
shall be determined with respect to the Revolving Credit Commitment after
subtraction of amounts, if any, by which any such Lender has not funded its
share of the outstanding Advances and Obligations. If all or any portion of any
such excess payment is thereafter recovered from the Lender that received the
same, the purchase provided in this Section 9.9 shall be rescinded to the extent
of such recovery, without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that each Lender so purchasing a portion of
the other Lenders' Obligations may exercise all rights of payment (including,
without limitation, all rights of set-off, banker's lien or counterclaim) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
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9.10. Fees. The Borrower agrees to pay to the Agent, for its individual
account, an annual Agent's fee as from time to time agreed to by the Borrower
and Agent in writing.
ARTICLE X
MISCELLANEOUS
10.1. Assignments and Participations. (a) At any time after the Closing
Date each Lender may, with the prior consent of the Borrower (so long as no
Event of Default has occurred and is continuing) and the Agent, which consents
shall not be unreasonably withheld, assign to one or more banks or financial
institutions all or a portion of its rights and obligations under the Loan
Documents (including, without limitation, all or a portion of any Note payable
to its order); provided, that (i) each such assignment shall be of a constant
and not a varying percentage of all of the assigning Lender's rights and
obligations hereunder, (ii) for each assignment involving the issuance and
transfer of a Note, the assigning Lender shall execute an Assignment and
Acceptance and the Borrower hereby agrees to execute a replacement Note to give
effect to the assignment, (iii) the minimum aggregate amount of a Revolving
Credit Commitment that shall be assigned is $5,000,000, (iv) such assignee shall
have an office located in the United States, and (v) no consent of the Borrower
or the Agent shall be required in connection with any assignment by a Lender to
another Lender or to an Affiliate of any Lender. Upon such execution, delivery,
approval and acceptance, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder or under any such Note
have been assigned or negotiated to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and a holder
of such Note and (y) the assignor thereunder shall, to the extent that rights
and obligations hereunder or under such Note have been assigned or negotiated by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement.
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) the assignment made
under such Assignment and Acceptance is made under such Assignment and
Acceptance without recourse; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or its Subsidiaries or the performance or observance
by the Borrower of any of its obligations under any Loan Document or any other
instrument or Document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements delivered pursuant to
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Section 4.5 or Section 6.1, as the case may be, and such other Loan Documents
and other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent, such
assigning Lender 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 any Loan Document; (v) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Loan Documents as are delegated to
the Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Loan Documents are required to be performed by it as a Lender and a
holder of a Note.
(c) The Agent shall maintain at its address referred to herein a
copy of each Assignment and Acceptance delivered to and accepted by it.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, the Agent shall give prompt notice thereof to Borrower.
(e) Nothing herein shall prohibit any Lender from pledging or
assigning, without notice to or consent of the Borrower, any Note to any Federal
Reserve Bank in accordance with applicable law.
(f) Each Lender may sell participations at its expense to one or
more banks or other entities as to all or a portion of its rights and
obligations under this Agreement; 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, (iii) such Lender shall remain the holder of any Note issued to it
for the purpose of this Agreement, (iv) the Borrower, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
with regard to any and all payments to be made under this Agreement and (v) the
sale of any such participations that require Borrower to file a registration
statement with the Securities and Exchange Commission or under the securities
regulations or laws of any state shall not be permitted.
(g) The Borrower may not assign any rights, powers, duties or
obligations under this Agreement or the other Loan Documents without the prior
written consent of all the Lenders.
10.2. Survival of Representations, Etc. All representations, warranties
and covenants made herein or in any Loan Document shall survive the making of
any
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Advance hereunder and the delivery of the Notes and the consummation of all
other transactions contemplated hereby or thereby.
10.3. Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise and not by way of limitation of any such
rights, upon the occurrence and during the unremedied continuation of an Event
of Default, the Agent and each Lender is hereby authorized at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to the Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by the Agent or
any Lender to or for the credit or the account of the Borrower against and on
account of the Obligations, and all other claims of any nature or description
arising out of or connected with this Agreement or any other Loan Document,
irrespective of whether or not such Agent or Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
10.4. Indemnity; Costs, Expenses and Taxes. The Borrower hereby agrees to
indemnify the Lenders and their legal representatives, successors, assigns and
agents against, and agrees to protect, save and keep harmless each of them from
and to pay upon demand, any and all liabilities, obligations, taxes (including
any and all stamp and other taxes payable or determined to be payable in
connection with the execution and delivery of any Loan Documents), liens,
charges, losses, damages, penalties, claims, actions, suits, costs, indemnities,
expenses and disbursements (including, without limitation, reasonable legal
fees, costs and expenses, including without limitation reasonable costs of
attending and preparing for depositions and other court proceedings), of
whatsoever kind and nature, imposed upon, incurred by or asserted against such
indemnified party in any way relating to or arising out of the execution,
delivery, enforcement, performance and administration of this Agreement or any
other Loan Documents (all of the foregoing, collectively, "Costs") except to the
extent arising by reason of any Lender's gross negligence, misconduct or breach
hereof. Without limiting the foregoing, the Borrower agrees to pay on demand (a)
all out-of-pocket costs and expenses of the Agent in connection with the
preparation, execution and delivery of this Agreement and any other Loan
Documents, including without limitation the reasonable fees and out-of-pocket
expenses of Foley, Hoag & Eliot, special counsel for the Agent, with respect
thereto, as well as (b) the reasonable fees and all out-of-pocket expenses of
legal counsel, independent public accountants and other outside experts retained
by the Lenders in connection with any request by the Borrower for consents,
waivers or other action or forbearance by the Lenders hereunder, for the
modification or amendment hereof, or other like matters relating to the
administration of this Agreement; and (c) all reasonable costs and expenses, if
any, of the Lenders incurred after the occurrence of any Event of Default
hereunder in connection with the enforcement of any of the Loan Documents or the
protection of any of the Lenders' rights thereunder, including, without
limitation, any internal
-43-
costs, including personnel costs of the Lenders incurred in connection with such
administration and enforcement or protection.
10.5. Notices.
(a) Unless telephonic notice is specifically permitted pursuant to
the terms of this Agreement, any notice or other communication hereunder to any
party hereto shall be by telegram, telecopier, telex, delivery in hand or by
courier, or registered or certified mail (return receipt requested) and shall be
deemed to have been given or made when telegraphed, telexed, telecopied (and
confirmed received), delivered in hand or by courier, or three days after being
deposited in the mails, postage prepaid, registered or certified, addressed to
the party as follows (or at any other address that such party may hereafter
specify to the other parties in writing):
(a) If to the Agent:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attn: Ms. Sharon A. Stone, Director
Telecopier No. (617) 434-4426
with a copy to:
Arlene L. Bender, Esq.
Foley, Hoag & Eliot
One Post Office Square
Boston, Massachusetts 02109
Telecopier No. (617) 832-7000
(b) If to the Borrower:
MKS Instruments, Inc.
Six Shattuck Road
Andover, Massachusetts 01810
Attn: Mr. Robert F. O'Brien, Treasurer
Telecopier No. (508) 975-3756
-44-
with a copy to:
Richard S. Chute, Esq.
Hill & Barlow
One International Place
Boston, Massachusetts 02110
Telecopier No. (617) 428-3500
(c) if to the Lenders:
At the addresses set forth on the signature pages hereof
and on the signature page of each Assignment and
Acceptance.
10.6. MASSACHUSETTS LAW. THIS AGREEMENT AND EACH OF THE LOAN DOCUMENTS
SHALL BE DEEMED A CONTRACT MADE UNDER THE LAW OF THE COMMONWEALTH OF
MASSACHUSETTS AND SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF SAID STATE (WITHOUT REGARD TO ITS PRINCIPLES OF
CONFLICT OF LAWS).
10.7. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute one and the same instrument.
10.8 JURISDICTION, SERVICE OF PROCESS.
(a) ANY SUIT, ACTION OR PROCEEDING AGAINST THE BORROWER WITH RESPECT
TO ANY OF THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT OF
ANY THEREOF SHALL BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS
LOCATED IN SUFFOLK COUNTY OR IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF MASSACHUSETTS, AS THE LENDERS (IN THEIR SOLE DISCRETION) MAY ELECT,
AND THE BORROWER HEREBY ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR
THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING AND AGREES NOT TO ASSERT ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS.
(b) IN ADDITION, THE BORROWER HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
-45-
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR ANY
JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF BROUGHT IN SUFFOLK COUNTY IN
THE COMMONWEALTH OF MASSACHUSETTS, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY
CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN SUFFOLK COUNTY IN THE
COMMONWEALTH OF MASSACHUSETTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
10.9. Limit on Interest. It is the intention of the Lenders and the
Borrower to comply strictly with all applicable usury laws; and, accordingly, in
no event and upon no contingency shall the Lenders ever be entitled to receive,
collect, or apply as interest under any Note any interest, fees, charges or
other payments equivalent to interest, in excess of the maximum rate that the
Lenders may lawfully charge under applicable statutes and laws from time to time
in effect; and, in the event that the Lenders ever receive, collect or apply as
interest on the Notes, any such excess, such amount that, but for this
provision, would be excessive interest shall be applied to the reduction of the
principal amount of the indebtedness evidenced by the Notes; and, if the
principal amount of indebtedness evidenced by the Notes, and all lawful interest
thereon, is paid in full, any remaining excess shall forthwith be paid to the
Borrower, or other party lawfully entitled thereto. In determining whether or
not the interest paid or payable, under any specific contingency exceeds the
highest contract rate permitted by applicable law from time to time in effect,
the Borrower and the Lenders shall, to the maximum extent permitted under
applicable law, characterize any non-principal payment as a reasonable loan
charge, rather than as interest. Any provision of any Note, or of any other
agreement between the Lenders and the Borrower, that operates to bind, obligate,
or compel the Borrower to pay interest in excess of such maximum lawful contract
rate shall be construed to require the payment of the maximum rate only. The
provisions of this Section 10.9 shall be given precedence over any other
provisions contained in the Notes or in any other agreement between the Lenders
and the Borrower that is in conflict with the provisions of this Section 10.9.
10.10. Amendments. No amendment, modification or waiver of any provision
of any Loan Document and no consent by the Lenders to any departure therefrom by
the Borrower shall be effective unless such amendment, modification or waiver
shall be in writing and signed by the Agent, shall have been approved by the
Required Lenders through their written consent, and the same shall then be
effective only for the period and on the conditions and for the specific
instances and purposes specified in such writing; provided, however, that, no
such amendment, modification or waiver
(i) that changes, extends or waives any provision of Section 3.1.4,
Section 9.9 or this Section 10.10, the amount of or the due date of any
scheduled principal installment of or the rate of interest payable on or
fees
-46-
payable with respect to any Obligation, that changes the definition of
Required Lenders, that permits an assignment by the Borrower of its
Obligations under any Loan Document, that reduces the required consent of
the Lenders provided hereunder, that increases, decreases (other than
pursuant to the express terms hereof) or extends (other than pursuant to
the express terms hereof) the Revolving Credit Commitment of any Lender or
the Total Revolving Credit Commitment or that waives any condition to the
making of any Advance, shall be effective unless in writing and signed by
each of the Lenders; or
(ii) that affects the rights, privileges, immunities or indemnities
of the Agent shall be effective unless in writing and signed by the Agent.
Notwithstanding any provision of the other Loan Documents to the contrary, as
between the Agent and the Lenders, execution by the Agent shall not be deemed
conclusive evidence that the Agent has obtained the written consent of the
Required Lenders. No notice to or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances, except as otherwise expressly provided herein. No delay or
omission on any Lender's or the Agent's part in exercising any right, remedy or
option shall operate as a waiver of such or any other right, remedy or option or
of any Default or Event of Default.
10.11. Headings. The headings of this Agreement are for convenience only
and are not to affect the construction of or to be taken into account in
interpreting the substance of this Agreement.
10.12. WAIVER OF NOTICE, ETC. THE BORROWER WAIVES DEMAND, NOTICE, PROTEST,
NOTICE OF ACCEPTANCE OF THIS AGREEMENT, NOTICE OF LOANS MADE, CREDIT EXTENDED,
COLLATERAL RECEIVED OR DELIVERED OR OTHER ACTION TAKEN IN RELIANCE HEREON AND
ALL OTHER DEMANDS AND NOTICE OF ANY DESCRIPTION, EXCEPT AS REQUIRED HEREBY. WITH
RESPECT BOTH TO THE OBLIGATIONS AND COLLATERAL, THE BORROWER ASSENTS TO ANY
EXTENSION OR POSTPONEMENT OF THE TIME OF PAYMENT OR ANY OTHER INDULGENCE, TO ANY
SUBSTITUTION, EXCHANGE OR RELEASE OF COLLATERAL, TO THE ADDITION OR RELEASE OF
ANY PARTY OR PERSONS PRIMARILY OR SECONDARILY LIABLE, TO THE ACCEPTANCE OF
PRETRIAL PAYMENT THEREON AND THE SETTLEMENT, COMPROMISING OR ADJUSTING OF ANY
THEREOF, ALL IN SUCH MANNER AND AT SUCH TIME OR TIMES AS THE LENDERS MAY DEEM
ADVISABLE. THE BORROWER AGREES THAT NO ACTIONS TAKEN BY ANY PERSON EXCEPT THE
LENDERS SHALL IMPAIR OR OTHERWISE AFFECT ITS OBLIGATIONS
-47-
HEREUNDER UNTIL ALL OBLIGATIONS OF THE BORROWER HEREUNDER ARE SATISFIED IN FULL.
10.13. Severability. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
10.14. Entire Agreement. This Agreement and the other Loan Documents
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof and shall supersede all
prior agreements and understandings, whether written or oral, between the
parties with respect to the subject matter hereof and thereof.
10.15. Compliance with Covenants. All computations determining compliance
with Articles 6 and 7 shall utilize accounting principles in conformity with
those used in the preparation of the financial statements referred to in Section
4.5. If any subsequent financial reports of the Borrower shall be prepared in
accordance with accounting principles different from those used in the
preparation of the financial statements referred to in Section 4.5, the Borrower
shall inform the Agent of the changes in accounting principles and shall provide
the Agent with such reports, such supplemental reconciling financial information
as may be required to ascertain compliance by the Borrower with the covenants
contained in this Agreement.
10.16. Termination. This Agreement may be terminated by the Borrower at
any time upon written notice of such termination to the Agent; provided,
however, that, unless and until all loans made by the Lenders hereunder and all
other Obligations hereunder of the Borrower to any Lender existing (whether or
not due) as of the time of the receipt of such notice by the Agent shall have
been paid in full, such termination shall in no way affect the rights and powers
granted to the Lenders in connection with this Agreement, and until such payment
in full all rights and powers hereby granted to the Lenders hereunder shall be
and remain in full force and effect.
10.17. WAIVER OF TRIAL BY JURY. THE BORROWER WAIVES ANY AND ALL RIGHTS
THAT IT MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM OR ACTION, OF ANY NATURE
WHATSOEVER, RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS.
-48-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an agreement under seal as of the date first above written.
Witness: MKS INSTRUMENTS, INC.
/s/ Richard S. Chute By: /s/ Robert F. O'Brien
-------------------------- -------------------------------
Title: Treasurer
----------------------------
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Sharon A. Stone
-------------------------------
Title:
----------------------------
Address: 100 Federal Street
Boston, MA 02110
CHEMICAL BANK
By: /s/ Joseph Sachs
-------------------------------
Title: Vice President
----------------------------
Address: c/o Chemical Connecticut
Corporation
3 Landmark Square, Suite 401
Stamford, CT 06901
-49-
EXHIBIT A
[Download Table]
Revolving Applicable
Credit Commitment
Lender Commitment Percentage
------ ----------- ----------
The First National $12,000,000 60%
Bank of Boston
Chemical Bank $ 8,000,000 40%
----------- ----------
$20,000,000 100%
-50-
EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE
DATED __________________, ______
Reference is made to the Loan Agreement dated as of February __, 1996 (the
"Agreement") among MKS Instruments, Inc., a Massachusetts corporation (the
"Borrower"), the Lenders (as defined in the Agreement), and The First National
Bank of Boston as Agent for the Lenders ("Agent"). Unless otherwise defined
herein, terms defined in the Agreement are used herein with the same meanings.
____________________ (the "Assignor") and _______________ (the "Assignee")
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a _______%(1)
interest in and to all of the Assignor's rights and obligations under the
Agreement as of the Effective Date (as defined below), including, without
limitation, such percentage interest in the Advances owing to the Assignor on
the Effective Date and evidenced by the Revolving Credit Note held by the
Assignor.
2. The Assignor (i) represents and warrants that, as of the date hereof,
the aggregate principal amount of Advances owing to it (without giving effect to
the assignments thereof which have not yet become effective) is $__________
under a Revolving Credit Note dated ____________, 19__ in the principal amount
of $_____________; (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (iii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Agreement or any
of the Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Agreement or any of the Loan Documents
or any other instrument or document furnished pursuant thereto; (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower of any of its obligations under any of the Loan
Documents or any other instrument or document furnished pursuant thereto and (v)
attaches hereto the Revolving Credit Note referred to in Paragraph 1 above and
requests that the Agent exchange such Note for replacement Notes as follows: a
Revolving Credit Note dated ________________, 19___ in the principal amount of
$____________________, payable to the order of the Assignor, and a Revolving
Credit
_______________________
(1) Specify percentage in no more than 4 decimal points. The minimum
Revolving Credit Commitment that shall be assigned is $5,000,000.
Note, dated ____________________________ 19__, in the principal amount of
$__________________ , payable to the order of the Assignee.
3. The Assignee (i) confirms that it has received a copy of the Agreement,
together with copies of the financial statements referred to in Section 4.5
thereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Agent, the 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 Agreement; (iii)
appoints and authorizes the Agent to take such actions on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; (iv) will perform all of the obligations that by the terms of the
Agreement are required to be performed by the Lender; and (v) specifies as its
address for notices the office set forth beneath its name on the signature pages
hereof.
4. The effective date for this Assignment and Acceptance shall be
____________________________ (the "Effective Date"). Following the execution of
this Assignment and Acceptance, it will be delivered to the Agent for approval
and acceptance and recording by the Agent.
5. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Loan Documents and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement and the other Loan Documents.
6. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments under the Agreement and Note in respect of the
interest assigned hereby (including, without limitation, all payments of
principal, interest and fees with respect thereto) to the Assignee. The Assignor
and Assignee shall make all appropriate adjustments in payments under the
Agreement and the Note for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with, the laws of the State of _________.
[NAME OF ASSIGNOR)
By:________________________________
Name:__________________________
Title:_________________________
B-2
Notice Address:__________________________
__________________________
After the Effective Date
Outstanding Advances: $_________________
[NAME OF ASSIGNEE)
By:______________________________________
Name:________________________________
Title:_______________________________
Notice Address/Lending Office
_________________________
_________________________
_________________________
Wire transfer Instructions:
_________________________
_________________________
_________________________
After the Effective Date
Outstanding Advances: $_________________
Accepted this _____ day of ________, 19__
THE FIRST NATIONAL BANK OF BOSTON,
as Agent
By:______________________________________
Name:________________________________
Title:_______________________________
Consented to:
MKS INSTRUMENTS, INC.
By:________________________________
Name:___________________________
Title:__________________________
B-3
EXHIBIT C
REVOLVING CREDIT NOTE
$______________ Boston, Massachusetts
February __, 1996
FOR VALUE RECEIVED, MKS INSTRUMENTS, INC., a Massachusetts corporation
having its principal place of business located in Andover, Massachusetts (the
"Borrower"), hereby promises to pay to the order of
___________________________________________________ (the "Lender"), in its
individual capacity, at the office of THE FIRST NATIONAL BANK OF BOSTON, as
agent for the Lender (the "Agent"), located at 100 Federal Street, Boston,
Massachusetts (or at such other place or places as the Agent may designate in
writing) at the times set forth in the Loan Agreement dated as of February __,
1996 among the Borrower, the financial institutions party thereto (collectively,
the "Lenders") and the Agent (the "Agreement" -- all capitalized terms not
otherwise defined herein shall have the respective meanings set forth in the
Agreement), in lawful money of the United States of America, in immediately
available funds, the principal amount of ___________ DOLLARS ($__________) or,
if less than such principal amount, the aggregate unpaid principal amount of all
Advances made by the Lender to the Borrower pursuant to the Agreement, on the
Revolver Termination Date or such earlier date as may be required pursuant to
the terms of the Agreement, and to pay interest from the date hereof on the
unpaid principal amount hereof, in like money, at said office, on the dates and
at the rates provided in the Agreement. All or any portion of the principal
amount of Advances may be prepaid as provided in the Agreement.
If payment of all sums due hereunder is accelerated under the terms of the
Agreement or under the terms of the other Loan Documents executed in connection
with the Agreement, the then remaining principal amount and accrued but unpaid
interest shall bear interest, which shall be payable on demand, at the rate per
annum set forth in Section 2.4.2 of the Agreement. Further, in the event of such
acceleration, this Revolving Credit Note shall become immediately due and
payable, without presentation, demand, protest or notice of any kind, all of
which are hereby waived by the Borrower.
In the event this Revolving Credit Note is not paid when due at any stated
or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees, and interest thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
This Revolving Credit Note is one of the Revolving Credit Notes in the
aggregate principal amount of $20,000,000 referred to in the Agreement and is
issued pursuant to and entitled to the benefits of the Agreement to which
reference is hereby made for a more complete statement of the terms and
conditions upon which the Advances evidenced hereby were or are made and are to
be repaid. This Revolving Credit Note is subject to certain restrictions on
transfer or assignment as provided in the Agreement.
No delay or omission on the part of the Lender in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Lender, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. Every
maker, endorser and guarantor of this Revolving Credit Note or the obligations
represented hereby waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Revolving Credit Note, assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit Note to
be made, executed and delivered by its duly authorized representative under seal
as of the date and year first above written.
MKS INSTRUMENTS, INC.
WITNESS:
___________________________ By:____________________________
___________________________ Name:_______________________
Title:______________________
C-2
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
The First National Bank of Boston, as Agent
100 Federal Street
Boston, Massachusetts 02110
Attn: Ms. Sharon A. Stone, Director
Ladies and Gentlemen:
Pursuant to the provisions of Section 6.1(c) of the Loan Agreement (the
"Agreement") dated as of February __, 1996 by and between MKS Instruments, Inc.
(the "Borrower"), the Lenders (as defined in the Agreement) and The First
National Bank of Boston as Agent for the Lenders, the undersigned hereby
certifies in the name and on behalf of the Borrower as follows:
(A) (1) The Borrower has performed and maintained all of its obligations
under the Agreement;
(2) The undersigned has caused the provisions of the Agreement to be
reviewed and there is no Default or Event of Default thereunder,
other than as set forth on the Disclosure Schedule attached hereto;
(3) No new action, suit or proceeding has been commenced, or threatened
before any court, arbitration tribunal or governmental regulatory
authority, commission, bureau, agency or public regulatory body
that, if determined adversely to the Borrower or any Subsidiary of
the Borrower, would be reasonably likely to have a material adverse
effect on the consolidated financial condition or results of
operations of the Borrower and its Subsidiaries taken as a whole,
except as set forth on the Disclosure Schedule attached hereto;
(4) All of the representations and warranties set forth in the Agreement
other than Sections 4.5 and 4.6 are true and correct except as a
result of the changes in circumstances set forth on the Disclosure
Schedule attached hereto;
(5) Since the end of the last fiscal year of the Borrower, there has
been no material adverse change in the financial condition, business
or results of operations of the Borrower and its Subsidiaries taken
as a whole, except as set forth on the Disclosure Schedule attached
hereto;
(6) The financial statements submitted herewith are in compliance with
the applicable provisions of Section 6.1 of the Agreement; and
(7) Said financial statements have been prepared in accordance with
generally accepted accounting principles consistent with those
applied in the preparation of the most recent annual financial
statements furnished to the Lenders pursuant to Section 6.1 of the
Agreement, present fairly in all material respects the information
contained therein and the financial condition of the Borrower, and
are correct in all material respects, subject in the case of
statements furnished under Section 6.1(a) to normal year-end
adjustments and the absence of certain footnotes required under
generally accepted accounting principles.
(B) The following calculations demonstrate that, based upon the financial
statements of the Borrower submitted herewith, the Borrower is in
compliance with all covenants set forth in Section 7.7 of the Agreement.
1. Section 7.7(a) -- Tangible Net Worth
Test
(a) Consolidated Tangible Net Worth = $____________
(b) 50% of Consolidated Net Income
(excluding losses) for each
fiscal quarter beginning with the
fiscal quarter ending March 31,
1996, up to and including the
fiscal quarter last ended = $____________
(c) prior to an IPO:
(b) + $38,000,000
(which does not exceed
Consolidated Tangible Net Worth) = $____________
(d) after an IPO:
(c) + the net proceeds of the IPO
- the Sub S Dividend
(which does not exceed
Consolidated Tangible Net Worth) = $____________
D-2
2. Section 7.7(b) -- Debt-to-Net Worth
Ratio
(a) Consolidated Indebtedness
(excluding all guaranties except
guaranties with respect to
borrowed money) as of the end of
the fiscal quarter last ended = $____________
(b) Consolidated Tangible Net Worth
as of the end of the fiscal
quarter last ended = $____________
(c) Ratio of (a) to (b)
(which is not more than 1.5 to 1) = ____________
3. Section 7.7(c) -- Cash Flow Ratio
(a) Consolidated Operating Cash Flow
for the four consecutive fiscal
quarters last ended = $____________
(b) Consolidated Debt Service for the
four consecutive fiscal quarters
last ended = $____________
(c) Ratio of (a) to (b)
(which is not less than 1.25 to
1.0) = $____________
Terms defined in the Agreement and not otherwise expressly defined
herein are used herein with the meanings set forth in the Agreement.
In witness whereof, the undersigned has executed this Certificate
on this ____ day of ________, 19___.
MKS INSTRUMENTS, INC.
By:___________________________________
Name:_________________________________
Title: Chief Financial Officer
D-3
DISCLOSURE SCHEDULE
(1) 4.4 Capital Structure.
a. Capital Stock.
Issued and
Authorized Capital Outstanding Treasury
Class Stock Capital Stock Stock
----- -------------------- ------------- --------
Class A 10,000, no par value 2,454 0
common
Class B 10,000, no par value 3,250 0
common
b. Subsidiaries of Borrower.
(i) MKS International, Inc.; Jurisdiction of Incorporation:
Massachusetts; Authorized Capital Stock: 300,000, $.01 par
value; Issued and Outstanding Capital Stock: 19,013;
Percentage of Equity Owned by Borrower: 70%
(ii) MKS East, Inc.; Jurisdiction of Incorporation: Massachusetts;
Authorized Capital Stock: 300,000, $.01 par value; Issued and
Outstanding Capital Stock: 1,000; Percentage of Equity Owned
by Borrower: 77.5%
(iii) MKS Japan, Inc.; Jurisdiction of Incorporation: Japan;
Authorized Capital Stock: 2,000, Y50,000 par value; Issued and
Outstanding Capital Stock: 707; Percentage of Equity Owned by
Borrower: 77.5%
(iv) MKS Instruments Canada Limited; Jurisdiction of Incorporation:
Canada; Authorized Capital Stock: unlimited number; Issued and
Outstanding Capital Stock: 1,100; Percentage of Equity Owned
by Borrower: 77.5%
(v) MKS Instruments Deutschland GmbH; Jurisdiction of
Incorporation: Germany; Authorized Capital Stock: 1,200,000
DM; Issued and Outstanding Capital Stock: 1,200,000 DM;
Percentage of Equity Owned by Borrower: 77.5%
(vi) MKS Instruments France, S.A.; Jurisdiction of Incorporation:
France; Authorized Capital Stock: 5,000; Issued and
Outstanding Capital Stock: 5,000; Percentage of Equity Owned
by Borrower: 77%
(vii) MKS Korea Co., Ltd.; Jurisdiction of Incorporation: Republic
of Korea; Authorized Capital Stock: 20,000; Issued and
Outstanding Capital Stock: 5,000; Percentage of Equity Owned
by Borrower: 77.5%
(viii) MKS Instruments, UK Limited; Jurisdiction of Incorporation:
United Kingdom; Authorized Capital Stock: 100; Issued and
Outstanding Capital Stock: 100; Percentage of Equity Owned by
Borrower: 75.0%
(ix) MKS FSC, Inc.; Jurisdiction of Incorporation: Barbados;
Authorized Capital Stock: 1,000; Issued and Outstanding
Capital Stock: 1,000; Percentage of Equity Owned by Borrower:
77.5%
c. Outstanding Options, Etc.
On November 30, 1995, the Borrower adopted the MKS Instruments, Inc.
1995 Stock Incentive Plan (the "Plan") pursuant to which options to
purchase 192.1863 shares of Class B Common Stock of the Borrower
have been granted. The option grants will not be effective until the
Plan is adopted by the stockholders of the Borrower which has not
yet occurred. The MKS Instruments, Inc. Stock Appreciation Plan, as
amended, was terminated in its entirety, effective September 30,
1995.
(2) 4.6 Pending Litigation.
None.
(3) 4.11 Transactions with Affiliates, Etc.
John R. Bertucci and Paul Utz, as lessors, lease on a month-to-month
basis to the Borrower, as lessee, certain real estate in Santa
Clara, California used by the Borrower as a sales and service
facility. The current rent is approximately $57,696 per year.
(3) 4.12 ERISA.
MKS Instruments, Inc. Profit-Sharing and Retirement Savings Plan
-2-
(4) 4.13 Ownership of Properties; Liens.
(a) Liens -- Borrower.
(i) Mortgage liens and security interests granted to Bank of
Boston on real property, fixtures, and certain other assets of
the Borrower.
(ii) Security interests granted to BancBoston Leasing, Inc. in
equipment leased by the Borrower.
(iii) Security interests granted to certain lessors of equipment to
the Borrower, including Taylor of New England, Inc.,
Leasametric, Inc., Xerox Corporation, Pitney Bowes Credit
Corporation, and IBM Credit Corporation.
(iv) Liens granted to Leasing Associates, Inc. in certain
automobiles leased by the Borrower.
(v) Mortgage liens and security interests granted to Jefferson
National Life Insurance Company in connection with land owned
by Borrower in Boulder, Colorado.
(vi) Liens granted by UTI Instruments Company in its copying
machines and telephone system (UTI Instruments Company was
merged with and into the Borrower on November 17, 1995)
(b) Liens -- Subsidiaries.
Liens granted by MKS Instruments France, S.A., MKS Investments
Deutschland GmbH, and MKS Japan, Inc. on their respective land and
buildings.
(c) Borrower's Material Leasehold Interests, Etc. See attachment.
(5) 4.14 Employment Matters.
None.
(6) 4.16 Indebtedness.
(a) Indebtedness under the Existing Loan Agreements
-3-
(b) Loan Agreement with Chemical providing the Borrower with a revolving
line of credit up to $3,000,000
(c) International Foreign Exchange Master Agreement dated as of June __,
1995 by and between the Borrower and Chemical
(d) Guaranties as follows:
(i) Guaranty by the Borrower of Indebtedness of MKS Japan,
Inc. to Fuji Bank and to Sanwa Bank.
(ii) Guaranty by the Borrower of Indebtedness of MKS
Instruments Deutschland GmbH to Bank of Boston.
(iii) Guaranty by the Borrower of Indebtedness of MKS Korea
Co., Ltd. to Bank of Boston.
(7) 7.4 Investments.
(a) 45,000 shares of common stock of Sycon Instruments, Inc.
(b) 6,000 shares of common stock of Vacuum Technology, Inc.
(c) 5,512 shares of Fuji Bank
(d) 35,000 shares of common stock of Applied Science and
Technology, Inc.
-4-
MKS Instruments Inc.
Property Summary
[Enlarge/Download Table]
Lease Annual
Location Lease/Own Size (sq. ft.) Landlord Expires Rent
DOMESTIC LEASED
100 Washington Street Lease 500 Candid Associates Month-to- $13,800
North Haven, CT Month
500 North Red Street St. 300 Lease 250 Centers of West Shore Month-to- $6,678
Tampa, FL Month
St. 409, 11350 McCormick Rd. Lease 845 Hill Management 7/31/97 $18,455
Hunt Valley, MD
St. 100C, 100 Roessler Road Lease 250 Executive Secretarial 9/30/98 $7,740
Pittsburgh, PA Service Inc.
St. 111, 113, 789 Grove St. Lease 14,627 General America Life Ins. 8/31/98 $65,822
Richardson, TX Group
St. 101, 6700 SW 105th Lease 415 Go Co Realty 1/12/96 $6,078
Beaverton, OR
5601B Midway Park Place Lease 3,400 Singer Development 5/31/96 $25,542
Albuquerque, NM Partnership
St. 311, 6650 Highland Road Lease 300 Superior Contracting Month-to- $7,200
Waterford, MI Corp. Month
St. 215, 3019 Alvin Devane Blvd. Lease 4,144 H.R.C. Joint Venture L.P. 6/30/98 $35,814
Austin, TX & Austin Bell
Tower Investment Co.
Bldg. 3, 3350 Scott Blvd. Lease 4,000 Utz/Bertucci 4/30/98 $57,696
Santa Clara, CA
24 Walpole Park South Dr. Lease 20,084 Walpole Park South II 3/31/97 $100,420
Walpole, MA Trust
Unit A, 13341 Southwest Hwy. Lease 300 Southwest Investment 8/31/97 $6,420
Orland Park, IL
Mill Building 7,250 Canal St. Lease 4,000 Andrea Management 4/30/98 $8,000
Lawrence, MA
5330 Sterling Drive Lease 39,032 Aspen Industrial Park 10/31/98 $341,530
Boulder, CO Partnership
3844 E. University Drive Lease 15,457 The Hewson Company 7/31/00 $115,000
Phoenix, AZ
119 Main Street Lease 272 Large Sammell & Month-to- $4,200
Flemington, NJ Danziger Month
1815 W. First Ave. Suite 119 Lease 1,523 Tri-City Commerce 06/30/96 $7,070
Mesa, AZ Center
550 N. Reo Street Lease 300 JFG Associates Month-to- $6,678
Tampa, FL Month
7978 Victor-Pittsford Road Lease 300 Eastview Office Park 10/31/96 $6,000
Victor, NY WBW Assoc.
[Enlarge/Download Table]
Lease Annual
Location Lease/Own Size (sq. ft.) Landlord Expires Rent
10220 SW Nimbus Lease 2,168 Petula Assoc. Ltd. & Koll 12/31/98 $26,928
Portland, OR Portland Assoc.
DOMESTIC LEASED
2030 Fortune Drive Suite C Lease 35,873 South Bay/Copley Assoc. 2/14/98 $277,656
San Jose, CA III
3722 Lehigh Street Suite 410 Lease 1,055 Jason C. and Marcus K. 12/31/96 $8,440
Whitehall, PA Danweber
DOMESTIC OWED
3189 E. Airway Ave. Own 3,500
Costa Mesa, CA
3350 Scott Blvd. Bldg. 4 Own 5,000
Santa Clara, CA
Six Shattuck Road Own 82,000
Andover, MA
651 Lowell Street Own 85,000
Methuen, MA
17 Ballard Way Own 40,000
Lawrence, MA
FOREIGN LEASED
4c Jingnuin Bldg. LEASE 156.9 SM Silicon Int'l Ltd. 04/10/96 $66,000
Shanghai, China
174 Cleopatra Drive Lease 100 Month-to- C$1,540
Nepean, Ontario, Canada K2G5X2 Month
2nd flr. Zeus Bldg. 3-16 Yangjag Dong Lease 123.57 SM 10/31/96 W7,200,000
Seocho-Ku, Seoul Korea
988-1 Bangbac - Dong Lease 112 SM 12/11/96 W1,608,000
Seocho-Ku, Seoul Korea
(pound
2 St. Georges Ct. Lease 2191 sterling)17,500
Altincham, Cheshire, England
Rudower Chaussee 5 Lease 43 SM 09/99 DM8,000
D-12484 Berlin, Germany
Kalfjeslaan 40 Lease 135 SM 12/97 DM30,000
NL-2623 AJ Delft, Germany
5-17-13 Narita-higeshi Lease 10,481 (Yen)50,160,480
Suginami-ku, Tokyo, Japan
4-1-45, Miyahara Lease 1,722 (Yen)7,158,600
Yodogawa-ku, Osaka-shi, Osaka, Japan
1-14-3 Hakataeki East, Hakata-ku Lease 1,250 (Yen)5,136,000
Fukuoka-shi, Fukuoka, Japan
1-34-6 Izumicyo, Izumi-ku Lease 610 (Yen)2,162,160
Sendel-shi, Miyagi, Japan
1-1-14 Fujishirodal Lease 992 (Yen)2,172,000
Suita-shi, Osaka, Japan
[Enlarge/Download Table]
Lease Annual
Location Lease/Own Size (sq. ft.) Landlord Expires Rent
1-4-6 Honcho Aoba-ku Lease 484 (Yen)1,029,600
Sendai-shi, Miyagi
FOREIGN OWNED
108-30 Concourse Gate Own 1,700 C$6,060
Nepean, Ontario, Canada K2E7U7 Condo fees
43 Rue Du Cdt Rolland Own 13,680
93350 - Le Bourget
Schatzbogen 43 Own 1,310 SM
D-81829 Munchen, Germany
1-20-32, Miyamae Own 6,671
Suginami-ku, Tokyo
MKS INSTRUMENTS, INC.
WAIVER AND FIRST AMENDMENT
TO LOAN AGREEMENT
This Waiver and First Amendment (the "Waiver and Amendment") dated as
of October 18, 1996 concerns the Loan Agreement dated as of February 23, 1996
(the "Loan Agreement"), among MKS Instruments, Inc. (the "Borrower"), The First
National Bank of Boston and The Chase Manhattan Bank (f/k/a Chemical Bank)
(together, the "Lenders"). Capitalized terms used herein but not otherwise
defined shall have the meanings assigned to them in the Loan Agreement.
WHEREAS, the Borrower has requested that the Lenders waive certain
Events of Default; and
WHEREAS, the Lenders are willing, on the terms, subject to the
conditions and to the extent set forth below, to grant such a waiver;
NOW, THEREFORE, the Lenders and the Borrower agree as follows:
Section 1. Waiver. The Lenders hereby waive the Events of Default under
Section 8.1(g), (k) and (l) of the Loan Agreement resulting from Borrower's
failure to meet the financial covenants set forth In Section 7.7(b) and (c) of
the Loan Agreement as of the end of the fiscal quarter ended June 30, 1996.
Section 2. Amendment to the Loan Agreement.
(a) Section 2.4.1. of the Loan Agreement is hereby amended by
deleting the existing language and substituting the following:
2.4.1. The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Advance from the date the proceeds
thereof are made available to the Borrower until maturity (whether by
acceleration, voluntary prepayment or otherwise) as follows. Each
Advance shall bear interest at the Base Rate in effect from time to
time unless the Borrower elects and qualifies to pay interest on such
Advance at the following rate (the "Adjusted LIBOR Rate"):
(i) During any period in which the Borrower maintains
a Debt-to-Net Worth Ratio of less than 1 to 1:
(a) and a Cash Flow Ratio of less than 1.40
to 1, the LIBOR Rate plus 1.65%;
(b) and a Cash Flow Ratio of 1.40 to 1 or
greater but less than 1.75 to 1, the LIBOR Rate plus
1.125%;
(c) and a cash Flow Ratio of 1.75 to 1 or
greater up to and including 2.5 to 1, the LIBOR Rate
plus .875%; or
(d) and a Cash Flow Ratio in excess of 2.5
to 1, the LIBOR Rate plus .625%;
(ii) During any period in which the Borrower
maintains a Debt-to-Net Worth Ratio of 1 to 1 or more but less
than or equal to 1.5 to 1:
(a) and a Cash Plow Ratio of less than 1.40
to 1, the LIBOR Rate plus 1.65%;
(b) and a Cash Flow Ratio of 1.40 to 1 or
greater but less than 1.75 to 1, the LIBOR Rate plus
1.25%;
(c) and a Cash Flow Ratio of 1.75 to 1 or
greater up to and including 2.5 to 1, the LIBOR Rate
plus 1.00%; or
(d) and a Cash Flow Ratio in excess of 2.5
to 1, the LIBOR Rate plus .75%.
Section 3. Representations and Warranties. The Borrower hereby
represents and warrants as follows:
(a) The execution and delivery of this Waiver and Amendment
and the performance or this Waiver and Amendment, the Loan Agreement as amended
hereby and each of the other Loan Documents, and the transactions contemplated
hereby and thereby, have been authorized by all necessary corporate actions of
the Borrower. This Waiver and Amendment, the Loan Agreement as amended hereby
and each of the other Loan Documents constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms.
(b) The Borrower has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Waiver and
Amendment, the Loan Agreement as amended hereby and each or the other Loan
Documents. Neither the authorization, execution, delivery or performance by the
Borrower of this Waiver and Amendment nor the performance of the Loan Agreement
as amended hereby or any other Loan Document nor the performance of the
transactions contemplated hereby or thereby violates or will violate any
provision of the corporate charter or by-laws of the Borrower, or does or will,
with the passage of time or the giving of notice or both, result in a breach of
or a default under, or require any consent under or result in the creation of
any lien, charge or encumbrance upon any property or assets of the Borrower
pursuant to, any material instrument, agreement or other
-2-
document to which the Borrower is a party or by which the Borrower or any of its
properties may be bound or affected.
(c) The execution and delivery by the Borrower of this Waiver
and Amendment and the performance by the Borrower of the Loan Agreement as
amended hereby and the Loan Documents do not and will not violate any provision
of law or regulation applicable to the Borrower, or any writ, order or decree of
any court or governmental or regulatory authority or agency applicable to the
Borrower.
Section 4. Loan Documents. This Waiver and Amendment shall be a Loan
Document for all purposes.
Section 5. Conditions to Effectiveness. The effectiveness of this
Waiver and Amendment is conditioned on the following:
(a) The Borrower and the Lenders shall each have executed and
delivered a counterpart of this Waiver and Amendment;
(b) The representations and warranties contained in Article IV
of the Loan Agreement shall be true and correct in all material respects as of
the date hereof as though made on and as of the date hereof; and
(c) No Default or Event of Default under the Loan Agreement
shall have occurred and be continuing other than the Events of Default described
in Section 1 hereof.
Section 6. Miscellaneous.
(a) On and after the date hereof, each reference in the Loan
Agreement to "this Agreement" or words of like import shall mean and be deemed
to be a reference to the Loan Agreement as amended hereby.
(b) Except as amended and modified hereby, the Loan Agreement
is in all respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.
(c) This Waiver and Amendment and the modifications to the
Loan Agreement set forth herein shall be deemed to be a document executed under
seal and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts.
(d) This Waiver and Amendment may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.
-3-
IN WITNESS WHEREOF, the parties have caused this Waiver and Amendment
to be duly executed as of the date and the year first above written.
MKS INSTRUMENTS, INC.
By: /s/ Robert F. O'Brien
-----------------------------
Title: Treasurer
--------------------------
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Sharon A. Stone
-----------------------------
Title: Director
--------------------------
THE CHASE MANHATTAN BANK
By: [illegible]
------------------------------
Title: Vice President
--------------------------
-4-
WAIVER
This Waiver (the "Waiver") dated as of October 18, 1996 concerns the
Loan Agreement dated as of November 1, 1993, as amended (the "1993 Loan
Agreement"), between MKS Instruments, Inc. (the "Borrower") and The First
National Bank of Boston (the "Lender') and the Loan Agreement dated as of
October 31, 1995, as amended (the "1995 Loan Agreement") between the Borrower
and the Lender. Capitalized terms used herein but not otherwise defined shall
have the meanings assigned to them in the 1993 and 1995 Loan Agreements.
The Lender hereby waives the Events of Default under Section 9.1(g),
(k) and (l) of the 1993 Loan Agreement and under Section 8.1(g), (k) and (l) of
the 1995 Loan Agreement resulting from (1) Borrower's failure to meet the
financial covenants set forth in Section 8.7(b) and (c) of the 1993 Loan
Agreement and Section 7.7(b) and (c) of the 1995 Loan Agreement as of the end of
the fiscal quarter ended June 30, 1996 and (2) the Event of Default that has
occurred under Section 8.1(g), (k) and (l) of the Loan Agreement dated as of
February 23, 1996 among the Borrower, the Lender and The Chase Manhattan Bank
(f/k/a Chemical Bank) as a result of Borrower's failure to met the financial
covenants set forth in Section 7.7(b) and (c) of such Loan Agreement as of the
end of the fiscal quarter ended June 30, 1996.
Except for the above waiver, the 1993 and 1995 Loan Agreements are in
all respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.
IN WITNESS WHEREOF, the Lender has caused this Waiver to be duly
executed as of the date and the year first above written.
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Sharon A. Stone
----------------------------------
Title: Director
-------------------------------
MKS INSTRUMENTS, INC.
WAIVER AND SECOND AMENDMENT
TO LOAN AGREEMENT
This Waiver and Second Amendment (the "Waiver and Amendment") dated as
of February 4, 1997 concerns the Loan Agreement dated as of February 23, 1996
(the "Loan Agreement"), among MKS Instruments, Inc. (the "Borrower"), The First
National Bank of Boston and The Chase Manhattan Bank (f/k/a Chemical Bank)
(together, the "Lenders"). Capitalized terms used herein but not otherwise
defined shall have the meanings assigned to them in the Loan Agreement.
WHEREAS, the Borrower has requested that the Lenders waive certain
Events of Default; and
WHEREAS, the Lenders are willing, on the terms, subject to the
conditions and to the extent set forth below, to grant such a waiver;
NOW, THEREFORE, the Lenders and the Borrower agree as follows:
Section 1. Waiver. The Lenders hereby waive the Events of Default under
Section 8.1(g), (k) and (l) of the Loan Agreement resulting from Borrower's
failure to meet the financial covenant set forth in Section 7.7(c) of the Loan
Agreement as of the end of the fiscal quarters ended September 30 and December
31, 1996.
Section 2. Amendment to the Loan Agreement.
(a) Section 2.4.1. of the Loan Agreement is hereby amended by adding
the following at the end thereof:
Notwithstanding the preceding clauses (i) and (ii), from June
30,1996 through June 30, 1997, the Adjusted LIBOR Rate shall
be the LIBOR Rate plus 1.65%.
(b) Section 7.7(c) of the Loan Agreement is hereby amended by deleting
the existing language and substituting the following:
(c) Cash Flow Ratio. The ratio ("Cash Flow Ratio") of Consolidated
Operating Cash Flow to Consolidated Debt Service:
(1) for the Borrower's fiscal quarter ending
March 31, 1997, shall not be less than 1.25 to 1.00;
(2) for the Borrower's two consecutive
fiscal quarters ending June 30, 1997, shall not be
less than 1.00 to 1.00;
(3) for the Borrower's three consecutive
fiscal quarters ending September 30, 1997, shall not
be less than 1.25 to 1.00; and
(4) for the Borrower's four consecutive
fiscal quarters ending December 31, 1997 and for each
series of four consecutive fiscal quarters of the
Borrower ending after December 31, 1997, shall not be
less than 1.25 to 1.00.
Section 3. Fees. The Borrower shall pay to the Agent, for the pro rata
benefit of the Lenders based on their Applicable Commitment Percentages, a fee
of $25,000 on the date of this Waiver and Amendment. If the parties agree to
another amendment of the Loan Agreement prior to the date 180 days after the
date of this Waiver and Amendment, the Lenders agree to reduce by $8,000 the fee
that would otherwise be required to induce the Lenders to agree to such
amendment.
Section 4. Representations and Warranties. The Borrower hereby
represents and warrants as follows:
(a) The execution and delivery of this Waiver and Amendment
and the performance of this Waiver and Amendment, the Loan Agreement as amended
hereby and each of the other Loan Documents, and the transactions contemplated
hereby and thereby, have been authorized by all necessary corporate actions of
the Borrower. This Waiver and Amendment, the Loan Agreement as amended hereby
and each of the other Loan Documents constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms.
(b) The Borrower has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Waiver and
Amendment, the Loan Agreement as amended hereby and each of the other Loan
Documents. Neither the authorization, execution, delivery or performance by the
Borrower of this Waiver and Amendment nor the performance of the Loan Agreement
as amended hereby or any other Loan Document nor the performance of the
transactions contemplated hereby or thereby violates or will violate any
provision of the corporate charter or by-laws of the Borrower, or does or will,
with the passage of time or the giving of notice or both, result in a breach of
or a default under, or require any consent under or result in the creation of
any lien, charge or encumbrance upon any property or assets of the Borrower
pursuant to, any material instrument, agreement or other document to which the
Borrower is a party or by which the Borrower or any of its properties may be
bound or affected.
-2-
(c) The execution and delivery by the Borrower of this Waiver
and Amendment and the performance by the Borrower of the Loan Agreement as
amended hereby and the Loan Documents do not and will not violate any provision
of law or regulation applicable to the Borrower, or any writ, order or decree of
any court or governmental or regulatory authority or agency applicable to the
Borrower.
Section 5. Loan Documents. This Waiver and Amendment shall be a Loan
Document for all purposes.
Section 6. Conditions to Effectiveness. The effectiveness of this
Waiver and Amendment is conditioned on the following:
(a) The Borrower and the Lenders shall each have executed and
delivered a counterpart of this Waiver and Amendment;
(b) The representations and warranties contained in Article IV
of the Loan Agreement shall be true and correct in all material respects as of
the date hereof as though made on and as of the date hereof;
(c) No Default or Event of Default under the Loan Agreement
shall have occurred and be continuing other than the Events of Default described
in Section 1 hereof; and
(d) The Borrower's audited consolidated financial statements
for the year ended December 31, 1996 shall not differ in any materially adverse
respect from the Borrower's unaudited consolidated financial statements for the
year ended December 31, 1996, which the Borrower has provided to the Lenders and
upon which the Lenders have relied in agreeing to this Waiver and Amendment.
Section 7. Miscellaneous.
(a) On and after the date hereof, each reference in the Loan
Agreement to "this Agreement" or words of like import shall mean and be deemed
to be a reference to the Loan Agreement as amended hereby.
(b) Except as amended and modified hereby, the Loan Agreement
is in all respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.
(c) This Waiver and Amendment and the modifications to the
Loan Agreement set forth herein shall be deemed to be a document executed under
seal and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts.
-3-
(d) This Waiver and Amendment may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.
IN WITNESS WHEREOF, the parties have caused this Waiver and Amendment
to be duly executed as of the date and the year first above written.
MKS INSTRUMENTS, INC.
By: /s/ Robert F. O'Brien
--------------------------------
Title: Treasurer
-----------------------------
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Sharon A. Stone
--------------------------------
Title: Director
-----------------------------
THE CHASE MANHATTAN BANK
By: [illegible]
--------------------------------
Title: Vice President
-----------------------------
-4-
MKS INSTRUMENTS, INC.
THIRD AMENDMENT
TO LOAN AGREEMENT
This Third Amendment (the "Amendment") dated as of February 2, 1998
concerns the Loan Agreement dated as of February 23, 1996 (the "Loan
Agreement"), among MKS Instruments, Inc. (the "Borrower"), BankBoston, N.A.
(f/k/a/ The First National Bank of Boston) and The Chase Manhattan Bank (f/k/a/
Chemical Bank) (together, the "Lenders"), and BankBoston, N.A. in its capacity
as agent for the Lenders (in such capacity, the "Agent") as amended on October
18, 1996 and February 4, 1997. Capitalized terms used herein but not otherwise
defined shall have the meanings assigned to them in the Loan Agreement.
WHEREAS, the Borrower has requested that the Lenders increase the Total
Revolving Credit Commitment and make certain other changes to the Loan
Agreement;
WHEREAS, the Lenders are willing, on the terms, subject to the conditions
and to the extent set forth below, to amend the Loan Agreement to effect such
changes;
NOW, THEREFORE, the Lenders and the Borrower agree as follows:
Section 1. Amendment of the Loan Agreement.
(a) Section 1.1 of the Loan Agreement is hereby amended by deleting the
paragraphs setting forth the definitions of "Revolver Termination Date" and
"Total Revolving Credit Commitment" and replacing them with the following
paragraphs:
"Revolver Termination Date" shall mean December 31, 1999 or any
subseqent anniversary thereof if the Total Revolving Credit Commitment
shall have been renewed by the Lenders.
"Total Revolving Credit Commitment" shall mean a principal amount
equal to $30,000,000.
(b) Section 2.4.1 of the Loan Agreement is hereby amended by deleting the
existing language and substituting the following:
2.4.1. The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Advance from the date the proceeds thereof are
made available to the Borrower until maturity (whether by acceleration,
voluntary prepayment or otherwise) as follows. Each Advance shall bear
interest at the Base Rate in effect from time to time unless the Borrower
elects and qualifies to pay interest on such Advance at the following rate
(the "Adjusted LIBOR Rate"):
(i) During any period in which the Borrower maintains a Debt-to-Net
Worth Ratio of less than 1.25 to 1:
(a) and a Cash Flow Ratio of less than 1.75 to 1, the LIBOR
Rate plus 1.125%;
(b) and a Cash Flow Ratio of 1.75 to 1 or greater up to and
including 2.5 to 1, the LIBOR Rate plus .875%; or
(c) and a Cash Flow Ratio in excess of 2.5 to 1, the LIBOR Rate
plus .625%;
(ii) During any period in which the Borrower maintains a Debt-to-Net
Worth Ratio greater than 1.25 to 1 but less than 1.5 to 1:
(a) and a Cash Flow Ratio of less than 1.75 to 1, the LIBOR
Rate plus 1.25%;
(b) and a Cash Flow Ratio of 1.75 to 1 or greater up to and
including 2.5 to 1, the LIBOR Rate plus 1.00%; or
(c) and a Cash Flow Ratio in excess of 2.5 to 1, the LIBOR Rate
plus .75%;
(c) Section 2.6 of Loan Agreement is hereby amended by replacing "0.25%"
set forth therein with "0.1875%".
Section 2. Representations and Warranties. The Borrower hereby
represents and warrants as follows:
(a) The execution and delivery of this Amendment and the performance
of this Amendment, the Loan Agreement as amended hereby and each of the other
Loan Documents, and the transactions contemplated hereby and thereby, have been
authorized by all necessary corporate actions of the Borrower. This Amendment,
the Loan Agreement as amended hereby and each of the other Loan Documents
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.
-2-
(b) The Borrower has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Amendment, the Loan
Agreement as amended hereby and each of the other Loan Documents. Neither the
authorization, execution, delivery or performance by the Borrower of this
Amendment nor the performance of the Loan Agreement as amended hereby or any
other Loan Document nor the performance of the transactions contemplated hereby
or thereby violates or will violate any provision of the corporate charter or
by-laws of the Borrower, or does or will, with the passage of time or the giving
of notice or both, result in a breach of or a default under, or require any
consent under or result in the creation of any lien, charge or encumbrance upon
any property or assets of the Borrower pursuant to, any material instrument,
agreement or other document to which the Borrower is a party or by which the
Borrower or any of its properties may be bound or affected.
(c) The execution and delivery by the Borrower of this Amendment
and the performance by the Borrower of the Loan Agreement as amended hereby and
the Loan Documents do not and will not violate any provision of law or
regulation applicable to the Borrower, or any writ, order or decree of any court
or governmental or regulatory authority or agency applicable to the Borrower.
Section 3. Loan Documents. This Amendment and the additional Revolving
Credit Notes referred to in Section 4(d) below shall be Loan Documents for all
purposes.
Section 4. Conditions to Effectiveness. The effectiveness of this
Amendment is conditioned on the following:
(a) The Borrower and the Lenders shall each have executed and
delivered a counterpart of this Amendment;
(b) The representations and warranties contained in Article IV of
the Loan Agreement shall be true and correct in all material respects as of the
date hereof as though made on and as of the date hereof;
(c) No Default or Event of Default under the Loan Agreement shall
have occurred and be continuing; and
(d) The Agent shall have received, in form and substance
satisfactory to the Agent and the Lenders:
(i) an opinion of independent counsel to the Borrower with
respect to this Amendment and the additional Revolving Credit Notes
referred to below;
(ii) a certificate as to the Borrower's legal existence and
good standing under the laws of The Commonwealth of Massachusetts;
-3-
(iii) a certificate of the Borrower's Clerk as to (x) no changes
in its charter documents and by-laws as amended, (y) corporate votes
authorizing the execution and delivery of this Amendment and the
replacement Revolving Credit Notes referred to below and (z)
incumbency of the officers authorized to execute this Amendment and
such replacement Revolving Credit Notes on behalf of the Borrower; and
(iv) a Revolving Credit Note to the order of each Lender, in the
aggregate amount of $30,000,000, each duly executed by the Borrower
and otherwise appropriately completed, in replacement of the currently
outstanding Notes.
In addition, the Borrower hereby represents that the conditions set forth
in clauses (a) - (e) of Section 5.1 of the Loan Agreement have been met as of
the date hereof, provided that the "Balance Sheet Date" for purposes thereof
shall mean September 27, 1997 and the financial statements referred to in
Section 4.5 of the Loan Agreement are not audited.
Section 5. Miscellaneous.
(a) On and after the date hereof, each reference in the Loan
Agreement to "this Agreement" or words of like import shall mean and be deemed
to be a reference to the Loan Agreement as amended hereby.
(b) Except as amended and modified hereby, the Loan Agreement is in
all respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.
(c) This Amendment and the modifications to the Loan Agreement set
forth herein shall be deemed to be a document executed under seal and shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.
(d) This Amendment may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same document.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date and the year first above written.
MKS INSTRUMENTS, INC.
By: /s/ Robert F. O'Brien
----------------------------------
Title: Treasurer
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BANKBOSTON, N.A.,
Individually and as Agent
By: /s/ Sharon A. Stone
--------------------------
Title: Director
-----------------------
THE CHASE MANHATTAN BANK
By:
--------------------------
Title:
-----------------------
-5-
BANKBOSTON, N.A.,
Individually and as Agent
By:
--------------------------
Title:
-----------------------
THE CHASE MANHATTAN BANK
By: /s/ Illegible Signature
--------------------------
Title: Vice President
-----------------------
[BANKBOSTON LETTERHEAD]
[BANKBOSTON LOGO]
December 29, 1997
MKS Instruments, Inc.
Six Shamrock Road
Andover, MA 01890
Attention: Robert F. O'Brien, Treasurer
Re: Proposed Credit Facilities
Ladies and Gentlemen:
BankBoston, N.A. (f/k/a The First National Bank of Boston) (the "Agent")
is pleased to inform you of the commitment of BankBoston, N.A. and The Chase
Manhattan Bank (f/k/a/ Chemical Bank) (together, the "Lenders") to amend the
Loan Agreement dated as of February 23, 1996, as amended (the "Loan Agreement")
among you (the "Borrower") and the Lenders per the terms and conditions set
forth on the attached Term Sheet and the terms and conditions set forth in this
letter. Please understand that the Term Sheet does not purport to include all
of the terms and conditions which will be contained in the definitive documents
for this transaction. Therefore, this commitment is subject to the execution of
loan documentation containing terms and conditions customary in bank financing
documents in transactions of this type and, in any event, satisfactory to the
Lenders and their counsel. In connection therewith, the Borrower agrees to
provide the Lenders and their counsel with all such documents, certificates,
opinions, assurances and other materials, and take such further actions, as we
may reasonably request. Additionally, all closing costs, legal or otherwise,
are the Borrower's responsibility, whether or not the financing actually
closes.
The Lenders' commitment under this letter is based on their review of
certain historical financial statements, projections and other information
provided to the Lenders by you. At the Lenders' election, their commitment
under this letter shall terminate if, at any time: (a) any information
submitted to the Lenders or any material representation, warranty or statement
made to the Lenders by or on behalf of the Borrower in connection with the
commitment shall prove to have been inaccurate, incomplete or misleading in any
material respect, (b) any material adverse change occurs after, or any
additional information is disclosed to or discovered by the Lenders which the
Lenders reasonably deem to be materially adverse, with respect to the condition
(financial or otherwise), business, operations, assets, liabilities or
prospects of the Borrower or (c) any condition to lending set forth in this
letter or the Term Sheet is not or cannot be satisfied.
In consideration of the Lenders' commitment, the Borrower agrees, whether
or not the contemplated financing actually closes, to reimburse the Lenders
promptly upon request for any and all reasonable out-of-pocket costs, expenses
and fees (including without limitation reasonable attorneys' fees and expenses)
heretofore or hereafter incurred by the Lenders in connection with the
negotiation, preparation and/or execution and delivery of the Term Sheet and
this letter and the definitive loan documentation, if any, relating thereto.
Please review the attached Term Sheet at your convenience. If this
commitment is acceptable to you, please sign and return the enclosed copy of
this letter to the attention of Sharon Stone, on or before
January 10, 1998. This commitment shall expire (a) as of such date, if the
Agent has not received your signed acceptance, and (b) in any event, following
such acceptance, on February 28, 1998, unless by such date the contemplated
financing shall have been consummated.
This letter (a) shall be governed by the internal laws of the Commonwealth
of Massachusetts, (b) represents the entire agreement among the parties hereto
and supersedes all prior correspondence and dealings, (c) is not assignable to
any other party and (d) may only be amended or modified in a written instrument
signed by the parties.
We are pleased to make this financing available and look forward to a
continuation of our relationship with you.
Very truly yours,
BANKBOSTON, N.A.
By: /s/ Sharon A. Stone
-------------------------
Sharon A. Stone, Director
AGREED:
THE CHASE MANHATTAN BANK
By:
--------------------------
Title:
-----------------------
ACCEPTED AND AGREED:
MKS INSTRUMENTS, INC.
By: /s/ Robert J. O'Brien
--------------------------
Title: Treasurer
-----------------------
Date: 12/31/97
------------------------
2
January 10, 1998. This commitment shall expire (a) as of such date, if the
Agent has not received your signed acceptance, and (b) in any event, following
such acceptance, on February 28, 1998, unless by such date the contemplated
financing shall have been consummated.
This letter (a) shall be governed by the internal laws of the Commonwealth
of Massachusetts, (b) represents the entire agreement among the parties hereto
and supersedes all prior correspondence and dealings, (c) is not assignable to
any other party and (d) may only be amended or modified in a written instrument
signed by the parties.
We are pleased to make this financing available and look forward to a
continuation of our relationship with you.
Very truly yours,
BANKBOSTON, N.A.
By:
-------------------------
Sharon A. Stone, Director
AGREED:
THE CHASE MANHATTAN BANK
By: /s/ Illegible Signature
--------------------------
Title: Vice President
-----------------------
ACCEPTED AND AGREED:
MKS INSTRUMENTS, INC.
By:
--------------------------
Title:
-----------------------
Date:
------------------------
2
[BankBoston Letterhead]
Confidential [BankBoston Logo]
MKS Instruments, Inc.
Term Sheet
December 29, 1997
Resolving Credit
Commitment: Increase the Total Revolving Credit Commitment from
$20,000,000 to $30,000,000. The Applicable Commitment
Percentage of each Lender would remain the same with
BankBoston's Revolving Credit Commitment increasing to
$18,000,000 and Chase's Revolving Credit Commitment
increasing to $12,000,000.
Maturity: Extend the Revolver Termination Date from June 30, 1999 to
December 31, 1999.
Interest Rates: Amend the interest rates as follows:
The Agent's Base Rate or LIBOR plus the Applicable Margin
determined quarterly in accordance with the following
Pricing Grid:
For Debt-to-Net Worth Ratio greater than 1.25:1, but less
than 1.5:1:
Level Alt. Base + LIBOR +
----- ----------- -------
I. Cash Flow Ratio > 2.5 0 75 bp
II. Cash Flow Ratio 1.75 - 2.5 0 100 bp
III. Cash Flow Ratio < 1.75 0 125 bp
For Debt-to-Net Worth Ratio less than 1.25:1:
Level Alt. Base + LIBOR +
----- ----------- -------
I. Cash Flow Ratio > 2.5 0 62.5 bp
II. Cash Flow Ratio 1.75 - 2.5 0 87.5 bp
III. Cash Flow Ratio < 1.75 0 112.5 bp
Unused
Commitment Fee: Reduce the Unused Commitment Fee to 3/16% per annum.
All other terms and conditions of the existing Loan Agreement will remain in
full force and effect.
MKS INSTRUMENTS, INC.
WAIVER AND FIFTH AMENDMENT
TO LOAN AGREEMENT
This Waiver and Fifth Amendment (the "Waiver and Amendment") dated as of
January 28, 1999 concerns the Loan Agreement dated as of February 23, 1996 (the
"Loan Agreement"), among MKS Instruments, Inc. (the "Borrower"), BankBoston,
N.A. (f/k/a The First National Bank of Boston) and The Chase Manhattan Bank
(f/k/a Chemical Bank) (together, the "Lenders"), and BankBoston, N.A. in its
capacity as agent for the Lenders (in such capacity, the "Agent") as amended on
October 18, 1996, February 4, 1997, February 2, 1998 and February 3, 1998.
Capitalized terms used herein but not otherwise defined shall have the meanings
assigned to them in the Loan Agreement.
WHEREAS, the Borrower has requested that the Lenders waive certain Events
of Default and agree to change certain financial covenants in the Loan
Agreement;
WHEREAS, the Lenders are willing, on the terms, subject to the conditions
and to the extent set forth below, to grant such waiver and amend the Loan
Agreement to effect such changes;
NOW, THEREFORE, the Lenders and the Borrower agree as follows:
Section 1. WAIVER. The Lenders hereby waive the Events of Default under
Section 8.1(g), (k) and (l) of the Loan Agreement resulting from Borrower's
failure to meet the financial covenant set forth in Section 7.7(c) of the Loan
Agreement as of the end of the fiscal quarter ended December 31, 1998.
Section 2. AMENDMENT OF THE LOAN AGREEMENT.
(a) Section 2.4.1. of the Loan Agreement is hereby amended by adding the
following sentences at the end thereof:
Notwithstanding the preceding clauses (i) and (ii), from the date hereof
through the date on which the effect of a change resulting from the
Borrower's delivery of its financial statements and Compliance Certificate
for the quarter ending June 30, 1999 will take effect, the only alternative
to the Base Rate shall be the LIBOR Rate plus 1.65%.
The effect of any change to the Borrower's Debt-to-Net Worth Ratio or Cash
Flow Ratio on the interest rate available pursuant to Section 2.4.1(i) or
(ii) shall take effect on the first day of the month immediately following
the month in
-1-
which the Borrower delivers its financial statements pursuant to Section
6.1(a) or (b) and Compliance Certificate pursuant to Section 6.1(c).
(b) Section 7.7(c) of the Loan Agreement is hereby amended by adding the
following clause at the end thereof:
provided, however, that as of the end of each of the fiscal quarters listed
below, the Cash Flow Ratio shall not be less than the ratio stated directly
below such quarter:
[Download Table]
Q4 1998 Q1 1999 Q2 1999 Q3 1999
------- ------- ------- --------
.6 to 1 .5 to 1 .5 to 1 1.1 to 1
provided, however, that, the foregoing notwithstanding, if the Cash Flow
Ratio for the first fiscal quarter of 1999 is less than 1 to 1, then the
Cash Flow Ratio for the second fiscal quarter of 1999 shall not be less
than 1 to 1 and further, that the Cash Flow Ratio for the first and second
fiscal quarters of 1999 shall mean the ratio as of the end of each such
quarter of (i) Consolidated Operating Cash Flow for such fiscal quarter
ended on such date to (ii) Consolidated Debt Service for such quarter and
that the Cash Flow Ratio for the third fiscal quarter of 1999 shall mean
the ratio as of the end of such quarter of (i) Consolidated Operating Cash
Flow for the first three fiscal quarters of 1999 ended on such date to (ii)
Consolidated Debt Service for such quarters.
(c) Section 7.7 of the Loan Agreement is hereby amended by adding the
following subsection (d):
(d) EBIT-TO-INTEREST RATIO. The ratio of the sum of Consolidated Net
Income plus Interest Expense, the interest portion of Financing Lease
Obligations and all taxes in respect of income and profits paid or payable
(including accrued Sub S distributions required to make shareholder tax
payments) as of the end of each fiscal quarter of the Borrower beginning
with the fiscal quarter ended December 31, 1998 to Interest Expense during
such quarter shall not be less than 2 to 1 for the fiscal quarters ending
December 31, 1998 and March 31, 1999 and 3 to 1 for the fiscal quarters
ending June 30, 1999 and September 30, 1999.
Section 3. FEES. The Borrower shall pay to the Agent, for the pro rata
benefit of the Lenders, based on their Applicable Commitment Percentages, a fee
of $45,000 on the date of this Waiver and Amendment.
Section 4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants as follows:
-2-
(a) The execution and delivery of this Waiver and Amendment and the
performance of this Waiver and Amendment, the Loan Agreement as amended hereby
and each of the other Loan Documents, and the transactions contemplated hereby
and thereby, have been authorized by all necessary corporate actions of the
Borrower. This Waiver and Amendment, the Loan Agreement as amended hereby and
each of the other Loan Documents constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms.
(b) The Borrower has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Waiver and Amendment,
the Loan Agreement as amended hereby and each of the other Loan Documents.
Neither the authorization, execution, delivery or performance by the Borrower of
this Waiver and Amendment nor the performance of the Loan Agreement as amended
hereby or any other Loan Document nor the performance of the transactions
contemplated hereby or thereby violates or will violate any provision of the
corporate charter or by-laws of the Borrower, or does or will, with the passage
of time or the giving of notice or both, result in a breach of or a default
under, or require any consent under or result in the creation of any lien,
charge or encumbrance upon any property or assets of the Borrower pursuant to,
any material instrument, agreement or other document to which the Borrower is a
party or by which the Borrower or any of its properties may be bound or
affected.
(c) The execution and delivery by the Borrower of this Waiver and
Amendment and the performance by the Borrower of the Loan Agreement as amended
hereby and the Loan Documents do not and will not violate any provision of law
or regulation applicable to the Borrower, or any writ, order or decree of any
court or governmental or regulatory authority or agency applicable to the
Borrower.
Section 5. LOAN DOCUMENTS. This Waiver and Amendment shall be a Loan
Document for all purposes.
Section 6. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Waiver and Amendment is conditioned on the following:
(a) The Borrower and the Lenders shall each have executed and
delivered a counterpart of this Waiver and Amendment;
(b) The representations and warranties contained in Article IV
of the Loan Agreement shall be true and correct in all material respects as of
the date hereof as though made on and as of the date hereof;
-3-
(c) No Default or Event of Default under the Loan Agreement
shall have occurred and be continuing other than the Events of Default described
in Section 1 hereof;
(d) The Agent shall have received, in form and substance
satisfactory to the Agent and the Lenders:
(i) an opinion of independent counsel to the Borrower
with respect to this Waiver and Amendment;
(ii) a certificate as to the Borrower's legal existence
and good standing under the laws of The Commonwealth of Massachusetts;
and
(iii) a certificate of the Borrower's Clerk as to (x) no
changes in its charter documents and by-laws as amended, (y) corporate
votes authorizing the execution and delivery of this Waiver and
Amendment and (z) incumbency of the officers authorized to execute
this Waiver and Amendment on behalf of the Borrower;
(e) The Borrower's audited consolidated financial statements for
the year ended December 31, 1998 (the "1998 Statements") shall not differ in any
materially adverse respect from the Borrower's unaudited consolidated financial
statements for the year ended December 31, 1998, which the Borrower has provided
to the Lenders and upon which the Lenders have relied in agreeing to this Waiver
and Amendment and the Borrower shall deliver the 1998 Statements to the Lenders
no later than 30 days after the date of this Waiver and Amendment.
(f) The conditions set forth in clauses (b) - (e) of Section 5.1
of the Loan Agreement shall have been met as of the date hereof, provided that
for purposes thereof and Section 4.5 of the Loan Agreement, the "Balance Sheet
Date" shall mean December 31, 1998 and the financial statements referred to
therein shall mean the unaudited statements for the year ended December 31,
1998, that have been furnished to the Lenders.
Section 7. MISCELLANEOUS.
(a) On and after the date hereof, each reference in the Loan
Agreement to "this Agreement" or words of like import shall mean and be deemed
to be a reference to the Loan Agreement as amended hereby.
(b) Except as amended and modified hereby, the Loan Agreement is
in all respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.
-4-
(c) This Waiver and Amendment and the modifications to the Loan
Agreement set forth herein shall be deemed to be a document executed under seal
and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts.
(d) This Waiver and Amendment may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.
IN WITNESS WHEREOF, the parties have caused this Waiver and Amendment to be
duly executed as of the date and the year first above written.
MKS INSTRUMENTS, INC.
By: /s/ William P. Donlan
---------------------
Title: Treasurer
BANKBOSTON, N.A.
Individually and as Agent
By: /s/ Sharon A. Stone
-------------------
Title: Director
THE CHASE MANHATTAN BANK
By: /s/ Joan Considine
------------------
Title: Vice President
-5-
Dates Referenced Herein and Documents Incorporated by Reference
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