EXHIBIT 10.23
MASTER REAFFIRMATION AND AMENDMENT NO. 2
TO LOAN DOCUMENTS
THIS MASTER REAFFIRMATION AND AMENDMENT NO. 2 TO LOAN DOCUMENTS (this
"AGREEMENT") is made as of the 26th day of June, 2002, by and among ZYGO
CORPORATION, a Delaware corporation with its principal place of business located
at Laurel Brook Road, Middlefield, Connecticut 06455 ("ZYGO"), ZTO PROPERTY
HOLDINGS, LLC, a Delaware limited liability company with its principal place of
business located at 20 Walkup Drive, Westborough, Massachusetts 01581 ("ZTO"),
ZYGO TERAOPTIX, INC., a Delaware corporation with its principal place of
business located at 100 Kuniholm Drive, Holliston, Massachusetts 01746
("TERAOPTIX" and together with Zygo and ZTO, the "OBLIGORS"), and FLEET NATIONAL
BANK, a national bank with a place of business at 777 Main Street, Hartford,
Connecticut 06115 ("LENDER"). Unless otherwise defined herein, capitalized terms
used herein shall have the meanings ascribed to them in the Credit Agreement
described below.
W I T N E S S E T H:
WHEREAS, Obligors and Lender are parties to that certain Amended and
Restated Credit Agreement dated as of May 14, 2001 (as amended, modified,
restated or otherwise supplemented from time to time, including, but not limited
to, that certain Master Reaffirmation and Amendment to Loan Documents dated as
of November 22, 2001, the "CREDIT AGREEMENT"), pursuant to which, among other
things, Lender has extended to Zygo a commercial revolving loan/letter of credit
facility in the original principal amount of up to $3,000,000 (the "REVOLVING
CREDIT FACILITY"); and
WHEREAS, ZTO and TeraOptix have each, among other things, unconditionally
guaranteed payment and performance of the Obligations of Zygo under the
Revolving Credit Facility, whether now existing or hereafter arising, pursuant
and subject to the terms and conditions set forth in their respective Guaranty
Agreements; and
WHEREAS, Obligors have each requested Lender to amend the financial
covenants of Obligors set forth in Sections 7.1 and 7.2 of the Credit Agreement;
and
WHEREAS, Lender is willing to make the accommodations requested by Obligors
subject to and in reliance upon the representations, warranties,
acknowledgments, covenants and agreements of Obligors contained herein.
NOW, THEREFORE, in consideration of the premises set forth herein (which
are incorporated herein as though fully set forth below, by this reference
thereto) and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the undersigned agrees as
follows:
24. Amendments to Credit Agreement and other Loan Documents.
a. Each reference in the Loan Documents to the Credit Agreement shall mean
the Credit Agreement as modified by this Agreement.
b. Section 1.1 of the Credit Agreement, entitled "Defined Terms", is hereby
amended by deleting the definition of "Applicable Margin" in its entirety and
inserting the following in lieu thereof:
"Applicable Margin" means for each LIBOR Loan then outstanding:
(a) for the period commencing on the date hereof and ending on
the day immediately preceding the Initial Adjustment Date, 1.0% above
the applicable LIBOR Rate; and
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(b) for each period commencing on an Adjustment Date (including,
but not limited to, the Initial Adjustment Date) and ending on the day
immediately preceding the next Adjustment Date, the percentage rate
set forth below opposite the level of Zygo's consolidated financial
performance as measured by its Consolidated Leverage Ratio as of the
end of its most recent fiscal quarter for the then ended Rolling
Period (as determined on the basis of the financial statements
required to be delivered in respect of such Adjustment Date):
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LIBOR
LEVEL CONSOLIDATED LEVERAGE RATIO MARGIN
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I <0.75x 1.00%
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II >0.75x, but < 1.25x 1.25%
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III >1.25x, but < 2.00x 1.50%
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IV >2.00but < 400x 2.00%
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V >4.00 2.50%
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By way of illustration, if Zygo's Consolidated Leverage Ratio on
June 30, 2002 is 1.70 to 1.0, then, effective on the first day
following the date upon which Zygo's June, 2002 quarterly compliance
certificate and quarterly financial statements are received by Lender,
the interest rate applicable to the LIBOR Loans shall be adjusted (if
not the same) to be priced at the LIBOR Rate plus 1.50%.
c. Section 1.1 of the Credit Agreement, entitled "Defined Terms", is hereby
amended by adding the following definitions in the appropriate alphabetical
order:
"Consolidated Liquidity Ratio" means, as of each applicable date,
the ratio of (a) the Liquid Asset Amount as of such date, to (b)
Senior Funded Debt as of such date.
"Liquid Asset Amount" means, as of each applicable date, the sum
of all assets of the Obligors on such date consisting of cash, cash
equivalents, marketable securities and accounts receivable (which
shall be valued at ninety percent (90%) the face amount thereof less
any and all rebates, discounts, credits or other allowances applicable
thereto).
"Net Worth" means, at a particular date, (a) Total Assets as of
such date, minus (b) Total Liabilities as of such date.
"Total Assets" means, as of any particular date, all assets of
the Obligors that, in accordance with GAAP, would properly be
classified as assets on the consolidated balance sheet of the Obligors
as of such date.
"Total Liabilities" means, as of any particular date, all Debt
and other liabilities of the Obligors that, in accordance with GAAP,
would properly be classified as liabilities on the consolidated
balance sheet of the Obligors as of such date, but, in any event,
shall exclude (if not otherwise excluded in accordance with GAAP)
liabilities of an Obligor to another Obligor.
d. Article VII of the Credit Agreement, entitled "FINANCIAL COVENANTS", is
hereby amended by deleting Sections 7.1 and 7.2 their entirety and inserting the
following in lieu thereof:
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Section 7.1 Consolidated Fixed Charge Coverage Ratio. Maintain a
Consolidated Fixed Charge Coverage Ratio of not less than 1.50-to-1.0
as of the end of each fiscal quarter for the then ended Rolling Period
commencing with the fiscal quarter ending on June 30, 2004.
Section 7.2 Consolidated Senior Funded Debt-to-EBITDA Ratio. Not
permit its Consolidated Senior Funded Debt-to-EBITDA Ratio to exceed
2.0 to 1.0 as of the end of each fiscal quarter for the then ended
Rolling Period commencing with the fiscal quarter ending on June 30,
2004.
Section 7.3 Consolidated Liquidity Ratio. Maintain a Consolidated
Liquidity Ratio of not less than 2.0-to-1.0 as of the end of each
fiscal quarter.
Section 7.4 Net Worth. Maintain a Net Worth of not less than (a)
$135,000,000 as of June 30, 2002, (b) $131,000,000 as of September 30,
2002, (c) $128,000,000 as of December 31, 2002, (d) $125,000,000 as of
March 31, 2003, and (e) the sum of (i) $125,000,000 as of each fiscal
quarter thereafter, plus (ii) seventy-five percent of Net Income for
each Fiscal Year commencing with the Fiscal Year ending June 30, 2003,
on a cumulative basis; PROVIDED, HOWEVER, that in the event a
reduction in the valuation of TeraOptix and/or ZTO is required to be
made in accordance with GAAP during any particular period, the
applicable Net Worth requirement hereunder shall be reduced by the
aggregate amount of any such reduction.
25. Reaffirmation. Each of Obligors, as maker, debtor, grantor, pledgor,
assignor, obligor, or in other similar capacity in which it incurs obligations
to Lender or grants liens or security interests in its properties under any of
the Loan Documents, hereby ratifies and reaffirms all of its Obligations,
contingent or otherwise, under each of the Loan Documents to which it is a party
and, to the extent it granted liens on or security interests in any of its
properties pursuant to any Loan Document as security for the Obligations under
or with respect to the Credit Agreement and the other Loan Documents, hereby
ratifies and reaffirms such grant of liens and security interests and confirms
and agrees that such liens and security interests hereafter secure all of the
Obligations, including without limitation, the Obligations arising under the
Revolving Credit Facility, as hereby amended, in each case as if each reference
in such Loan Document to the obligations secured thereby are construed to
hereafter mean and refer to such Obligations under the Credit Agreement and
other Loan Documents, as hereby amended. Each of Obligors acknowledges that each
of the Loan Documents to which it is a party remains in full force and effect,
continues to apply to the Obligations, including, but not limited to, the
Obligations arising under the Revolving Credit Facility as hereby amended, and
is hereby ratified and confirmed. The execution of this Agreement shall not
operate as a novation, waiver of any right, power or remedy of Lender nor
constitute a waiver of any provision of any of the Loan Documents, except as
expressly set forth herein and shall be limited to the particular instance
expressly set forth. Each of Obligors confirms and agrees that the Loan
Documents and each and every covenant, condition, obligation, representation
(except those representations which relate only to a specific date, which are
confirmed as of such date only), warranty and provisions set forth therein are,
and shall continue to be, in full force and effect and are hereby confirmed,
reaffirmed and ratified in all respects.
26. No Default or Event of Default, No Defenses. Each of Obligors hereby
represents and warrants to, and covenants with Lender that, as of the date
hereof, (a) no Default or Event of Default has occurred and is continuing, (b)
it has no defense, offset or counterclaim of any kind or nature whatsoever
against Lender with respect to the Revolving Credit Facility, the Obligations,
or any of the Loan Documents to which it is a party, or any action previously
taken or not taken by Lender with respect thereto or with respect to any
security interest, encumbrance, lien or collateral in connection therewith to
secure the Obligations, and (c) that Lender has fully performed all obligations
to Obligors which it may have had or has on and as of the date hereof.
27. Fee. Simultaneously herewith, in consideration of the Lender's extension of
the Maturity Dates of the Revolving Loan Commitment and L/C Commitment
Termination Date, Zygo shall pay to Lender on the date hereof a non-refundable
commitment fee in the amount of $7,500.
28. Successors and Assigns. This Agreement shall be binding upon each of
Obligors and their respective successors and assigns, and shall inure to the
benefit of Lender and its successors and assigns. The successors and assigns of
such entities shall include, without limitation, their respective receivers,
trustees, or debtors-in-possession.
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29. Further Assurances. Each of Obligors hereby agrees from time to time, as and
when requested by Lender, to execute and deliver or cause to be executed and
delivered all such documents, instruments and agreements and to take or cause to
be taken such further or other action as Lender may reasonably deem necessary or
desirable in order to carry out the intent and purposes of this Agreement and
the Loan Documents.
30. Authorization. Each of Obligors is duly authorized to execute and deliver
this Agreement and to perform its obligations under the Credit Agreement and the
other Loan Documents to which it is a party, each as amended hereby.
31. No Conflicts. The execution and delivery of this Agreement, and the
performance by each of Obligors of their respective obligations hereunder and
under any Loan Documents to which any of them may be a party, each as amended
hereby to the extent applicable, do not and will not conflict with any provision
of law or of the charter or by-laws of any of them or of any agreement binding
upon any of them.
32. Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
33. Merger. This Agreement represents the final agreement of Obligors and Lender
with respect to the matters contained herein and may not be contradicted by
evidence of prior or contemporaneous agreements, or prior or subsequent oral
agreements.
34. Execution in 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 shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
35. Section Headings. The section headings herein are for convenience of
reference only, and shall not affect in any way the interpretation of any of the
provisions hereof.
36. Governing Law. This Agreement shall be governed by the internal substantive
laws of the State of Connecticut (without regard to its conflicts of law
provisions).
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
THE NEXT PAGE IS THE SIGNATURE PAGE
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
undersigned as of the day and year first set forth above.
WITNESSES (AS TO OBLIGORS):
_______________________________ ZYGO CORPORATION
_______________________________ By: /s/ Richard M. Dressler
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Richard M. Dressler
Its Treasurer
ZTO PROPERTY HOLDINGS, LLC
By: /s/ Richard M. Dressler
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Richard M. Dressler
Its Treasurer
ZYGO TERAOPTIX, INC.
By: /s/ Richard M. Dressler
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Richard M. Dressler
Its Treasurer
WITNESSES (AS TO LENDER):
_______________________________ FLEET NATIONAL BANK
By: /s/ Matthew E. Hummel
_______________________________ -----------------------------------------
Matthew E. Hummel
Its Senior Vice President
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