Exhibit 10.37
CREDIT AGREEMENT
by and among
MKS INSTRUMENTS, INC.,
as Borrower,
FLEET NATIONAL BANK
as Agent and as Lender,
and
THE CHASE MANHATTAN BANK,
as Lender
Dated as of July 31, 2001
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS...................................................... 2
1.1 Definitions..................................................... 2
1.2 Accounting Terms................................................ 10
1.3 Other Definitional Provisions................................... 10
ARTICLE II. REVOLVING CREDIT FACILITY....................................... 10
2.1 Revolving Credit................................................ 10
2.2 Advances........................................................ 11
2.3 Revolving Loan Account.......................................... 12
2.4 Interest........................................................ 13
2.5 Interest Periods................................................ 13
2.6 Unused Commitment Fee........................................... 14
2.7 Deficiency Advances............................................. 14
ARTICLE III. LETTER OF CREDIT FACILITY...................................... 14
3.1 Letter of Credit Commitment..................................... 14
3.2 Reimbursement Obligation of the Borrower........................ 15
3.3 Letter of Credit Payments....................................... 16
3.4 Obligations Absolute............................................ 16
3.5 Reliance by Issuer.............................................. 16
3.6 Letter of Credit Fees........................................... 16
ARTICLE IV. ADDITIONAL TERMS................................................ 17
4.1 Payments........................................................ 17
4.2 Capital Adequacy................................................ 18
4.3 Special Provisions Governing LIBOR Loans........................ 19
4.4 Taxes........................................................... 20
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE BORROWER................... 21
5.1 Organization, Existence and Power............................... 21
5.2 Authorization of Loan Documents; Binding Effect................. 21
5.3 Authority....................................................... 21
5.4 Capital Structure............................................... 22
5.5 Financial Condition............................................. 22
5.6 Pending Litigation.............................................. 22
5.7 Certain Agreements; Material Contracts.......................... 23
5.8 Authorization, Etc.............................................. 23
5.9 No Violation.................................................... 23
5.10 Payment of Taxes................................................ 24
5.11 Transactions With Affiliates, Officers, Directors and 1%
Shareholders.................................................... 24
5.12 ERISA........................................................... 24
5.13 Ownership of Properties; Liens.................................. 24
5.14 Employment Matters.............................................. 25
5.15 Insurance....................................................... 25
5.16 Indebtedness.................................................... 25
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5.17 Securities Law Compliance....................................... 25
5.18 Accuracy of Information......................................... 25
ARTICLE VI. CONDITIONS TO ADVANCES.......................................... 25
6.1 Each Advance.................................................... 25
6.2 First Advance................................................... 26
ARTICLE VII. AFFIRMATIVE COVENANTS OF THE BORROWER.......................... 27
7.1 Reporting Requirements.......................................... 27
7.2 Loan Proceeds................................................... 28
7.3 Maintenance of Business and Properties; Insurance............... 29
7.4 Payment of Taxes................................................ 29
7.5 Compliance with Laws, etc....................................... 29
7.6 Books, Records and Accounts..................................... 30
7.7 Further Assurances.............................................. 30
7.8 Bank Accounts................................................... 30
7.9 Guaranties...................................................... 30
ARTICLE VIII. NEGATIVE COVENANTS OF THE BORROWER............................ 30
8.1 Sale of Assets; Mergers, Etc.................................... 30
8.2 Liens and Encumbrances.......................................... 31
8.3 Sales and Leasebacks............................................ 33
8.4 Indebtedness.................................................... 33
8.5 Dividends and Distributions..................................... 34
8.6 Investments..................................................... 34
8.7 Transactions with Affiliates.................................... 36
8.8 ERISA Compliance................................................ 36
8.9 Tangible Net Worth Test......................................... 36
8.10 Total Liabilities-to-Tangible Net Worth Ratio................... 36
8.11 Quick Ratio..................................................... 36
8.12 Capital Expenditures............................................ 36
8.13 Contracts Prohibiting Compliance with Agreement................. 36
ARTICLE IX. EVENTS OF DEFAULT............................................... 37
9.1 Default......................................................... 37
9.2 Agent to Act.................................................... 38
9.3 Cumulative Rights............................................... 39
9.4 No Waiver....................................................... 39
9.5 Allocation of Proceeds.......................................... 39
ARTICLE X. THE AGENT........................................................ 39
10.1 Appointment..................................................... 39
10.2 Limitation on Liability......................................... 40
10.3 Reliance........................................................ 40
10.4 Notice of Default............................................... 40
10.5 No Representations.............................................. 41
10.6 Indemnification................................................. 41
10.7 The Agent in its Individual Capacity............................ 41
10.8 Resignation..................................................... 42
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10.9 Sharing of Payments, Etc........................................ 42
10.10 Fees............................................................ 42
ARTICLE XI. MISCELLANEOUS................................................... 43
11.1 Assignments and Participations.................................. 43
11.2 Survival of Representations, Etc................................ 44
11.3 Right of Setoff................................................. 44
11.4 Indemnity; Costs, Expenses and Taxes............................ 44
11.5 Notices......................................................... 45
11.6 MASSACHUSETTS LAW............................................... 46
11.7 Counterparts.................................................... 46
11.8 JURISDICTION, SERVICE OF PROCESS................................ 46
11.9 Limit on Interest............................................... 47
11.10 Amendments...................................................... 47
11.11 Headings........................................................ 48
11.12 WAIVER OF NOTICE, ETC........................................... 48
11.13 Severability.................................................... 48
11.14 Entire Agreement................................................ 49
11.15 Compliance with Covenants....................................... 49
11.16 Termination..................................................... 49
11.17 WAIVER OF TRIAL BY JURY......................................... 49
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CREDIT AGREEMENT
This Credit Agreement (the "Agreement") is entered into as of the 31st day
of July, 2001, by and among Fleet National Bank ("Fleet"), The Chase Manhattan
Bank ("Chase"; hereinafter Fleet and Chase may be referred to individually as a
"Lender" or collectively as the "Lenders"), Fleet in its capacity as agent for
the Lenders (in such capacity, together with any successor agent appointed in
accordance with the terms of Section 10.8, the "Agent"), and MKS Instruments,
Inc., a Massachusetts corporation ("Borrower").
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:
"Accounts" shall mean, at any time, all accounts receivable of
Borrower and its subsidiaries on a consolidated basis determined in accordance
with GAAP appearing on the Borrower's consolidated balance sheet.
"Adjustment Date" shall mean the first day of the month immediately
following the month in which a Compliance Certificate is to be delivered by the
Borrower pursuant to Section 7.1(c).
"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
Commitment and the denominator of which shall be the Total Commitment, which
Applicable Commitment
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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 11.1.
"Applicable Margin" shall mean for each period commencing on an
Adjustment Date through the date immediately preceding the next Adjustment Date,
the applicable margin set forth below with respect to the Total
Liabilities-To-Tangible Net Worth Ratio, as determined for the most recent
fiscal quarter for which the Borrower has delivered its financial statements
pursuant to Section 7.1(a) or (b) and Compliance Certificate pursuant to Section
7.1(c):
TOTAL APPLICABLE MARGIN APPLICABLE MARGIN
LIABILITIES-TO-TANGIBLE FOR LIBOR LOANS FOR UNUSED
NET WORTH RATIO AND LETTER OF COMMITMENT FEE
CREDIT FEE
Greater than or equal to 2.00% 0.40%
0.50:1.00
Less than 0.50:1.00 but 1.50% 0.40%
greater than or equal to
0.25:1.00
Less than 0.25:1.00 1.25% 0.35%
If for any reason the Borrower shall fail to deliver the financial statements or
Compliance Certificate as required, the Applicable Margin shall in each case be
the highest percentage set forth above.
"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 11.1.
"Base Rate" shall mean the higher of (a) the annual rate of
interest announced from time to time by Fleet at Fleet'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 Fleet from three
funds brokers of recognized standing selected by Fleet.
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"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.
"Change in Control" shall be deemed to have occurred at such time
after the date hereof that any person (other than, in the case of clause (ii)
below, John R. Bertucci, together with its affiliates and associates (as defined
in Rule 12b-2 under the Securities Exchange Act of 1934 (the "Exchange Act") or
any successor rule thereto):
(i) shall file with the Securities and Exchange Commission and
deliver to the Borrower a report under or in response to Schedule 13D or 14D-1
(or any successor schedule, form or report) pursuant to the Exchange Act
disclosing that such person has become the beneficial owner (as defined in Rule
13D-3 under the Exchange Act, or any successor provisions) of more than 25% of
the total voting power of all classes of voting stock of the Borrower or
(ii) shall succeed in having a sufficient number of its nominees
elected to the board of directors of the Borrower such that such nominees so
elected (whether new or continuing as directors) shall constitute a majority of
the board of directors of the Borrower.
"Closing Date" shall mean the date of this Agreement.
"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 Commitment.
"Compliance Certificate" shall have the meaning set forth in Section
7.1(c).
"Consolidated Current Liabilities" shall mean, at any time, all
current liabilities of Borrower and its subsidiaries on a consolidated basis
that in accordance with GAAP are properly classified as current liabilities plus
all other indebtedness for borrowed money except such indebtedness that is
subordinated to the payment of the Obligations pursuant to an agreement in form
and substance acceptable to the Required Lenders ("Subordinated Debt").
"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
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Obligations, all taxes in respect of income and profits paid or payable and all
other proper deductions, all determined on a consolidated basis.
"Consolidated Quick Assets" shall mean, at any time, the sum of the
cash, Accounts, Short Term Investments and Long Term Fixed Income Investments of
the Borrower and its Subsidiaries, provided the sum of Long Term Fixed Income
Investments shall not exceed 25% of the amount of the Borrower's cash.
"Consolidated Tangible Net Worth" shall mean, at any time, the
stockholders' equity of the Borrower and its Subsidiaries determined in
accordance with GAAP excluding the book amount of all minority interests in
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:
(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.
"Consolidated Total Liabilities" shall mean, at any time, all
liabilities of the Borrower and its Subsidiaries on a consolidated basis that in
accordance with GAAP are properly classified as liabilities on the Borrowers'
consolidated balance sheet plus the sum of (i) the face amount of outstanding
Letters of Credit, (ii) sales of receivables described in clause (f) of the
definition of "Indebtedness" below and (iii) Synthetic Leases. In computing such
aggregate liabilities, the "amount" of the liability with respect to any such
sale of receivables shall be the amount of unrecovered capital or principal
investment of the purchaser (other than the Borrower or any of its wholly-owned
Subsidiaries) thereof, excluding amounts representative of yield or interest
earned on such investment, and the "amount" of any Synthetic Lease shall be the
stipulated loss value, termination value or other equivalent amount.
"Costs" shall have the meaning set forth in Section 11.4.
"Default" shall mean any event that, with the lapse of time, the
giving of notice, or both, would become an Event of Default hereunder.
"ERISA" shall have the meaning set forth in Section 5.12.
"Event of Default" shall have the meaning set forth in Section 9.1.
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"Existing Loan Agreement" shall mean the Loan Agreement between the
Borrower and Fleet dated October 31, 1995 as amended.
"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.
"GAAP" shall mean generally accepted accounting principles.
"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 9601(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.
"Indebtedness" shall mean, for any Person,
(a) 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,
(b) 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,
(c) Financing Lease Obligations of such Person,
(d) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person,
(e) every obligation of such Person under any Synthetic Lease,
(f) all sales by such Person of (i) accounts or general intangibles
for money due or to become due, (ii) chattel paper, instruments or documents
creating or evidencing a right to payment of money or (iii) other receivables
(collectively "receivables"), whether pursuant to a purchase facility or
otherwise, other than in connection with the disposition of the business
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operations of such Person relating thereto or a disposition of defaulted
receivables for collection and not as a financing arrangement, and together with
any obligation of such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
(g) every obligation of such Person (an "equity related purchase
obligation") to purchase, redeem, retire or otherwise acquire for value any
shares of capital stock of any class issued by such Person, any warrants,
options or other rights to acquire any such shares, or any rights measured by
the value of such shares, warrants, options or other rights, and
(h) every obligation of such Person under any forward contract,
futures contract, swap, option or other financing agreement or arrangement
(including, without limitation, caps, floors, collars and similar agreements),
the value of which is dependent upon interest rates, currency exchange rates,
commodities or other indices (a "derivative contract").
"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.
"International Standby Practices" shall mean International Standby
Practices (ISP98), International Chamber of Commerce Publication No. 590, or any
successor code of standby letter of credit practices among banks adopted by the
Issuing Bank in the ordinary course of its business as a standby letter of
credit issuer and in effect at the time of issuance of such Letter of Credit.
"Investments" shall have the meaning set forth in Section 8.6.
"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.
"Lenders" shall mean the Lenders as of the date hereof so long as
they maintain Commitments hereunder and any other institutions to which all or
part of the Total Commitment is assigned hereafter.
"Letter of Credit" shall have the meaning set forth in Section 3.1.
"Letter of Credit Application" shall have the meaning set forth in
Section 3.1.
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"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 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 5.8.
"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 or any of its
Affiliates in favor of the Lenders in connection with the transactions
contemplated hereby.
"Long Term Fixed Income Investments" shall mean investment grade
bonds with long-term debt ratings of A- or A3 or higher by at least one
nationally recognized rating agency and maturities of three years or less.
"Maximum Draw" shall mean the maximum aggregate amount from time to
time that beneficiaries may draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
"Material Subsidiary" shall mean each domestic Subsidiary of the
Borrower (other than Massachusetts securities corporations) with gross revenues
in excess of 5% of the total gross revenues of the Borrower and its
Subsidiaries, determined on a consolidated basis, or assets in excess of 5% of
the total assets of Borrower and its Subsidiaries, determined on a consolidated
basis, in each case as of the end of Borrower's last fiscal quarter.
"Note" shall mean a Revolving Credit Note.
"Notice of Borrowing" shall have the meaning set forth in Section
2.2.1.
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"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 8.2.
"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.
"Quick Ratio" shall have the meaning set forth in Section 8.11.
"Reimbursement Obligation" shall mean the Borrower's obligation to
reimburse the Lender on account of any drawing under any Letter of Credit as
provided in Section 3.2.
"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, provided that a
minimum of two Lenders shall be required at any time. 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 Commitment.
"Revolver Termination Date" shall mean July 30, 2002 or any
subsequent anniversary thereof if the Total Commitment shall have been renewed
by the Lenders.
"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.
"Short Term Investments" shall mean short term investments as
determined in accordance with GAAP.
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"Subordinated Debt" shall have the meaning set forth in the
definition of Consolidated Current Liabilities set forth above.
"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.
"Synthetic Lease" shall mean any lease that is treated as an
operating lease under GAAP and as a loan or financing for U.S. income tax
purposes.
"Total Commitment" shall mean, subject to Section 2.1.3, a principal
amount equal to $40,000,000.
"Total Liabilities-to-Tangible Net Worth Ratio" shall have the
meaning set forth in Section 8.10.
"Total Outstandings" shall mean at any time the sum of Revolving
Credit Outstandings, the Maximum Draw and Unpaid Reimbursement Obligations.
"Uniform Customs" shall mean the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 or any successor version thereto adopted by the Issuing Bank
in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
"Unpaid Reimbursement Obligation" shall mean any Reimbursement
Obligation for which the Borrower does not reimburse the Lenders on the date
specified in, and in accordance with, Section 3.2.
1.2 Accounting Terms. Accounting terms not specifically defined in
this Agreement shall have the meanings given to them under GAAP.
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.
2.1.1 Except as provided in Section 2.1.2 hereof and 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 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
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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 Total Outstandings shall not exceed the Total 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 one month shall be made at any time in a principal amount of less than
$1,000,000.
2.1.2 Until such time as the Borrower and its Material Subsidiaries
shall grant to the Lenders a first priority security interest in their domestic
accounts receivable and domestic inventory and all documentation necessary to
grant and perfect such security interest shall have been completed to the
Agent's reasonable satisfaction, the principal amount of Total Outstandings
shall not exceed $5,000,000.
2.1.3 At any time on or prior to the date 90 days after the Closing,
the Borrower may (so long as no Event of Default has occurred and is continuing)
request that either Lender increase its Commitment up to an amount that would
increase the Total Commitment to no more than $50,000,000. If neither Lender is
willing to increase its Commitment, the Borrower may during such period (so long
as no Event of Default has occurred and is continuing) by irrevocable written
notice to the Agent, request on one occasion that the Total Commitment be
increased to an amount not greater than $50,000,000 by engaging Fleet
Securities, Inc. (the "Arranger") to locate one or more additional Lenders to
hold Commitments for the requested increase (the "Syndication"). Fleet shall
cause the Arranger to use commercially reasonable efforts to locate such
additional Lenders including any potential lenders proposed by the Borrower. The
Borrower shall provide all information requested by the Arranger and reasonably
necessary for the successful completion of the Syndication, which information
will be distributed on a confidential basis to selected financial institutions.
In addition, the management of the Borrower, will, at the request of the Agent
or the Arranger, make themselves and their advisors available at reasonable
times to meet with and answer questions of potential lenders. In the event that
the Borrower engages the Arranger, the Borrower shall not offer, or permit any
of its Subsidiaries to offer, any debt or equity securities (other than Common
Stock of the Borrower) prior to the completion of the Syndication except with
the prior written consent of the Agent and the Arranger. The Borrower shall pay
the Arranger an engagement fee as provided in a separate writing between the
Borrower and the Arranger, of which one-half shall be payable on the date the
Arranger is engaged and the balance shall be payable on the date on which a
closing on the Syndication shall occur.
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
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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.
2.2.4 Notwithstanding the notice requirement set forth above in this
Section 2.2, the Lenders agree to make Advances to the Borrower sufficient to
pay to the Issuing Bank any Unpaid Reimbursement Obligations on the date on
which such Reimbursement Obligations become Unpaid Reimbursement Obligations.
The Borrower hereby requests and authorizes the Lenders to make from time to
time such Advances, which shall be Base Rate Loans, by means of paying Unpaid
Reimbursement Obligations. The Borrower acknowledges and agrees that the making
of such Advances shall, in each case, be subject in all respects to the
provisions of this Agreement, including, without limitation, the limitations set
forth in Section 2.1 and the requirements of the applicable conditions in
Article VI. All actions taken by the Lenders pursuant to the provisions of this
Section 2.2.4 shall be conclusive and binding on the Borrower.
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
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of Exhibit C hereto (each, a "Revolving Credit Note") in the amount of such
Lender's 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 LIBOR Rate plus the Applicable Margin;
provided, however, that the Applicable Margin shall not be less than 1.50% prior
to the first day of the month following the month in which the Borrower shall
deliver to the Lenders the financial statements required by Section 7.1(b) for
the year ended December 31, 2001 and related Compliance Certificate.
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 2% 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
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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 the Applicable Margin
multiplied by the average daily amount by which (a) the Total Commitment exceeds
(b) the Total 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 September 30, 2001 to and on the Revolver Termination Date.
Notwithstanding the foregoing, so long as any Lender fails to make available any
portion of its Commitment when 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 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.
ARTICLE III.
LETTER OF CREDIT FACILITY
3.1 Letter of Credit Commitment.
3.1.1 Subject to the terms and conditions hereof, Fleet (the
"Issuing Bank") at the risk of the Lenders to the extent of their Applicable
Commitment Percentages, in reliance upon the representations and warranties of
the Borrower contained herein, shall issue, extend and
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renew from time to time from the date hereof until but not including the date
which is fourteen (14) days prior to the then scheduled Revolver Termination
Date, for the account of the Borrower, standby and documentary letters of credit
(each a "Letter of Credit"), in such form as may be requested by the Borrower
and agreed to by the Issuing Bank so long as (i) the Borrower shall have
executed and delivered a letter of credit application on the Issuing Bank's
customary form (a "Letter of Credit Application"), (ii) after giving effect to
such request, the sum of the aggregate Maximum Draw and all Unpaid Reimbursement
Obligations shall not exceed $10,000,000 at any one time, (iii) the sum of the
principal amount of Total Outstandings shall not exceed the Total Commitment and
(iv) until the condition set forth in Section 2.1.2 is met, the principal amount
of Total Outstandings shall not exceed $5,000,000.
3.1.2 Each Letter of Credit Application shall be completed to the
satisfaction of the Issuing Bank at least two Business Days prior to the desired
date of issuance. In the event that any provision of any Letter of Credit
Application shall be inconsistent with any provision of this Agreement, then the
provisions of this Agreement shall, to the extent of any such inconsistency,
govern.
3.1.3 Each Letter of Credit issued, extended or renewed hereunder
shall, among other things, (a) provide for the payment of sight drafts for honor
thereunder when presented in accordance with the terms thereof and when
accompanied by the documents described therein, and (b) have an expiry date no
later than the date which is fourteen (14) days (or, if the Letter of Credit is
confirmed by a confirmer or otherwise provides for one or more nominated
persons, forty-five (45) days) prior to the Revolver Termination Date. Each
Letter of Credit so issued, extended or renewed shall be subject to the Uniform
Customs or, in the case of a standby Letter of Credit, either the Uniform
Customs or the International Standby Practices. The Issuing Bank shall give the
other Lenders reasonably prompt notice of the issuance and amount of each Letter
of Credit and the expiration of each Letter of Credit.
3.2 Reimbursement Obligation of the Borrower. In order to induce the
Lenders to issue, extend and renew each Letter of Credit, the Borrower hereby
agrees to reimburse the Lenders for or to pay to the Lenders with respect to
each Letter of Credit issued, extended or renewed by the Lenders hereunder,
3.2.1 except as otherwise expressly provided in Section 3.2.2, on
each date that any draft presented under such Letter of Credit is honored by the
Issuing Bank, or the Issuing Bank otherwise makes a payment with respect
thereto, (i) the amount paid by the Issuing Bank under or with respect to such
Letter of Credit, and (ii) the amount of any taxes, fees, charges or other costs
and expenses whatsoever incurred by the Issuing Bank in connection with any
payment made by the Issuing Bank under, or with respect to, such Letter of
Credit;
3.2.2 upon the termination of the Commitment, or the acceleration of
the Reimbursement Obligations with respect to all Letters of Credit in
accordance with Article IX an amount equal to the Maximum Draw, which amount
shall be held by the Issuing Bank as cash collateral for all Reimbursement
Obligations.
Unless funded by an Advance, each such payment shall be made to the
Issuing Bank at its office at 100 Federal Street, Boston, Massachusetts 02110 in
immediately available funds.
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Interest on any and all amounts remaining unpaid by the Borrower under this
Section 3.2 and not required to be funded by an Advance pursuant to Section
2.2.4 at any time from the date such amounts become due and payable (whether as
stated in this Section 3.2, by acceleration or otherwise) until payment in full
(whether before or after judgment) shall be payable to the Issuing Bank on
demand at the rate specified in Section 2.4.2 following an Event of Default.
3.3 Letter of Credit Payments. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Issuing Bank
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. The responsibility of the Issuing Bank to the
Borrower shall be only to determine that the documents (including each draft)
delivered under each Letter of Credit in connection with such presentment shall
be in conformity in all material respects with such Letter of Credit.
3.4 Obligations Absolute. The Borrower's obligations under this Article
III shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Lenders or any beneficiary
of a Letter of Credit. The Borrower further agrees with the Lenders that the
Lenders shall not be responsible for, and the Reimbursement Obligations shall
not be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even if such documents should in fact prove to
be in any or all respects invalid, fraudulent or forged, or any dispute between
or among the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Lenders shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit. The Borrower agrees that any action taken or omitted by the Lenders
under or in connection with each Letter of Credit and the related drafts and
documents, if done in good faith, shall be binding upon the Borrower and shall
not result in any liability on the part of the Lenders to the Borrower.
3.5 Reliance by Issuer. To the extent not inconsistent with Section 3.4,
the Lenders shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by them to be genuine and
correct and to have been signed, sent or made by the proper person or entity and
upon advice and statements of legal counsel, independent accountants and other
experts selected by the Lenders.
3.6 Letter of Credit Fees. The Borrower shall pay a fee to the Lenders in
respect of each Letter of Credit equal to the Applicable Margin per annum
multiplied by the face amount of such Letter of Credit. In addition, the
Borrower shall pay to the Issuing Bank for its own account a fee of 1/8% per
annum of the face amount of each Letter of Credit. Both fees shall be payable 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.
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ARTICLE IV.
ADDITIONAL TERMS
4.1 Payments.
4.1.1 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 4.3, 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 4.3,
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 Total Outstandings exceed $40,000,000, the
Borrower will immediately pay the amount of such excess to the Agent.
4.1.2 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.
4.1.3 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.
4.1.4 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) 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 Sections 2.6 and 3.6 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
17
promptly distribute to the Lenders in immediately available funds payments
received in fully collected, immediately available funds from the Borrower.
4.1.5 The Borrower may elect to reduce or terminate the Commitment
by a minimum principal amount of $5,000,000 and integral multiples of $1,000,000
but not by an amount greater than the Maximum Draw at such time, upon written
notice to the Agent given by 10:00 a.m. Boston time at least five days prior to
the date of such reduction or termination. The Borrower shall not be entitled to
reinstate the Commitment following such reduction or termination.
4.1.6 If the Borrower sells any of its capital stock or other equity
interests or any warrants, rights or options to acquire its capital stock or
other equity interests other than sales of common stock upon the exercise of
stock options held by employees, the Borrower shall prepay Advances by the
amount of the excess of the gross cash proceeds received from such sale after
deduction of reasonable and customary transaction expenses (including without
limitation, underwriting discounts and commissions) incurred in connection with
such sale.
4.2 Capital Adequacy.
4.2.1 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 4.2.2, 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).
4.2.2 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 4.2 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 4.2 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 4.2. 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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4.3 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:
4.3.1 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 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
19
the actions specified in Section 4.3.1(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 4.3.1(a)(ii) or (iii), the Borrower may (and
in the case of a LIBOR Loan affected pursuant to Section 4.3.1(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 4.3.1(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.
4.3.2 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 4.3.1(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 4.3.1(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 4.1 or (iv) as a consequence
of an election made by the Borrower pursuant to Section 4.3.1(b)(y).
4.4 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, 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
20
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 V.
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.
5.1 Organization, Existence and Power. Each of the Borrower and each
Material Subsidiary is duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. Each of the Borrower
and each Material Subsidiary 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. Each of the
Borrower and each Material Subsidiary 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.
5.2 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 and each Material Subsidiary.
Each of the Loan Documents constitutes the legal, valid and binding obligation
of the Borrower, enforceable against the Borrower in accordance with its terms.
Each Guaranty constitutes the legal, valid and binding obligation of the
Material Subsidiary executing it, enforceable against such Material Subsidiary
in accordance with its terms.
5.3 Authority. The Borrower has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Loan
Documents. Each Material Subsidiary has all requisite corporate power and
authority to execute, deliver and perform its obligations under its Guaranty.
Neither the authorization, execution, delivery, or performance by the Borrower
of this Agreement or of any other Loan Document nor the authorization,
execution, delivery, or performance by each Material Subsidiary of its Guaranty
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 any Material Subsidiary, 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 or any Material
Subsidiary pursuant to, any material instrument, agreement or other document to
which the Borrower or any Material Subsidiary is a
21
party or by which the Borrower, any Material Subsidiary or any of their
properties may be bound or affected.
5.4 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 on 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. The Disclosure Schedule
sets forth the name of each Material Subsidiary.
5.5 Financial Condition. The audited consolidated balance sheet of the
Borrower and its Subsidiaries dated as of December 31, 2000 and the unaudited
consolidated balance sheet of the Borrower and its Subsidiaries dated as of June
30, 2001 (the "Balance Sheet Date") and the related audited and unaudited,
respectively, statements of operations, cash flows and stockholders' equity of
the Borrower and its Subsidiaries for the periods ending on such dates,
including any related notes (the "Financial Statements"), all of which were
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
except, in the case of unaudited statements, for the absence of footnotes and
subject to normal year-end adjustments that shall not be materially adverse in
the aggregate. 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 and its Material Subsidiaries have 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.
5.6 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 or any Material Subsidiary 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.
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5.7 Certain Agreements; Material Contracts. Neither the Borrower nor any
Material Subsidiary is 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.
5.8 Authorization, Etc. All authorizations, consents, approvals,
accreditations, certifications and licenses required under the corporate
charters or by- laws of the Borrower and its Material Subsidiaries or under
applicable law or regulation for the ownership or operation of the property
owned or operated by the Borrower or any Material Subsidiary or the conduct of
any business or activity conducted by the Borrower or any Material Subsidiary,
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 and its Material Subsidiaries have fulfilled and performed
all of their 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 or any Material
Subsidiary have been made, other than any such filings or registrations as to
which the failure to make same 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. 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.
5.9 No Violation. The execution, delivery and performance by the Borrower
of the Loan Documents and by each Material Subsidiary of its Guaranty do not and
will not violate any provision of law or regulation applicable to the Borrower
or any Material Subsidiary, or any writ, order or decree of any court or
governmental or regulatory authority or agency applicable to the Borrower or any
Material Subsidiary. Neither the Borrower nor any Material Subsidiary is 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 or any
Material Subsidiary 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. Neither the Borrower nor
any Material Subsidiary is 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," neither the Borrower nor any Material Subsidiary has
received notice of any violation of any federal, state or local environmental
law, rule or regulation or assertion that the Borrower or any
23
Material Subsidiary has any obligation to clean up or contribute to the cost of
cleaning up any waste or pollutants.
5.10 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.
5.11 Transactions With Affiliates, Officers, Directors and 1%
Shareholders. Except as set forth on the Disclosure Schedule, neither the
Borrower nor any Material Subsidiary has any Indebtedness to or material
contractual arrangement or understanding with any Affiliate, officer or director
of the Borrower or any Material Subsidiary, nor any shareholder holding of
record at least 1% of the equity of the Borrower or any Material Subsidiary nor,
to the best of the Borrower's knowledge (without independent inquiry), any of
their respective relatives.
5.12 ERISA. Neither the Borrower nor any Material Subsidiary has ever
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 or any Material Subsidiary 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 or any Material Subsidiary any prohibited
transaction within the meaning of ERISA or Section 4975 of the Internal Revenue
Code. Neither the Borrower nor any Material Subsidiary has ever maintained,
contributed to or been obligated to contribute to any "multiemployer plan," as
defined in Section 3(37) of ERISA. Neither the Borrower nor any Material
Subsidiary has ever incurred any "withdrawal liability" calculated under Section
4211 of ERISA, and there has been no event or circumstance that would cause the
Borrower or any Material Subsidiary to incur any such liability.
5.13 Ownership of Properties; Liens. The Borrower and its Subsidiaries
have good and marketable title to all their material properties and assets, real
and personal, that are now carried on their books, including, without
limitation, those reflected in the Financial Statements (except those disposed
of in the ordinary course since the date thereof), and have valid leasehold
interests in their properties and assets, real and personal, which they purport
to lease, subject in
24
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 material leasehold interests and material obligations with
respect to real property of the Borrower and its Subsidiaries are described on
the Disclosure Schedule.
5.14 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 or
any Material Subsidiary and its employees, nor is any strike, work stoppage or
slowdown pending or threatened against the Borrower or any Material Subsidiary.
5.15 Insurance. Each of The Borrower and each Material Subsidiary
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.
5.16 Indebtedness. Except as reflected in the Financial Statements or set
forth in the Disclosure Schedule, and other than Indebtedness incurred in the
ordinary course of business since the Balance Sheet Date, the Borrower and its
Material Subsidiaries have no outstanding Indebtedness.
5.17 Securities Law Compliance. Neither the Borrower nor any Material
Subsidiary is an "investment company" as defined in the Investment Company Act
of 1940, as amended. All of the Borrower's and each Material Subsidiary's
outstanding stock was offered, issued and sold in compliance with all applicable
state and federal securities laws.
5.18 Accuracy of Information. None of the information furnished to the
Lenders by or on behalf of the Borrower or any Material Subsidiary 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 VI.
CONDITIONS TO ADVANCES
The Lenders shall not be obligated to make any Advances unless the
following conditions have been satisfied:
6.1 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
25
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 V 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 5.5 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 7.1(a) and (b) of this Agreement and the date of
such financial statements, respectively.
(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.
6.2 First Advance. The obligations of the Lenders to make the first
Advance after the Closing Date 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 all states in which it is qualified to do
business, each dated as of a recent date;
(iii) a certificate of the Borrower's Clerk or Assistant
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;
26
(v) a certificate duly executed by the Borrower's chief
financial officer or treasurer dated the Advance Date or Closing
Date, as the case may be, to the effect that each of the conditions
set forth in the foregoing Section 6.1 has been met as of such date;
and
(vi) an executed guaranty of the Obligations in form and
substance acceptable to the Lenders (a "Guaranty") from each
Material Subsidiary.
(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 VII.
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:
7.1 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) an unaudited consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries as of the end of such quarter
and (ii) unaudited 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 or treasurer 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 or treasurer 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 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
27
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) Concurrent with, and no later than the required date for
delivery of the financial information outlined in Sections 7.1(a) and (b), a
certificate signed by the chief financial officer or treasurer of the Borrower
substantially in the form of Exhibit D hereto (the "Compliance Certificate");
(d) Not later than forty-five 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 Material 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 or treasurer 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;
(i) Promptly after Borrower becomes aware thereof, written notice
of any noncompliance with ERISA that with the passage of time, the giving of
notice or otherwise, is reasonably likely to result in a liability to the
Borrower in excess of $1,000,000; and
(j) 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.
7.2 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; provided, however, that the Borrower may use
proceeds of the Advances to repurchase its
28
outstanding capital stock so long as it does not make aggregate purchases with
such proceeds exceeding $6,000,000.
7.3 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;
provided that nothing in this Section 7.3 shall prevent the Borrower from
discontinuing the operation and maintenance of any of its properties or any of
those of its Subsidiaries (including the voluntary liquidation and dissolution
of a Subsidiary other than a Material Subsidiary) if such discontinuance is, in
the judgment of the Borrower, desirable in the conduct of its or their business
and does not materially adversely affect the business of the Borrower and its
Subsidiaries on a combined basis.
(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.
7.4 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 similar proceedings shall have
been commenced, or, if commenced, have been effectively stayed.
7.5 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
29
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.
7.6 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.
7.7 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.
7.8 Bank Accounts. The Borrower shall maintain its principal operating
accounts with the Agent.
7.9 Guaranties. The Borrower shall cause any Subsidiary that becomes a
Material Subsidiary promptly thereafter to execute and deliver a Guaranty to the
Agent.
ARTICLE VIII.
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, the Borrower will not, and
will not cause or permit any of its Subsidiaries to:
8.1 Sale of Assets; Mergers, Etc.
(a) Sale of Assets. Except for sales in the ordinary course of
business, sell, transfer, or otherwise dispose of, to any Person any assets
(including the securities of any Subsidiary) other than assets having an
aggregate fair market value less than five percent (5%) of Borrower's
Consolidated Tangible Net Worth.
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(b) Mergers, Etc. 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 capital stock or 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, or sell,
assign, lease or otherwise dispose of any or all of its assets to,
the Borrower or another Subsidiary; and
(2) the Borrower or any of its Subsidiaries may acquire all or
substantially all of the capital stock or assets of any Person or
consolidate or merge with 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 between the date hereof and the
Revolver Termination Date, including all contingent liabilities,
when aggregated with all such acquisitions and any Investments
permitted under Section 8.6(3) during such period shall not exceed
$20,000,000, and if 80% or more of the purchase price is paid in
capital stock of the Borrower, 20% of Consolidated Tangible Net
Worth as of the end of the most recent fiscal quarter, (iii) based
on a pro forma calculation of the ratios set forth in Sections 8.9 -
8.11 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
Sections 8.9 - 8.11, and (iv) all contingent liability and
contingent payment obligations incurred by Borrower or any of its
Subsidiaries in connection with such transaction shall be reasonably
acceptable to the Agent.
8.2 Liens and Encumbrances.
(a) Create incur, assume or permit to exist 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
31
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 8.2(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) 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;
(6) Liens existing as of the Closing Date and disclosed on the
Disclosure Schedule hereto;
(7) 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;
(8) 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;
(9) Any Lien on any asset of any corporation existing at the
time such corporation is merged into or consolidated with (or
acquired in accordance with Section 8.1(b) by) the Borrower or a
Subsidiary of the Borrower and not created in contemplation of such
event;
(10) 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;
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(11) 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;
(12) 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;
(13) 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 such Lien shall extend to property and assets of the Borrower
or any Subsidiary not encumbered prior to any such refinancing; and
(14) Cash collateral not to exceed 497,463 Pounds Sterling
delivered to Chase with respect to Borrower's Letters of Credit
issued by Chase for account party MKS Instruments UK Limited in an
aggregate amount not exceeding 497,463 Pounds Sterling, provided the
outstanding debt under the Existing Loan Agreement is paid in full
prior to the provision of such collateral.
(b) In case any property is subjected to a Lien in violation of
Section 8.2(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
8.2(a) shall constitute an Event of Default hereunder, whether or not any such
provision is made pursuant to this Section 8.2(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).
(d) (i) Cause or permit or (ii) agree or consent to cause or
permit in the future (upon the happening of a contingency or otherwise), any of
its equity interests in any Subsidiary to be subject to any Lien (including any
Permitted Lien).
8.3 Sales and Leasebacks. 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).
8.4 Indebtedness. Create, incur or assume any Indebtedness other than:
(1) Indebtedness to the Lenders pursuant to this Agreement
and the Existing Loan Agreement;
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(2) Financing Lease Obligations, not to exceed $10,000,000 in
the aggregate at any one time outstanding;
(3) Endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(4) Subordinated Debt;
(5) Indebtedness of the Borrower owing to Subsidiaries not
otherwise permitted by this Section 8.4 in an aggregate principal
amount at any time outstanding not to exceed $5,000,000;
(6) Indebtedness of Subsidiaries owing to the Borrower not
otherwise permitted by this Section 8.4 in an aggregate principal
amount at any time outstanding not to exceed $5,000,000;
(7) Indebtedness of any wholly-owned Subsidiary owing to any
other wholly-owned Subsidiary;
(8) Guarantees by Material Subsidiaries of the Obligations;
(9) Indebtedness with respect to Investments permitted by
Section 8.6(3) so long as such entities remain Subsidiaries or
Affiliates of the Borrower; and
(10) Indebtedness not included above and listed on the
Disclosure Schedule.
8.5 Dividends and Distributions. Declare or pay, directly or indirectly,
any dividend (other than a dividend payable solely in the Common Stock of the
Borrower) or make any other distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, with respect to
any shares of its capital stock or, directly or indirectly, except to the extent
permitted by Section 7.2 hereof, redeem, purchase, retire or otherwise acquire
for value any shares of any class of its capital stock or set aside any amount
for any such purpose; provided, however, that any Subsidiary of the Borrower may
declare and pay dividends or make other distributions to the Borrower.
8.6 Investments. Except as permitted by Section 8.1, 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 (but only with funds other than
proceeds of Advances):
(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
34
exceed (or an unconditional right to compel purchase within) three
years from the date of acquisition;
(2) Repurchase agreements collateralized by securities of the
U.S. Government and U.S. Government-sponsored securities;
(3) Investments in or to any Subsidiary or other Affiliate,
provided Borrower remains in compliance with Section 8.1(b);
(4) Investments and obligations issued by the United States
government, any agency thereof, 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) three years from the
date of acquisition that are rated AA- or higher by at least one
nationally recognized rating agency;
(5) Investments and obligations issued by any company (other
than a bank) with maturities not to exceed three years from the date
of acquisition with a long-term debt rating of A or higher or a
short-term debt rating of A1 or P1 by at least one nationally
recognized rating agency;
(6) 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);
(7) Shares of money market mutual funds registered under the
Investment Company Act of 1940, as amended;
(8) 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;
(9) Investments in mutual funds (other than money market
mutual funds and short term bond funds with individual maturities
under three years and aggregate ratings of A- or A3 or higher by at
least one nationally recognized rating agency) that in the aggregate
shall not exceed $5,000,000;
(10) Investments in the form of advances to employees in the
ordinary course of business for moving, entertainment, travel and
other similar expenses, but not more than $1,000,000 in the
aggregate outstanding at any time; and
35
(11) Other Investments existing on the Closing Date and
listed on the Disclosure Schedule.
8.7 Transactions with Affiliates. 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.
8.8 ERISA Compliance. 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;
(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.
8.9 Tangible Net Worth Test. Permit the Consolidated Tangible Net Worth as
of the end of each fiscal quarter of the Borrower to be less than the sum of (i)
$292,000,000, plus (ii) 80% of Consolidated Net Income (excluding losses), plus
(iii) the net proceeds of any equity securities sold by the Borrower after June
30, 2001, for each consecutive fiscal quarter of the Borrower beginning with the
quarter ending September 30, 2001, on a cumulative basis.
8.10 Total Liabilities-to-Tangible Net Worth Ratio. Permit the ratio
("Total Liabilities-to-Tangible Net Worth Ratio") of the Consolidated Total
Liabilities as of the end of each fiscal quarter of the Borrower beginning with
the fiscal quarter ending September 30, 2001 to its Consolidated Tangible Net
Worth as of the end of each fiscal quarter of the Borrower beginning with the
fiscal quarter ending September 30, 2001 to exceed 1 to 1.
8.11 Quick Ratio. Permit the ratio (the "Quick Ratio") of (i)
Consolidated Quick Assets to (ii) Consolidated Current Liabilities to be less
than 2.25 to 1.00.
8.12 Capital Expenditures. Make capital expenditures that in the aggregate
and on a consolidated basis exceed during each fiscal quarter of the Borrower
the sum of $7,000,000 plus the amount by which such expenditures during the
immediately preceding quarter, beginning with the quarter ended September 30,
2001, were less than $7,000,000.
8.13 Contracts Prohibiting Compliance with Agreement. 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.
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ARTICLE IX.
EVENTS OF DEFAULT
9.1 Default. If any one of the following events ("Events of Default")
shall occur:
(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 $3,000,000
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 $3,000,000, 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 (except to the extent
explicitly permitted by this Agreement), 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 domestic 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 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;
37
(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
$500,000 against the Borrower or any Subsidiary;
(g) Default shall be made in the due observance or performance of
any covenant or agreement under Article VIII;
(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 IX) 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) There shall occur a Change in Control;
(k) There shall occur any material adverse change in the
financial condition of the Borrower;
(l) There shall occur any Event of Default under the Existing
Loan Agreement;
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 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.
9.2 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,
38
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.
9.3 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.
9.4 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.
9.5 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 IX, 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 11.4;
(b) amounts due to the Agent pursuant to Section 10.10 and to the
Arranger pursuant to Section 2.1.3;
(c) payments of interest on the Notes to be applied for the
ratable benefit of the Lenders;
(d) payments of principal of the 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 X.
THE AGENT
10.1 Appointment. Each Lender hereby irrevocably designates and appoints
Fleet as the Agent for the Lenders under this Agreement, and each of the Lenders
hereby irrevocably authorizes Fleet 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
39
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.
10.2 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
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.
10.3 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.
10.4 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
40
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.
10.5 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 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.
10.6 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.
10.7 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
41
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 the Existing Loan Agreement and shall have the right to determine
the order in which amounts are applied to such obligations.
10.8 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 10.8 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 X shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
10.9 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 VI) 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 4.2 or 4.3), 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 10.9, the term "pro rata"
shall be determined with respect to the 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 10.9 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.
10.10 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.
42
ARTICLE XI.
MISCELLANEOUS
11.1 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 Commitment
that shall be assigned is $1,000,000, (iv) such assignee shall have an office
located in the United States, (v) the assigning Lender shall pay the Agent a
transaction fee of $2500, and (vi) 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 Section 5.5 or Section 7.1, 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.
43
(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.
11.2 Survival of Representations, Etc. All representations, warranties and
covenants made herein or in any Loan Document shall survive the making of any
Advance hereunder and the delivery of the Notes and the consummation of all
other transactions contemplated hereby or thereby.
11.3 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.
11.4 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
44
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, LLP, 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 costs, including
personnel costs of the Lenders incurred in connection with such administration
and enforcement or protection.
11.5 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:
Fleet National Bank
100 Federal Street
Boston, Massachusetts 02110
Attn: Mr. Daniel G. Head, Jr., Director
Telecopier No. (617) 434-0819
with a copy to:
Arlene L. Bender, Esq.
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, Massachusetts 02109
Telecopier No. (617) 832-7000
45
(b) If to the Borrower:
MKS Instruments, Inc.
Six Shattuck Road
Andover, Massachusetts 01810
Attn: Mr. Ronald C. Weigner, CFO
Telecopier No. (978) 975-7663
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.
11.6 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).
11.7 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.
11.8 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
46
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 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.
11.9 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 11.9 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 11.9.
11.10 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 4.1.4,
Section 10.9 or this Section 11.10, the amount of or the due date of any
scheduled principal installment of or the rate of interest payable on or
fees payable with respect to any Obligation, that changes the definition
of Required Lenders, that permits an assignment by the Borrower
47
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 Commitment of any Lender or the
Total 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.
11.11 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.
11.12 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 HEREUNDER UNTIL ALL
OBLIGATIONS OF THE BORROWER HEREUNDER ARE SATISFIED IN FULL.
11.13 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.
48
11.14 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.
11.15 Compliance with Covenants. All computations determining compliance
with Article VIII shall utilize accounting principles in conformity with those
used in the preparation of the financial statements referred to in Section 5.5.
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 5.5, 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.
11.16 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.
11.17 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.
49
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/ JM Tocci By: /s/ William P Donlan
- ---------------------- -------------------------------
Title: Treasurer
FLEET NATIONAL BANK
By: /s/ Daniel G. Head Jr.
-------------------------------
Title: Director
Address: 100 Federal Street
Boston, MA 02110
THE CHASE MANHATTAN BANK
By: /s/ Neil Sweeny
--------------------------------
Title: Vice President
Address: 999 Broad Street
Bridgeport, CT 06604
50
EXHIBIT A
APPLICABLE COMMITMENT
LENDER COMMITMENT PERCENTAGE
Fleet National Bank $24,000,000 60%
The Chase Manhattan Bank $16,000,000 40%
----------- ---
$40,000,000 100%
51
REVOLVING CREDIT NOTE
$24,000,000 Boston, Massachusetts
July 31, 2001
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 FLEET
NATIONAL BANK (the "Lender"), in its individual capacity, at the office of FLEET
NATIONAL BANK, 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 Credit Agreement dated as of
July 31, 2001, as it may be amended, 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
TWENTY-FOUR MILLION DOLLARS ($24,000,000) 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
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.
[Remainder of page intentionally left blank.]
-2-
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:
/s/ JM Tocci By: /s/ William P Donlan
- -------------------- ------------------------------
Name: William P Donlan
Title: Treasurer
-3-
REVOLVING CREDIT NOTE
$16,000,000 Boston, Massachusetts
July 31, 2001
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 CHASE
MANHATTAN BANK (the "Lender"), in its individual capacity, at the office of
FLEET NATIONAL BANK, 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 Credit Agreement
dated as of July 31, 2001, as it may be amended, 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 SIXTEEN MILLION DOLLARS ($16,000,000) 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
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.
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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:
/s/ JM Tocci By: /s/ William P Donlan
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Name: William P Donlan
Title: Treasurer
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SUBSIDIARY GUARANTY
This Subsidiary Guaranty (the "Guaranty") is made as of the 31st day
of July, 2001, by Applied Science and Technology, Inc., a Delaware corporation
(the "Guarantor"), to Fleet National Bank ("Fleet") and The Chase Manhattan Bank
(each, a "Lender" and collectively, the "Lenders") with respect to obligations
of MKS Instruments, Inc., a Massachusetts corporation and the parent of the
Guarantor (the "Borrower").
Whereas, the Lenders have extended credit to the Borrower under the
terms of the Credit Agreement dated as of the date hereof between the Borrower,
the Lenders and Fleet as agent (as amended, the "Credit Agreement");
Whereas, the Borrower and the Guarantor are members of a group of
related corporations, the success of any one of which is dependent in part on
the success of the other members of such group;
Whereas, the Guarantor expects to receive substantial direct
benefits from the extensions of credit to the Borrower by the Lenders pursuant
to the Credit Agreement;
Whereas, it is a condition precedent to the Lenders' execution and
delivery of the Credit Agreement that the Guarantor execute and deliver to the
Lenders a guaranty substantially in the form hereof; and
Whereas, the Guarantor wishes to guaranty the Borrower's obligations
to the Lenders under the Credit Agreement as provided herein;
Now therefore, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor covenants and agrees
as follows:
1. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor hereby
guarantees to the Lenders the full and punctual payment when due (whether at
maturity, by acceleration or otherwise), as well as the performance, of all of
the Obligations (as defined in the Credit Agreement), including all such that
would become due but for the operation of the automatic stay pursuant to Section
362(a) of the Federal Bankruptcy Code and the operation of Sections 502(b) and
506(b) of the Federal Bankruptcy Code, together with all costs of collection,
compromise or enforcement, including without limitation reasonable attorneys'
fees, incurred with respect to the Obligations or this Guaranty, or with respect
to a proceeding under the federal bankruptcy laws or any insolvency,
receivership, arrangement or reorganization law or an assignment for the benefit
of creditors concerning Borrower or Guarantor, together with interest on all
such costs of collection, compromise or enforcement from the date arising at the
rate of interest for overdue principal set forth in the Credit Agreement (all
the foregoing, collectively, the "Guaranty Obligations"). This Guaranty is an
absolute, unconditional and continuing guaranty of the full and punctual payment
and performance of the Guaranty Obligations and not of their collectibility only
and is in no way conditioned upon any requirement that the Lenders first attempt
to collect any of the Guaranty Obligations from the Borrower or resort to any
security or other means of obtaining their payment. Should the Borrower default
in the payment or performance of any of the Obligations, the obligations of the
Guarantor hereunder shall become immediately due and
payable to the Lenders, without demand or notice of any nature, all of which are
expressly waived by the Guarantor. Payments by the Guarantor hereunder may be
required by the Lenders on any number of occasions. All payments by the
Guarantor hereunder shall be made to Fleet as agent for the Lenders, in the
manner and at the place of payment specified therefor in the Credit Agreement.
2. GUARANTOR'S AGREEMENT TO PAY ENFORCEMENT COSTS. The Guarantor
further agrees, as the principal obligor and not as a guarantor only, to pay to
the Lenders, on demand, all reasonable costs and expenses (including court costs
and legal expenses) incurred or expended by the Lenders in connection with the
Guaranty Obligations, this Guaranty and the enforcement thereof, together with
interest on amounts recoverable under this Section 2 from the time when such
amounts become due until payment, whether before or after judgment, at the rate
of interest for overdue principal set forth in the Credit Agreement.
3. WAIVERS BY GUARANTOR; LENDERS' FREEDOM TO ACT. The Guarantor
agrees that the Guaranty Obligations will be paid and performed strictly in
accordance with their respective terms regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Lenders with respect thereto. Except as specifically
provided herein, the Guarantor waives promptness, diligence, presentment,
demand, protest, notice of acceptance, notice of any Guaranty Obligations
incurred and all other notices of any kind, all defenses that may be available
by virtue of any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshalling of assets of the
Borrower or any other entity or other person primarily or secondarily liable
with respect to any of the Guaranty Obligations, and all suretyship defenses
generally. Without limiting the generality of the foregoing, the Guarantor
agrees to the provisions of any instrument evidencing, securing or otherwise
executed in connection with any Guaranty Obligation and agrees that the
obligations of the Guarantor hereunder shall not be released or discharged, in
whole or in part, or otherwise affected by (i) the failure of the Lenders to
assert any claim or demand or to enforce any right or remedy against the
Borrower or any other entity or other person primarily or secondarily liable
with respect to any of the Guaranty Obligations; (ii) any extensions,
compromises, refinancings, consolidations or renewals of, or alteration of the
terms of, any Guaranty Obligation; (iii) any change in the time, place or manner
of payment of any of the Guaranty Obligations or any rescissions, waivers,
compromises, refinancings, consolidations or other amendments or modifications
of any of the terms or provisions of the Credit Agreement or the other Loan
Documents (as defined in the Credit Agreement) or any other agreement
evidencing, securing or otherwise executed in connection with any of the
Guaranty Obligations; (iv) the addition, substitution or release of any entity
primarily or secondarily liable for any Guaranty Obligation; (v) the adequacy of
any rights the Lenders may have against any collateral or other means of
obtaining repayment of the Guaranty Obligations; (vi) the impairment of any
collateral securing the Guaranty Obligations, including without limitation the
failure to perfect or preserve any rights the Lenders might have in such
collateral or the substitution, exchange, surrender, release, loss or
destruction of any such collateral; (vii) the failure to obtain or maintain a
right of contribution for the benefit of the Guarantor; (viii) errors or
omissions in connection with the Lenders' administration of the Guaranty
Obligations (except behavior constituting gross negligence or bad faith); or
(ix) any other act or omission that might in any manner or to any extent vary
the risk of the Guarantor or otherwise operate as a release or discharge of the
Guarantor, all of which may be done without notice to the Guarantor. To the
fullest extent
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permitted by law, the Guarantor hereby expressly waives any and all rights or
defenses arising by reason of (i) any "one action" or "anti-deficiency" law
which would otherwise prevent the Lenders from bringing any action, including
any claim for a deficiency, or exercising any other right or remedy (including
any right of set-off), against the Guarantor before or after the Lenders'
commencement or completion of any foreclosure action, whether judicially, by
exercise of power of sale or otherwise, or (ii) any other law which in any other
way would otherwise require any election of remedies by the Lenders.
4. UNENFORCEABILITY OF OBLIGATIONS AGAINST BORROWER. If for any
reason the Borrower has no legal existence or is under no legal obligation to
discharge any of the Guaranty Obligations, or if any of the Guaranty Obligations
have become irrecoverable from the Borrower by reason of the Borrower's
insolvency, bankruptcy or reorganization or by other operation of law or for any
other reason, this Guaranty shall nevertheless be binding on the Guarantor to
the same extent as if the Guarantor at all times had been the principal obligor
on all such Guaranty Obligations. In the event that acceleration of the time for
payment of any of the Guaranty Obligations is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, or for any other reason, all such
amounts otherwise subject to acceleration under the terms of the Credit
Agreement or any other agreement evidencing, securing or otherwise executed in
connection with any Guaranty Obligation shall be immediately due and payable by
the Guarantor.
5. SUBROGATION; SUBORDINATION. Until the payment and performance in
full of all of the Guaranty Obligations, the Guarantor shall not exercise and
hereby waives any rights against the Borrower arising as a result of payment by
the Guarantor hereunder, by way of subrogation, reimbursement, restitution or
otherwise, and will not prove any claim in competition with the Lenders in
respect of any payment hereunder in bankruptcy or insolvency proceedings of any
nature; the Guarantor will not claim any set-off or counterclaim against the
Borrower in respect of any liability of the Guarantor to the Borrower; and the
Guarantor waives any benefit of and any right to participate in any collateral
that may be held by the Lenders. The payment of any amounts due with respect to
any indebtedness of the Borrower now or hereafter held by the Guarantor is
hereby subordinated to the prior payment in full of the Guaranty Obligations;
provided, however, that, until the occurrence of any default in the payment or
performance of the Guaranty Obligations, the Borrower may pay any such
indebtedness of the Borrower to the Guarantor. The Guarantor agrees that after
the occurrence of any default in the payment or performance of the Guaranty
Obligations, the Guarantor will not demand, sue for or otherwise attempt to
collect any such indebtedness of the Borrower to the Guarantor until the
Guaranty Obligations shall have been paid in full. If, notwithstanding the
foregoing sentence, the Guarantor shall collect, enforce or receive any amounts
in respect of such indebtedness while any Guaranty Obligations are still
outstanding, such amounts shall be collected, enforced and received by the
Guarantor as trustee for the Lenders and be paid over to the Lenders on account
of the Guaranty Obligations without affecting in any manner the liability of the
Guarantor under the other provisions of this Guaranty.
6. GUARANTOR'S NON-RELIANCE. The Guarantor warrants to and agrees
with the Lenders that the Guarantor has adequate means to obtain from the
Borrower or others on a continuing basis information concerning the Borrower's
financial condition and affairs, and that the Guarantor is not relying on the
Lenders to provide such information at the date of executing this Guaranty or at
any time thereafter.
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7. SECURITY; SETOFF. The Guarantor grants to each Lender, as
security for the full and punctual payment and performance of all the
Guarantor's obligations hereunder, a continuing lien on and security interest in
all securities or other or other property belonging to the Guarantor now or
hereafter held by such Lender and in all deposits (general or special, time or
demand, provisional or final) and other sums credited by or due from such Lender
to the Guarantor or subject to withdrawal by the Guarantor. Regardless of the
adequacy of any collateral security or other means of obtaining payment of any
of the Guaranty Obligations, each Lender is hereby authorized after an Event of
Default (as defined in the Credit Agreement) and while it is continuing without
notice to the Guarantor (any such notice being expressly waived by the
Guarantor) and to the fullest extent permitted by law, to set off and apply any
deposits and other sums due from the Lender against the obligations of the
Guarantor under this Guaranty, whether or not the Lender shall have made any
demand under this Guaranty and although such obligations may be contingent or
unmatured.
8. FURTHER ASSURANCES. The Guarantor agrees that it will from time
to time, at the request of either Lender, do all such things and execute all
such documents as such Lender may reasonably consider necessary or desirable to
give full effect to this Guaranty and to perfect and preserve the rights and
powers of the Lenders hereunder.
9. TERMINATION; REINSTATEMENT. This Guaranty shall remain in full
force and effect until Fleet as agent for the Lenders is given written notice of
the Guarantor's intention to discontinue this Guaranty, notwithstanding any
intermediate or temporary payment or settlement of the whole or any part of the
Guaranty Obligations. No such notice shall be effective unless received and
acknowledged by an officer of Fleet at the address for notices set forth in
Section 12 below. No such notice shall affect any rights of the Lenders
hereunder, including without limitation the rights set forth in Sections 3 and
5, with respect to any Guaranty Obligations incurred or accrued prior to the
receipt of such notice or any Guaranty Obligations incurred or accrued pursuant
to any contract or commitment in existence prior to such receipt. This Guaranty
shall continue to be effective or be reinstated if at any time any payment made
or value received with respect to any Guaranty Obligation is rescinded or must
otherwise be returned by either Lender upon the insolvency, bankruptcy or
reorganization of the Borrower, or otherwise, all as though such payment had not
been made or value received.
10. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the
Guarantor, its successors and assigns, and shall inure to the benefit of and be
enforceable by the Lenders and their successors, transferees and assigns.
Without limiting the generality of the foregoing sentence, to the extent
permitted by the Credit Agreement, each Lender may assign or otherwise transfer
the Credit Agreement, the other Loan Documents or any other agreement or note
held by it evidencing, securing or otherwise executed in connection with the
Guaranty Obligations, or sell participations in any interest therein, to any
other entity or other person, and such other entity or other person shall
thereupon become vested, to the extent set forth in the agreement evidencing
such assignment, transfer or participation, with all the rights in respect
thereof granted to such Lender herein. The Guarantor may not assign any of its
obligations hereunder.
11. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Guaranty nor consent to any departure by the Guarantor therefrom shall
be effective unless the same shall be in writing and signed by the Lenders. No
failure on the part of the Lenders to
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exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right.
12. NOTICES. All notices and other communications called for
hereunder shall be made in writing and, unless otherwise specifically provided
herein, shall be deemed to have been duly made or given when delivered by hand
or mailed first class mail postage prepaid or, in the case of telecopied notice,
when transmitted, receipt confirmed, addressed as follows: if to the Guarantor,
at the address or telecopier number set forth below, and if to the Lenders, to
their agent, Fleet National Bank, at 100 Federal Street, Boston, Massachusetts
02110, Attention: Daniel G. Head, or at such address as any party may designate
in writing.
13. GOVERNING LAW; CONSENT TO JURISDICTION. This Guaranty is
intended to take effect as a sealed instrument and shall be governed by, and
construed in accordance with, the laws of The Commonwealth of Massachusetts
(excluding the laws applicable to conflicts or choice of law). The Guarantor
agrees that any suit for the enforcement of this Guaranty may be brought in the
courts of The Commonwealth of Massachusetts or any Federal Court sitting therein
and consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit's being made upon the Guarantor by mail at the
addresses set forth below. The Guarantor hereby waives any objection that it may
now or hereafter have to the venue of any such suit or any such court or that
such suit was brought in an inconvenient court.
14. WAIVER OF JULY TRIAL. EACH OF THE GUARANTOR AND EACH OF THE
LENDERS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY OF SUCH RIGHTS OR OBLIGATIONS.
Except as prohibited by law, each of the Guarantor and each of the Lenders
hereby waives any right that it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than or in addition to, actual
damages. The Guarantor (a) certifies that neither the Lenders nor any
representative, agent or attorney of the Lenders has represented, expressly or
otherwise, that the Lenders would not, in the event of litigation, seek to
enforce the foregoing waivers and (b) acknowledges that, in entering into the
Credit Agreement and the other Loan Documents to which the Lenders are parties,
the Lenders are relying upon, among other things, the waivers and certifications
contained in this Section 14.
15. MISCELLANEOUS. This Guaranty constitutes the entire agreement of
the Guarantor with respect to the matters set forth herein. This writing is
intended by the parties as a final, complete and exclusive expression of their
guaranty agreement. No course of dealing, course of performance or trade usage,
and no parol evidence of any nature, shall be used to supplement or modify any
terms. There are no conditions to the full effectiveness of this Guaranty. The
rights and remedies herein provided are cumulative and not exclusive of any
remedies provided by law or any other agreement, and this Guaranty shall be in
addition to any other guaranty of the Guaranty Obligations. The invalidity or
unenforceability of any one or more sections of this Guaranty shall not affect
the validity or enforceability of its remaining provisions. Captions are for the
ease of reference only and shall not affect the meaning of the relevant
provisions. The
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meanings of all defined terms used in this Guaranty shall be equally applicable
to the singular and plural forms of the terms defined.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as a sealed instrument as of the date appearing on page
one.
APPLIED SCIENCE AND TECHNOLOGY, INC.
By: /s/ Ron Weiger
---------------------------------
Title: Treasurer
Address: 6 Shattuck Rd
Andover, MA
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