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EXHIBIT 11
March 19, 1997
Ms. Dee DeFerrari, Senior Vice President
Plasma-Therm, Inc.
10050 16th Street North
St. Petersburg, Florida 33716
Dear Dee:
Thank you for the opportunity to make the following commitment to you.
NationsBank, N.A. (South) (the "Bank") is pleased to have approved for
Plasma-Therm, Inc. (the "Borrower") a credit facility consisting of a
$7,000,000 Confirmed Line of Credit and a $1,000,000 Term Loan (the "Loans").
This commitment is subject to the execution and delivery to the Bank of legal
documents yet to be prepared, including, without limitation, a loan agreement
and promissory notes. All such documents must be satisfactory in form and
substance to the Bank and its counsel. The making and funding of any loans
under this commitment is expressly subject in the Terms and Conditions
described herein:
TERMS AND CONDITIONS
BORROWER: Plasma-Therm, Inc.
AMOUNT AND TYPE OF LOANS:
(1) $7,000,000 Confirmed Line of Credit (the "Line")
(2) $1,000,000 Term Loan (the "Term Loan")
PURPOSE:
1) Fund short term working capital needs and support the issuance of letters
of credit.
2) Finance the purchase of capital equipment.
INTEREST RATE:
(1) Interest shall accrue on the unpaid principal balance at a floating rate
equal to the one month LIBOR, as determined by the Bank and adjusted for
reserves, deposit insurance assessments and other regulatory costs, plus 2.0%.
(2) Interest shall accrue on the unpaid principal balance at a floating rate
equal to the one month LIBOR, as determined by the Bank and adjusted for
reserves, deposit insurance assessments and other regulatory costs, plus 2.25%.
COMMITMENT FEES:
(1) Borrower agrees to pay a commitment fee equal to 3/4% of the Line upon the
closing of the Line. In addition, should the Bank elect to renew the Line at
its maturity and as long
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as no event of default occurred during the term of the Line, the renewal fee
shall be limited to 1/2% of the exiting loan amount.
(2) Borrower agrees to pay a commitment fee equal to 3/4% of the Term Loan upon
the closing of the Term Loan.
REPAYMENT TERMS:
(1) Repayment of the Line will consist of accrued interest paid monthly with
the principal balance and any accrued interest payable at maturity on May 19,
1998.
(2) The Term Loan shall be repaid in 35 consecutive monthly installments of
principal in the amount of $27,778, together with accrued interest payable and
one final installment of all unpaid principal and accrued interest on the 36th
and final payment.
LOAN DOCUMENTS: The Loans shall be made under and governed by definitive Loan
Documents to be executed and delivered by the Borrower to the Bank and
containing the terms set forth in this commitment and such other terms,
conditions, representations, warranties and covenants as are usual and
customary in lending transactions such as the Loans, which documents may
include one or more promissory notes, a loan agreement, security agreements,
financing statements and such other documents, instruments, certificates and
agreements executed and/or delivered by Borrower in connection with the Loans
(collectively, the "Loan Documents").
COLLATERAL:
(1) A first priority security interest in all accounts receivables owned by
the Borrower or hereafter acquired and all replacements and substitutions
thereof and proceeds thereof. In addition, the Borrower shall agree not to
encumber its inventory during the term of the Line.
(2) A first priority security interest in equipment to be purchased with the
Term Loan.
The Line and the Term Loan shall be cross-collateralized.
SURVIVAL: This commitment letter shall constitute one of the Loan Documents
and shall survive the closing of the Loans, the execution and delivery of all
Loan Documents, and the making of any advances or disbursements thereunder. In
the event of a conflict between a provision contained in this commitment letter
and a provision of any other Loan Document, the terms of the other Loan
Document shall control.
CONDITIONS TO FIRST ADVANCE: Prior to the making by the Bank of the first
advance to the Borrower, the following conditions precedent shall have been
satisfied:
1. The Bank shall have received, duly executed, all Loan Documents and any
other documents and instruments necessary or advisable in connection with the
Loan, all of which shall be in form and substance satisfactory to the Bank and
its counsel.
2. With respect to the personal property or other collateral described herein
referred to above, the Bank shall have received (i) casualty insurance policies
on tangible personal
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property naming the Bank as a loss payee thereunder, and (ii) evidence
satisfactory to the Bank as to the validity, enforceability and priority of the
Bank's security interest therein subject only to prior liens referred to in
this commitment and such other exceptions as may be acceptable to the Bank in
its sole discretion.
ADVANCE PROCEDURE: Advances under the Line will be made by telephonic or
written communication from a person reasonably believed by the Bank to be an
authorized representative of the Borrower. Unless otherwise agreed by the
Bank, all advances will be made to a demand deposit account maintained at the
Bank in the name of the Borrower.
BORROWING BASE: Notwithstanding the maximum amount of the Line, the total of
advances outstanding under the Line at any time shall not exceed an amount
equal to the sum of 80% of the book value of Borrower's eligible domestic
receivables, 80% of all foreign receivables backed by letters of credit and 50%
of all other eligible foreign receivables. For the purposes of the Line,
eligible accounts receivable shall mean all accounts receivables less than 60
days. To the extent the total of advances outstanding hereunder at any time
exceeds the Borrowing Base, Borrower shall immediately prepay the Line to such
extent.
REPORTING REQUIREMENTS: So long as the Borrower is indebted to the Bank, the
Borrower shall submit to the Bank the following:
1. Quarterly, within forty-five (45) days of the end of each fiscal quarter a
10Q report of the Borrower, including a balance sheet and income statement.
2. Annually, within one hundred and twenty (120) days following the end of the
Borrower's fiscal year, a balance sheet and income statement prepared in
accordance with generally accepted accounting principles on an audited basis by
an independent certified public accountant, including statements of financial
condition, income, cash flows and changes in shareholders' equity.
3. The Borrower shall submit to the Bank on a quarterly basis a report showing
a detailed aging of accounts receivable within thirty (30) days of the end of
each fiscal quarter.
4. The Borrower shall submit a quarterly borrowing base certificate showing
all eligible accounts receivable and the total of advances outstanding under
the Line within thirty (30) days of the end of each fiscal quarter. At each
submission, the borrowing base certificate shall be calculated based on
accounts receivables as of the previous fiscal quarter end.
REPRESENTATIONS AND WARRANTIES: Customary, including confirmation of corporate
status and authority; execution, delivery and performance of Loan Documents do
not violate law or existing agreements; no litigation except as disclosed to
Bank; ownership of property; payment of taxes; no material adverse change in
financial condition or operations since November 30, 1996; principal place of
business; compliance with environmental laws and continuation of
representations and warranties.
FINANCIAL COVENANTS: Until full payment and performance of all obligations of
the Borrower under the Loans, Borrower will, unless Bank consents otherwise in
writing (and without limiting any requirement of any other loan document):
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1. Total Liabilities to Tangible Net Worth Ratio: Maintain a ratio of Total
Liabilities to Tangible Net Worth of not greater than 1.00 to 1.00 as of the
end of each of Borrower's fiscal quarters. Tangible Net Worth is defined as
total assets less total liabilities less intangibles, goodwill, leasehold
improvements, and due from officers, stockholders and affiliates.
2. Cash Flow Coverage Ratio: Maintain a minimum Cash Flow Coverage Ratio of
not less than 2.00 to 1.00. This ratio shall be defined as: net income plus
depreciation expense plus amortization expense, plus interest expense, plus
non-cash expenses less non-cash gains, less cash dividend payments, less
capital stock repurchases all divided by the sum of current maturities of long
term debt and capital lease obligations plus interest expense. This covenant
shall be measured quarterly on a rolling four quarter basis. At each quarter
end, the numerator will be determined based on the previous four fiscal
quarters while the denominator will be determined based on the subject fiscal
quarter end. Interest expense for both the numerator and the denominator will
be determined based on the subject fiscal quarter end.
All accounting terms not specifically defined or specified herein shall have
the meanings generally attributed to such terms under generally accepted
accounting principles ("GAAP"), as in effect from time to time, consistently
applied.
AFFIRMATIVE COVENANTS: Customary, including the delivery of financial
statements, reports and other information requested by Bank; maintenance of
insurance; continuation of business and maintenance of existence; compliance
with laws; payment of taxes; maintenance of property and notice of
environmental claims.
NEGATIVE COVENANTS: Customary, including: capital expenditures of not more
than $4,000,000 each fiscal year; transfer of assets; additional borrowings
shall not exceed $1,000,000 annually; no additional liens on assets with the
exception of those associated with the $1,000,000 in additional borrowings
permitted.
EVENTS OF DEFAULT: A default shall occur under this letter of commitment and
under each of the Loan Documents and under any other promissory note executed
by Borrower in favor of Bank if the Borrower defaults in the payment of any
amounts due and owing under the Loan or any other indebtedness owing to Bank
within fifteen (15) days of its due date or fails to timely and properly
observe, keep or perform any term, covenant, agreement or condition in any of
the Loan Documents or in any other loan agreement, promissory note, or other
contract securing or evidencing payment of any indebtedness of Borrower, any
endorser or any guarantor of any loan to the Bank.
REMEDIES UPON DEFAULT: If the event a default shall occur Bank shall have all
rights, powers and remedies available under each of the Loan Documents as well
as all rights and remedies available at law or in equity.
CLOSING COSTS AND EXPENSES: The Borrower shall be responsible and liable for,
and shall hold the Bank harmless from, and shall pay, all costs and expenses
incurred by
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the Bank in connection with the Bank's review, due diligence and closing of the
Loans except reasonable attorney fees which are to be paid by the Bank.
MATERIAL ADVERSE CHANGE: This commitment may be terminated, in the sole
discretion of the Bank, upon the occurrence of a material adverse change in the
financial condition of the Borrower.
NON-ASSIGNABLE: This commitment and the right of the Borrower to receive loans
hereunder may not be assigned by Borrower.
RELIANCE: This commitment constitutes an offer by the Bank to the Borrower to
make the Loans on the terms and conditions set forth herein and should not be
relied upon by any third party for any purpose.
AMENDMENT AND WAIVER: No alteration, modification, amendment or waiver of any
terms and conditions of this commitment, or of any of the documents required by
or delivered to the Bank under this commitment, shall be effective or
enforceable against the Bank unless set forth in a writing signed by the Bank.
GOVERNING LAW: This commitment and the Loans shall be governed by and
construed in accordance with the laws of the State of Florida (without regard
to choice of law principles).
INTEGRATION: The terms set forth above represent the entire understanding
between the Borrower and the Bank with respect to the subject matter of this
commitment, and this commitment supersedes any prior and contemporaneous
agreements, commitments, discussions and understandings, oral or written, with
respect to the subject matter of this commitment.
ARBITRATION: ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE AND
ANY SUCCESSOR THEREOF (J.A.M.S.), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY
PARTY TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS
AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
THE CITY OF THE BORROWER'S DOMICILE AT TIME OF THE EXECUTION OF THIS
INSTRUMENT, AGREEMENT OR DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT
AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING
THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60
DAYS.
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B. RESERVATION OF RIGHTS. NOTHING IN THIS INSTRUMENT,
AGREEMENT OR DOCUMENT SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY
OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED
IN THIS AGREEMENT; OR (II) BE A WAIVER BY THE BANK OF THE PROTECTION AFFORDED
TO IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III)
LIMIT THE RIGHT OF THE BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS
(BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL
PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR
THE APPOINTMENT OF A RECEIVER. THE BANK MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES
BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT
PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF
SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR
FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF
THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE
THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
EXPIRATION: This commitment shall expire on March 30, 1997. In addition, this
commitment is to be closed within thirty (30) days of the acceptance date.
Should this commitment not be accepted by the expiration date, and not closed
within thirty (30) days of the acceptance date, then the Bank shall have no
further obligation to extend credit hereunder.
Thank you for the opportunity to provide you with the financial services of
NationsBank.
Sincerely,
/s/ James E. Harden, Jr.
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James E. Harden, Jr.
Vice President
The terms and conditions set forth above are accepted this 19th day of March,
1997.
Plasma-Therm, Inc.
/s/ Dee DeFerrari
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Dee DeFerrari
Senior Vice President
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