SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
FERROFLUIDICS CORPORATION
(NAME OF SUBJECT COMPANY)
FERROTEC ACQUISITION, INC.
FERROTEC CORPORATION
(BIDDERS)
------------------------
COMMON STOCK, $.004 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
------------------------
315414 20 1
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
AKIRA YAMAMURA
FERROTEC CORPORATION
SUMITOMO BLDG. #6
5-24-8 HIGASHI UENO
TAITO-KU, TOKYO 110-0015, JAPAN
TELEPHONE: 03(3845)1032
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
------------------------
COPY TO:
ALAN H. ARONSON, ESQ.
AKERMAN, SENTERFITT & EIDSON, P.A.
ONE SOUTHEAST THIRD AVENUE
28TH FLOOR
MIAMI, FLORIDA 33131-1714
TELEPHONE: (305) 374-5600
<PAGE>
This Amendment No. 1 amends and supplements the Tender Offer Statement
on Schedule 14D-1 (as amended, the "Schedule 14D-1") filed on October 26, 1999,
relating to the offer by Ferrotec Acquisition, Inc., a Massachusetts corporation
(the "Purchaser") and a wholly owned subsidiary of Ferrotec Corporation, a
Japanese corporation (the "Parent"), to purchase all outstanding shares of the
common stock, par value $.004 per share (the "Common Stock"), including the
associated preferred share purchase rights (the "Rights," and together with the
Common Stock, the "Shares") of Ferrofluidics Corporation, a Massachusetts
corporation (the "Company"), at a price of $6.50 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Purchaser's
Offer to Purchase for Cash dated October 26, 1999 (the "Offer to Purchase") and
in the related Letter of Transmittal (which together constitute the "Offer").
Capitalized terms not defined herein have the meanings assigned thereto in the
Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(b) The information set forth in the tenth paragraph of the
"Introduction" of the Offer to Purchase is hereby amended to state that the
Minimum Condition will be satisfied if 3,001,254 Shares are validly tendered and
not withdrawn prior to the expiration of the Offer, rather than 3,007,256.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(b) The information set forth in the third paragraph of Section 10,
"Source and Amount of Funds," of the Offer to Purchase is hereby deleted and
replaced with the following paragraph.
Additionally, Parent entered into loan agreements with several
institutions on November 19, 1999 for certain new long-term credit facilities.
The first long-term credit facility is with The Bank of Tokyo-Mitsubishi in the
amount of (Y) 1,000 million ($10,000,000 million), will have a term of six years
and will bear interest at the rate of 2.37%. The second long-term credit
facility is also with The Bank of Tokyo-Mitsubishi in the amount of (Y) 500
million ($5,000,000 million), will have a term of six years and will bear
interest at the rate of 2.37%. The third long-term credit facility is with
Kitanihon Bank in the amount of (Y) 100 million ($1.0 million), will have a term
of five years, and will bear interest at the rate of 2.375%. The fourth
long-term credit facility is with Dai-ichi Life Insurance Mutual Corporation in
the amount of (Y) 200 million ($2.0 million), will have a term of two years, and
will bear interest at the rate of 1.675%. The final long-term credit facility is
with Meiji Life Insurance Mutual Corp. Inc. in the amount of (Y) 300 million
($2.9 million), will have a term of five years, and will bear interest at the
rate of 2.3%.
<PAGE>
ITEM 10. ADDITIONAL INFORMATION.
(b) The information set forth in paragraph (a) of Section 15, "Certain
Legal Matters," of the Offer to Purchase regarding the date that the Company's
Board of Directors approved the Merger Agreement, the Offer, and the Merger and
the Purchaser's and Parent's acquisition of Shares pursuant to the Offer and the
Merger is hereby amended to state that such approval occurred on October 14,
1999 rather than October 20, 1999.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
99(b)(1) Loan Agreement between Ferrotec Corporation and The Bank of
Tokyo-Mitsubishi dated November 19, 1999.(1)
99(b)(2) Loan Agreement between Ferrotec Corporation and The Bank of
Tokyo-Mitsubishi dated November 19, 1999.(1)
99(b)(3) Loan Agreement between Ferrotec Corporation and Dai-ichi Life
Insurance Mutual Corporation dated November 19, 1999.(1)
99(b)(4) Loan Agreement between Ferrotec Corporation and Meiji Life
Insurance Mutual Corp. Inc. dated November 19, 1999.(1)
99(b)(5) Loan Agreement between Ferrotec Corporation and Kitanihon Bank
dated November 19, 1999.(1)
- ---------------
(1) Pursuant to Rule 306 of Regulation S-T, this exhibit is a fair and accurate
English translation of the loan agreement originally written in Japanese.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
FERROTEC ACQUISITION, INC.
By: /s/ Richard R. Cesati, II
----------------------------------
Name: Richard R. Cesati, II
Title: President
Date: November 19, 1999
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
FERROTEC CORPORATION
By: /s/ Akira Yamamura
-----------------------------------
Name: Akira Yamamura
Title: President
Date: November 19, 1999
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
99(b)(1) Loan Agreement between Ferrotec Corporation and The Bank of
Tokyo-Mitsubishi dated November 19, 1999.(1)
99(b)(2) Loan Agreement between Ferrotec Corporation and The Bank of
Tokyo-Mitsubishi dated November 19, 1999.(1)
99(b)(3) Loan Agreement between Ferrotec Corporation and Dai-ichi Life
Insurance Mutual Corporation dated November 19, 1999.(1)
99(b)(4) Loan Agreement between Ferrotec Corporation and Meiji Life
Insurance Mutual Corp. Inc. dated November 19, 1999.(1)
99(b)(5) Loan Agreement between Ferrotec Corporation and Kitanihon Bank
dated November 19, 1999.(1)
- ----------------
(1) Pursuant to Rule 306 of Regulation S-T, this exhibit is a fair and accurate
English translation of the loan agreement originally written in Japanese.
EXHIBIT 99(b)(1)
[Pursuant to Rule 306 of Regulation S-T, on behalf of Ferrotec
Corporation, I hereby represent that the following is a fair and accurate
English translation of the loan agreement originally written in Japanese.
FERROTEC CORPORATION
By: /s/ Akira Yamamura
-----------------------------------
Name: Akira Yamamura
Title: President]
LOAN AGREEMENT
November 19, 1999
To: The Bank of Tokyo-Mitsubishi Ltd.
Borrower: Ferrotec Corporation (Company Seal)
5-24-8 Higashi-Ueno, Higashi-Ku, Tokyo
Akira Yamamura, Representative Director
Guarantor: ___________________________________
Guarantor: ___________________________________
Borrower, in acknowledgement of the terms and conditions of this basic bank
transaction agreement, enters into this Loan Agreement with the Bank as set
forth herein.
ARTICLE 1 LOAN
Borrower has borrowed money according to the following terms:
<TABLE>
<CAPTION>
<S> <C>
1. Amount: (Y) 1,000,000,000 2. Purpose: Funds to purchase a U.S. Corporation
3. Interest Rate: 2.37% (Penalty rate at 14% per year) 4. Guarantor/Guarantee: ---------------
5. Repayment Schedule:
(1) The initial and final payments shall be tendered as follows:
Initial: May 31, 2000 ---(Y) 83,000,000 Final: Nov. 30, 2005 ---(Y)87,000,000
(2) The second and subsequent payments (excluding the final payment) shall be tendered as follows:
November 2000 --- (Y) 83,000,000 through [3] May 2005 --- (Y) 83,000,000
[4] -------- [5] --------
[6] -------- [7] --------
[8] -------- [9] --------
[10] -------- [11] --------
(3) The payments set forth in (2) above shall be tendered on the last day of the specified month.
(4) In the event that any of the repayment dates in (1) and (2) fall on a bank holiday, the repayment
date shall be as follows:
[a] Business day preceding bank holiday [b] Business day following bank holiday
[c] Business day following bank holiday, except business day preceding bank holiday when agreed
6. Interest Payment
(1) [Line deleted] (Company Seal)
(2) In the event that any of the interest repayment dates fall on a bank holiday, the provisions of
(4) shall apply.
7. Account of Payment Branch: Tamaike Branch Account No.: 9003109 Name: Borrower
</TABLE>
<PAGE>
ARTICLE 2 PREPAYMENT
In the event that Borrower prepays part of the loan, the prepayment shall
be first applied to the scheduled final payment and then in reverse order
according to the repayment terms set forth herein unless otherwise
specified.
ARTICLE 3 PROMISSORY NOTE
1. Borrower shall provide a signed promissory note for the borrowed
amount set forth in Article 1 by the date specified by the Bank, and
renew the promissory note until this loan has been fully repaid.
2. In the event that Bank consents, Borrower will not be required to
provide a promissory note. However, Borrower shall immediately provide
a promissory note to Bank in accordance with this clause in the event
that the Bank requests such note at a later date.
ARTICLE 4 AUTOMATIC DEBIT OF PRINCIPAL AND INTEREST
1. Borrower acknowledges that payments of principal shall be paid by
debiting the bank account delineated in Article 1, Clause 7 on the
prescribed repayment date.
a) Borrower shall not tender a check, withdrawal slip, or similar
payment instrument in correlation with this transaction
regardless of any contrary provision contained in the current
account or ordinary savings account agreements.
b) In the event that funds in Borrower's account are insufficient to
satisfy payment on the repayment date, Bank may debit such amount
at any time when the account contains sufficient funds.
2. Borrower acknowledges that Bank shall debit Borrower's account for any
interest, penalties, or any other charges related to this loan in
accordance with the terms of Article 4.1.
3. Borrower shall comply with the Bank's direction in the event that a
payment method other than that set forth in Article 4.1 and 4.2.
ARTICLE 5 COSTS AND EXPENSES
Borrower shall bear all expenses related to this document, the notarized
instrument referenced in Article 7, and the disposition of collateral, and
all other expenses related to this Agreement.
ARTICLE 6 GUARANTEE
1. Guarantor shall bear all obligations agreed to by Borrower,
2. The obligations of Guarantor shall not be affected in the event that
Bank alters or releases the collateral according to the circumstances.
3. No deposits or other rights in relation to Borrower's bank shall inure
to Guarantor.
4. Once Guarantor has secured the debt, any right vested in the Bank with
regard to the security shall not be exercised during the term of this
transaction between Borrower and Bank without the Bank's consent. If
the Bank so requests, the rights and standing shall be transferred
without cost to the Bank.
5. In the event that the Guarantor's obligations to the Borrower is used
as security for another guarantee, or in the event that such security
is used as guarantee in the future, absent a separate agreement, the
security shall completely guarantee Borrower's obligation. This
security shall not be affected by any other security.
ARTICLE 7 NOTARIZED INSTRUMENT
Borrower and Guarantor shall immediately take all necessary measures to
prepare a notarized instrument recognizing compulsory execution of this
Agreement.
SPECIAL AGREEMENT
(CompanySeal) Interest shall be repaid commencing on Feb. 29, 2000, and every
three (3) months thereafter with the final payment due on the
date set forth herein. Interest payments shall be paid for
interest accumulating from the day after the prior payment
(initial payment from date of contract).
<TABLE>
<CAPTION>
<S> <C>
Note: Regardless of whether interest is calculated semiannually or annually, the
following calculation method shall be used.
[Principal ((Y)100 units) x days x annual interest rate] / 365 = interest (rounded to nearest yen)
</TABLE>
EXHIBIT 99(b)(2)
[Pursuant to Rule 306 of Regulation S-T, on behalf of Ferrotec
Corporation, I hereby represent that the following is a fair and accurate
English translation of the loan agreement originally written in Japanese.
FERROTEC CORPORATION
By: /s/ Akira Yamamura
-----------------------------------
Name: Akira Yamamura
Title: President]
LOAN AGREEMENT
November 19, 1999
To: The Bank of Tokyo-Mitsubishi Ltd.
Borrower: Ferrotec Corporation (Company Seal)
5-24-8 Higashi-Ueno, Higashi-Ku, Tokyo
Akira Yamamura, Representative Director
Guarantor: ___________________________________
Guarantor: ___________________________________
Borrower, in acknowledgement of the terms and conditions of this basic bank
transaction agreement, enters into this Loan Agreement with the Bank as set
forth herein.
ARTICLE 1 LOAN
Borrower has borrowed money according to the following terms:
<TABLE>
<CAPTION>
<S> <C>
1. Amount: (Y) 500,000,000 2. Purpose: Funds to purchase a U.S. corporation
3. Interest Rate: 2.375% (Penalty rate at 14% per year) 4. Guarantor/Guarantee: ---------------
5. Repayment Schedule:
(1) The initial and final payments shall be tendered as follows:
Initial: May 31, 2000 ---(Y) 42,000,000 Final: Nov. 30, 2005 ---(Y)38,000,000
(2) The second and subsequent payments (excluding the final payment) shall be tendered as follows:
November 2000 --- (Y) 42,000,000 through [3] May 2005 --- (Y) 42,000,000
[4] -------- [5] --------
[6] -------- [7] --------
[8] -------- [9] --------
[10] -------- [11] --------
(3) The payments set forth in (2) above shall be tendered on the last day of the specified month.
(4) In the event that any of the repayment dates in (1) and (2) fall on
a bank holiday, the repayment date shall be as follows.
[a] Business day preceding bank holiday [b] Business day following bank holiday
[c] Business day following bank holiday, except business day preceding bank holiday when agreed
6. Interest Payments
(1) Interest shall be paid every three months on the date prescribed in (3) above, and interest shall
be paid in advance from the date of this loan through the date of the next interest payment
(from the day following the last payment to the date of the next interest payment for the second
and all subsequent payments).
(2) In the event that any of the interest repayment dates fall on a bank holiday, the provisions of (4) shall apply.
7. Account of Payment Branch: Account No.: Name:
</TABLE>
<PAGE>
ARTICLE 2 PREPAYMENT
In the event that Borrower prepays part of the loan, the prepayment shall
be first applied to the scheduled final payment and then in reverse order
according to the repayment terms set forth herein unless otherwise
specified.
ARTICLE 3 PROMISSORY NOTE
1. Borrower shall provide a signed promissory note for the borrowed
amount set forth in Article 1 by the date specified by the Bank, and
renew the promissory note until this loan has been repaid.
2. In the event that Bank consents, Borrower will not be required to
provide a promissory note. However, Borrower shall immediately provide
a promissory note to Bank in accordance with this clause in the event
that the Bank requests such note at a later date.
ARTICLE 4 AUTOMATIC DEBIT OF PRINCIPAL AND INTEREST
1. Borrower acknowledges that payments of principal shall be paid by
debiting the bank account delineated in Article 1, Clause 7 on the
prescribed repayment date.
a) Borrower shall not tender a check, withdrawal slip, or similar
payment instrument in correlation with this transaction regardless
of any contrary provision contained in the current account or
ordinary savings account agreements.
b) In the event that funds in Borrower's account are insufficient to
satisfy payment on the repayment date, Bank may debit such amount
at any time when the account contains sufficient funds.
2. Borrower acknowledges that Bank shall debit Borrower's account for any
interest, penalties, or any other charges related to this loan in
accordance with the terms of Article 4.1.
3. Borrower shall comply with the Bank's direction in the event that a
payment method other than that set forth in Article 4.1 and 4.2.
ARTICLE 5 COSTS AND EXPENSES
Borrower shall bear all expenses related to this document, the notarize
instrument referenced in Article 7, and the disposition of collateral, and
all other expenses related to this Agreement.
ARTICLE 6 GUARANTEE
1. Guarantor shall bear all obligations agreed to by Borrower,
2. The obligations of Guarantor shall not be affected in the event that
Bank alters or releases the collateral according to the circumstances.
3. No deposits or other rights in relation to Borrower's bank shall inure
to Guarantor.
4. Once Guarantor has secured the debt, any right vested in the Bank with
regard to the security shall not be exercised during the term of this
transaction between Borrower and Bank without the Bank's consent. If
the Bank so requests, the rights and standing shall be transferred
without cost to the Bank.
5. In the event that the Guarantor's obligations to the Borrower is used
as security for another guarantee, or in the event that such security
is used as guarantee in the future, absent a separate agreement, the
security shall completely guarantee Borrower's obligation. This
security shall not be affected by any other security.
ARTICLE 7 NOTARIZED DOCUMENT
Borrower and Guarantor shall immediately take all necessary measures to
prepare a notarized document recognizing compulsory execution of this
Agreement.
SPECIAL AGREEMENT
Note: Regardless of whether interest is calculated semiannually or annually, the
following calculation method shall be used.
<TABLE>
<S> <C> <C> <C>
Principal ((Y)100 units x days x annual interest rate]/365 = interest (rounded to nearest yen)
</TABLE>
EXHIBIT 99 (b)(3)
[Pursuant to Rule 306 of Regulation S-T, on behalf of Ferrotec
Corporation, I hereby represent that the following is a fair and accurate
English translation of the loan agreement originally written in Japanese.
FERROTEC CORPORATION
By: /s/ Akira Yamamura
-----------------------------------
Name: Akira Yamamura
Title: President]
LOAN AGREEMENT
ARTICLE 1 LOAN
Dai-ichi Life Insurance Mutual Corporation (hereinafter referred to as
"Lender") has agreed to loan to the borrower named below (hereinafter
referred to as "Borrower"), and Borrower has agreed to receive such loan
according to the terms and conditions set forth herein:
1. Borrower Ferrotec Corporation
2. Amount (Y) 200,000,000 3. Purpose: Equipment investment
4. Maturity Date November 30, 2001
5. Repayment Payments shall be tendered on the last day of every month
commencing in March 2000. The sum of (Y) 9.5 million
shall be repaid each month until October 2001.
The sum of (Y) ---- shall be repaid until each month
until --------.
Any remaining amount shall be paid at the maturity date
above.
6. Interest Rate 1.675% Calculated daily with 1 year comprising
365 days.
The interest rate may be altered by mutual agreement of
the parties in accordance with market conditions.
Borrower shall comply with any separate agreement reached
between the parties through mutual discussions.
7. Interest Repayment
Interest shall be paid on the loan date as well as every
month on the ____ day commencing on _____________, and
interest calculated from the loan date or day following
the prior interest payment date to either the next
interest payment date or maturity date set forth above,
whichever is applicable, shall be prepaid.
8. Bank and Year End Holidays
In the event that the date for payment of principal or
interest falls on a bank holiday, such payment shall be
made on the preceding business day. Bank holidays include
non-business days as well as December 30 and December 31.
In addition, Borrower shall follow any other instructions
received from the Lender.
9. Payment Location
Payment of principal and interest and the performance of
any other obligation arising under his Agreement shall be
performed at the location and in accordance with any
directions specified by Lender.
10. Penalty In the event that Borrower fails to perform the financial
obligations prescribed in this Agreement, or comply with
the interest payment maturity dates specified in Article
3, Borrower shall pay a penalty on the outstanding loan
amount of 14% per year commencing from the day after the
scheduled payment date.
ARTICLE 2 COLLATERAL
Borrower shall not harm or engage in any act that may impair its valuable
assets, current or future, by transferring, leasing, or otherwise pledging
such assets without the consent of Lender. Upon the request of Lender,
Borrower shall pledge the assets specified by Lender as collateral for the
obligations arising under this Agreement, and shall take all necessary
steps to secure the loan.
<PAGE>
ARTICLE 3 REPAYMENT ACCELERATION
1. Regardless of any notice from Lender, Borrower shall immediately repay
its financial obligations in full and shall forfeit all interest paid
to Lender in consideration of its obligations to Lender, in the event
of the following:
a) Borrower stops repayment, becomes insolvent, or commences
procedures for recomposition, restructuring, reorganization, or
liquidation;
b) Stop payment received from check clearing institution;
c) Notice of seizure, temporary impoundment, injunction, or
disposition is sent; or
d) Borrower's location is unknown due to the fault of Borrower such
as the failure to submit a change of address notice.
2. Upon notice from Lender, Borrower shall immediately repay its
financial obligations in full and shall forfeit all interest paid to
Lender in consideration of its obligations to Lender in the event of
the following:
a) Failure to pay the principal or interest required by this
Agreement even on one occasion;
b) Notice of seizure, temporary impoundment, injunction, or
disposition regarding Borrower's assets is sent, or sale of
Borrower is declared;
c) Material adverse change to Borrower's credit standing due to the
deterioration of business or assets;
d) Borrower fails to tender sufficient funds even on one occasion;
e) Breach of the material terms of this Agreement, actions that harm
Lender, and the performance of any other act in bad faith;
f) Any of the items in this Section apply to any Guarantor or
provider of collateral under this Agreement;
g) At any other time when necessary and Lender has just cause in
protecting its interest.
ARTICLE 4 DISBURSEMENT IN INSTALLMENTS
1. In the event that the loan is to be disbursed in installments pursuant
to this Agreement, the parties shall discuss and agree upon the
disbursement schedule and sum.
2. In the event that one of the events specified in Article 3 applies to
Borrower, any Guarantor, or provider of collateral.
3. Regardless of Article 1 and the other preceding Articles, Lender may
disburse any remaining loan amount two years after the execution of
this Agreement.
ARTICLE 5 OFFSET
1. In the event that the loan has matured, or the payment of the interest
is accelerated, or any other reason arises requiring Borrower to
satisfy its obligations under this Agreement, Lender may at any time
offset any claim of Borrower or any Guarantor notwithstanding the
maturity of such claim.
2. In the event that payment of interest is accelerated, any insurance
agreement between Lender and Borrower, or Lender and any Guarantor,
may be terminated despite the contrary intent of the parties, and such
termination shall be deemed effective as of the acceleration date.
Lender may offset any proceeds from such cancellation against the
outstanding loan balance.
3. In the event that Lender elects to offset as described in Sections 5.1
or 5.2, the calculation period for offset of interest and penalties on
any outstanding obligation shall be until the actual calculation date.
ARTICLE 6 PREPAYMENT
1. When Borrower desires to prepay part or all of the principal prior to
the loan maturity date not in accordance with the repayment schedule
prescribed in this Agreement, Borrower shall provide written notice to
Lender ten (10) business days prior to such repayment, and shall
receive prior consent from Lender.
2. In the event of prepayment pursuant to Article 6.1, upon the request
of Lender and in the event that Lender's return as agreed upon by the
parties does not amount to Lender's actual investment return, Borrower
shall pay to Lender a penalty in the amount specified by Lender within
the range of the difference between the return agreed upon by the
parties and Lender's normal return as calculated from the date after
the maturity date until the date of calculation (Based on calculations
with one year consisting of 365 days).
3. In the event the penalty amount calculated according to Article 6.2 is
less than two percent (2%) of the total repayment amount, or in the
event that the return agreed upon by the parties does not amount to
Lender's actual investment return, Lender may specify the amount of
penalty up to 2% of the prepayment amount.
<PAGE>
ARTICLE 7 REPAYMENT PRIORITY
In the event that the repayment proceeds are insufficient to eliminate
Borrower's obligation to Lender under this Agreement or any other
outstanding obligation, Lender may specify the appropriate order of
repayment, and Borrower shall not object to this order.
ARTICLE 8 PROMISSORY NOTE
Upon the request of Lender, Borrower shall provide a promissory note
acceptable to Lender to secure the obligations arising under this
Agreement. Nonetheless, Lender may still demand Borrower perform the
obligations set forth in this Agreement without resorting to the rights
granted in such promissory note.
ARTICLE 9 ADDITIONAL SECURITY AND COLLATERAL
Upon the request of Lender, when just cause arises necessitating
additional security, Borrower shall supplement security by immediately
providing new or additional collateral or supplying Guarantor(s)
acceptable to Lender.
ARTICLE 10 LIABILITY AND INDEMNITY
1. In the event Lender suffers any loss, harm, or injury due to the loss
or destruction of any document or note due to such unforeseen
circumstances as a disaster, accident, or shipping mishap, Borrower
shall honor its obligation based on the Lender's books and records.
Moreover, upon the request of Lender, Borrow shall immediately provide
Lender with a copy of such documentation or note. In the event of
injury caused thereby, Borrower shall not seek damages against Lender.
2. In the event that Lender has transacted business confirming with
reasonable care that the signatures and seals on Borrower's document
or note are correct, Borrower shall bear all liabilities arising from
the forgery, alteration, or other incident associated with such
documents, notes, or writings, and assume all responsibility for the
content of such documents and notes.
ARTICLE 11 GUARANTOR ACKNOWLEDGMENT
1. Guarantor shall not raise any objection whatsoever in the event that
Lender, at its own discretion, substitutes or releases part or all of
the collateral or security secured under this Agreement, and shall not
make any claim against Lender in the event that liability is incurred
as the result of substitution or release.
2. In the event that Guarantor satisfies part or all of the obligations
set forth in this Agreement, Guarantor shall not use any right
received from Lender without Lender's consent, and shall transfer to
Lender any such right or value obtained under the Agreement upon the
request of Lender.
ARTICLE 12 BUSINESS CHANGES
Borrower shall notify and receive Lender's prior consent when it intends
to make any material changes to its business including a merger, complete
or partial sale, or capital reduction.
ARTICLE 13 REPORTING BUSINESS CHANGES
1. Borrower shall immediately notify Lender in writing of any changes in
its corporate name, trademarks, corporate officers, address, or
corporate seal to Lender.
2. When any notice or documentation sent by Lender to Borrower is delayed
or returned due to Borrower's failure to provide notice of the above
changes, it shall be deemed that such document arrived in its normal
course. In addition, Borrower shall completely indemnify Lender for
all liabilities arising due to Borrower's failure to comply with
Article 13.1.
ARTICLE 14 DUTY TO REPORT
1. Borrower shall provide Lender with a balance sheet, cash flow
statement, ledger showing outstanding loans, and other detailed
financial statements at the end of each fiscal year.
2. Upon request, Borrower shall immediately provide to Lender documents
such as a loan balance table, list of capital, and detail financial
statements.
3. In addition to the documents listed above, Lender may request
production or inspection of reports concerning assets, operations, and
financial condition at any time.
<PAGE>
4. When a material change actually occurs with regard to the assets,
operations, or financial condition of Borrower, or when such change is
imminent, Borrower shall immediately inform Lender of such change
without any request from Lender.
ARTICLE 15 NOTARIZED INSTRUMENT
1. Upon request of Lender at any time, Borrower shall take the necessary
procedures to create a notarized instrument, and cause a notary public
to notarize such instrument. Borrower shall accept compulsory
execution of this instrument in recognition of the obligations
contained in this Agreement
2. Section 15.1 applies to any Guarantor as well.
ARTICLE 16 EXPENSES
Borrower shall bear all expenses necessary for the creation of this
Agreement, the execution of any other related agreement, performance of
this Agreement, and the means enabling Lender to exercise its rights in
connection with this Agreement.
ARTICLE 17 JURISDICTION AND VENUE
The laws of Japan shall apply to the transaction underlying this
Agreement, and in the event of any dispute concerning the rights and
obligations arising under this Agreement, the court of proper jurisdiction
shall be the Tokyo District Court.
One copy of this document has been created and sealed (stamped) by the parties
as a testament of this Agreement. This copy will be maintained by Lender.
November 19, 1999
Lender Dai-ichi Life Insurance Mutual Corp., Inc.
1-13-1 Yurakucho, Chiyoda-ku, Tokyo
Tomijiro Morita
Borrower Ferrotech, Inc.
5-24-8 Higashi-Ueno, Higashi-ku, Tokyo
Akira Yamamura, Representative Director [COMPANY SEAL]
EXHIBIT 99(b)(4)
[Pursuant to Rule 306 of Regulation S-T, on behalf of Ferrotec
Corporation, I hereby represent that the following is a fair and accurate
English translation of the loan agreement originally written in Japanese.
FERROTEC CORPORATION
By: /s/ Akira Yamamura
-----------------------------------
Name: Akira Yamamura
Title: President]
LOAN AGREEMENT
November 19, 1999
Lender Meiji Life Insurance Mutual Corp., Inc.
2-1-1 Marunouchi, Chiyoda-ku, Tokyo
Ryotaro Kaneko
Borrower Ferrotech, Inc.
5-24-8 Higashi-Ueno, Higashi-ku, Tokyo
(Representative) Akira Yamamura, Representative Director [COMPANY SEAL]
ARTICLE 1 LOAN
Meiji Life Insurance Mutual Corp. Inc. (hereinafter referred to as
"Lender") has agreed to loan to Ferrotech, Inc. (hereinafter referred to
as "Borrower"), and Borrower has agreed to receive such loan according to
the terms and conditions set forth herein.
1. Amount (Y) 300,000,000 cash
2. Method Lump sum
3. Purpose Operating funds
4. Maturity Date November 2004
5. Interest Rate 2.3% yearly (Calculated on daily basis with 1 year
consisting of 365 days.) Except when the parties agree
otherwise in a separate agreement
6. Repayment (1) Repayment method for principal
Repayment shall occur in installments of
(Y)30,000,000 with one payment due in May 2000,
and the other payments due on the ___ day of
every May and November thereafter until the
final payment which is due on the maturity date.
(2) Repayment method for interest
The payment date for interest shall be on the
_____ day of May and November of each year as
well as the maturity date. Interest payments
shall consist of interest accruing from the loan
date or day following the prior interest payment
until the date of the actual interest payment.
7. Bank holiday In the event that the payment date for principal,
interest, or any other obligation falls on a bank
holiday or December 30, payment shall be made on the
business day immediately preceding the holiday.
8. Payment location:
Payment of principal and interest or the performance of
any other obligations shall be made at Lender's head
office or a location specified by Lender. Borrower shall
follow any directions given by Lender in regard to the
method of payment.
<PAGE>
ARTICLE 2 PREPAYMENT
1. Regardless of the repayment method prescribed in Article 1, when
Borrower attempts to prepay all or part of the outstanding principal
prior to the maturity date, Borrower shall first obtain the consent of
Lender.
2. In the event that Borrower prepays the loan pursuant to Article 2.1,
upon the request of Lender, Borrower shall pay a penalty according to
the following schedule. The penalty shall be capped at the higher of
(a) and (b) below.
(a) Amount of money calculated by subtracting interest calculated at
long-term prime rate from the prepayment date to the original
maturity date from the rate agreed upon between the parties
calculated during the same period.
(b) Amount comparable to 2% of prepayment amount.
ARTICLE 3 COLLATERAL
Upon the request of Lender, Borrower shall provide to Lender collateral or
security to guarantee all obligations arising under this Agreement, supply
a joint guarantor approved by Lender, or supplement the security.
ARTICLE 4 DUTY TO NOTIFY
Borrower shall inform Lender prior to pledging current or future
collateral to any other creditor than Lender once this Agreement has been
executed.
ARTICLE 5 REPAYMENT ACCELERATION
1. Notwithstanding any notice from Lender, Borrower shall immediately
repay its financial obligations in full and shall forfeit all interest
paid to Lender in consideration of its obligations to Lender in the
event that any of the following occur.
a) Borrower stops repayment;
b) Borrower commences procedures for bankruptcy, recomposition,
restructuring, reorganization, or liquidation;
c) Stop payment received from check clearing institution;
d) Borrower's location is unknown.
2. Upon notice from Lender, Borrower shall immediately repay its
financial obligations in full and shall forfeit all interest paid to
Lender in consideration of its obligations to Lender in the event of
any of the following:
a) Failure to pay the principal or interest required by Article 1 of
this Agreement;
b) In addition to the preceding events, any violation of this
Agreement, supplemental agreement, or any agreement concerning the
collateral offered by Borrower; c) Petition of seizure, temporary
impoundment, injunction, or disposition;
d) Tax delinquency proceedings have been initiated by any tax
authority;
e) Lender has deemed it necessary to protect its rights.
3. In the event that any of the items in 5.1 or 5.2 apply to the party
providing collateral for this loan, upon the request of Lender,
Borrower shall immediately repay its financial obligation in full, and
shall forfeit all interest paid to Lender in consideration of its
obligations arising under the Agreement.
ARTICLE 6 OFFSET
1. When the loan matures, or the payment of the interest is accelerated,
or any other reason arises requiring Borrower to satisfy its
obligations under this Agreement, Lender may at any time offset any
claim of Borrower or any Guarantor notwithstanding the maturity of
such claim.
2. In the event Borrower commences procedures for bankruptcy,
recomposition, restructuring, reorganization, liquidation, or any
other special measure, Lender may cancel any insurance agreements
between Lender and Borrower without Borrower's consent, and may offset
any proceeds arising from the cancellation of the insurance against
the outstanding balance of the loan. However, if any outstanding loan
is based on the insurance agreement, the proceeds shall first be
applied to the loan based on the insurance agreement and the remainder
may be offset.
<PAGE>
3. In the event that Lender elects to offset the debt pursuant to Article
6.1 or 6.2, the interest, principal and the proceeds from cancellation
of the insurance shall be calculated up until the offset date.
ARTICLE 7 SUMS NOT DISBURSED
In the event that the loan has yet to be disbursed in its entirety
pursuant to Article 1 and any event specified in Article 5 occurs,
Borrower shall lose all rights associated with any sums not yet disbursed
regardless of the provisions in Article 1.
ARTICLE 8 NON-ASSIGNABILITY
Borrower may not transfer or pledge as collateral any value or right
arising under this Agreement.
ARTICLE 9 PENALTY
When Borrower fails to pay the principal or interest amounts pursuant to
Article 1 of this Agreement, or when the loan becomes due according to
Article 5, Borrower shall pay a penalty on the outstanding loan amount
starting from the date following the scheduled repayment date at a yearly
rate of 14%. For calculation purposes, a year shall consist of 365 days.
ARTICLE 10 PROMISSORY NOTE
In the event that Lender deems it necessary to guarantee the repayment
obligations arising under this Agreement, upon the request of Lender,
Borrower shall provide a promissory note acceptable to the Lender.
ARTICLE 11 LIABILITY AND INDEMNITY
1. In the event that Lender suffers any loss, harm, or injury due to the
loss or destruction of any document or note due to such unforeseen
circumstance as a disaster, accident, or shipping mishap, Borrower
shall honor its obligation based on the Lender's books and records.
Moreover, upon the request of Lender, Borrower shall immediately
provide Lender with a copy of such document or note. In the event of
injury caused thereby, Borrower shall not seek damages against Lender.
2. In the event that Lender has transacted business confirming with
reasonable care that the signatures and seals on Borrower's
documentation or note are correct, Borrower shall bear all liabilities
arising from the forgery, alteration, or other incident associated
with such documents, notes, or writings, and assume all responsibility
for the content of such documents and notes.
ARTICLE 12 BUSINESS CHANGES
1. Borrower shall immediately notify Lender of any changes to its
business such as any change in registered seal, corporate name,
trademark, officers, officer or other reportable change.
2. When Borrower fails to provide notice in accordance with Article 12.1,
and when any notice or documentation sent by Lender to Borrower is
delayed or returned due to such failure, notice shall be deemed as
received in its normal course.
ARTICLE 13 FINANCIAL REPORT AND INSPECTION
1. Borrower shall provide Lender with a sales report, balance sheet, cash
flow statement, interest payment ledger and detailed financial
statements at the end of each fiscal year without delay.
2. In addition to the above documents, Lender may request production or
inspection by a third party concerning Borrower's financial condition
and any other business matters deemed necessary by Lender.
3. When the provisions of Article 13.2 are employed, Borrower shall be
obliged to reimburse Lender all necessary costs related to the
inspection of records.
ARTICLE 14 MATERIAL CHANGE
Borrower shall immediately notify and receive Lender's prior consent when
it intends to make any material changes to its business including a
merger, acquisition, transfer of operations, or other business operation
change.
<PAGE>
ARTICLE 15 REPAYMENT ORDER
When the payment of principal, interest, or repayment of any other
obligation is offset pursuant to Article 6, and the proceeds do not
completely satisfy the outstanding balance, Lender may select the order of
repayment of Borrower's obligations at its sole discretion.
ARTICLE 16 EXPENSES
Borrower shall bear all expenses necessary for the creation of this
Agreement, the execution of other agreements, performance of such
agreements, and the means of enabling Lender to exercise its rights in
connection with this Agreement.
ARTICLE 17 NOTARIZED INSTRUMENT
Up the request of Lender at any time, Borrower acknowledges that it shall
prepare a notarized instrument containing language that Borrower accepts
compulsory execution of this Agreement.
ARTICLE 18 JURISDICTION
The court of jurisdiction for litigation concerning this Agreement shall
be the court with jurisdiction over Lender's head office.
One copy of this document has been created as a testament of this Agreement.
This copy will be maintained by Lender once Lender and Borrower have affixed
their corporate seals hereupon.
EXHIBIT 99 (b)(5)
[Pursuant to Rule 306 of Regulation S-T, on behalf of Ferrotec
Corporation, I hereby represent that the following is a fair and accurate
English translation of the loan agreement originally written in Japanese.
FERROTEC CORPORATION
By: /s/ Akira Yamamura
-----------------------------------
Name: Akira Yamamura
Title: President]
[Stamp]
LOAN AGREEMENT
(Principal/interest - General)
November 19, 1999
To: Kitanihon Bank Borrower: Ferrotech, Inc. [COMPANY SEAL]
5-24-8 Higashi-Ueno, Higashi-ku, Tokyo
Akira Yamamura, Representative Director
Guarantor: [Name]
---------------------------------------
[Address]
---------------------------------------
Borrower, in acknowledgement of the provisions set forth herein and the
additional terms and conditions contained in the separate Bank Transaction
Agreement, has borrowed and received the proceeds of the loan described herein
from Kitanihon Bank (hereinafter referred to as "Bank").
SECTION I LOAN TERMS
<TABLE>
<S> <C>
1. Amount (Y)100,000,000
2. Interest Rate 2.375% annually (calculated with one year comprising 365 days)
Interest formula o Variable rate a. Basic interest rate specified in Article 5.1.....1.875% annually
b. Margin...........................................0.5% annually
/ / Fixed rate As prescribed in Article 5.2, will not change in principle.
3. Repayment o Lump sum
/ / Installment disbursement. Additional agreement attached for
installment disbursement First payment of ___________________ was
received on _____________.
</TABLE>
- --------------------------------------------------------------------------------
For Bank Use Only
1 Deliver a copy of this Agreement to the Borrower.
2 When there are multiple guarantors, write "As specified in attachment" on
the Guarantor line, and attach a supplemental guarantor form.
3 When the variable interest method is used, attach a separate Agreement
Concerning Variable Interest except when long-term rate is used.
4 Write the amount of the money loaned in Japanese kanji characters. Do not
correct.
5 When installment disbursement option is selected, attach the Special
Disbursement Agreement.
6 When disbursements are released in installments, issue a receipt for the
disbursed funds.
7 Installment disbursements and repayments are treated as exceptions.
8 In the event that attachments are used, all related parties shall place
their seals on all attachments.
10 Mark the item selected with a o mark.
1
<PAGE>
<TABLE>
<S> <C>
4. Final Repayment Date November 30, 2004
5. Loan Purpose ---------
6. Account for Deposit Loan will be deposited into the following bank account in Borrower's name.
TOKYO BRANCH Current Account No. 1625401
7. Deferment Term / / No deferment.
(Place o in o Repayment of principal will be deferred until May 30, 2000.
appropriate / /)
8. Repayment of Principal and Interest
(a) Repayment of Principal
Every six months
[CORPORATE SEAL] Ten (10) payments of (Y)10,000,000
shall be made on the last day of the
appropriate month beginning on May 31, 2000
and ending on November 30, 2004.
(b) Repayment of Interest
1 The scheduled payment date for loan interest shall be the
31st day of the month every 3 months.
2 The first loan interest payment required by the Agreement
shall be calculated from the loan date to the interest
payment date. The second and all subsequent interest
payments shall consist of prepaid interest calculated from
the day following the interest payment to the subsequent
interest payment date.
(c) Principal and interest shall be repaid by automatically debiting
the following account held in Borrower's name. Such debiting does
not include payments of the financial obligation set forth in the
Agreement where such payment must conform with the provisions set
forth in the Bank Transaction Agreement.
TOKYO BRANCH Current Account No. 1625401
9. Penalty When Borrower fails to repay principal or interest in a timely
manner, Borrower shall pay a late fee penalty calculated at an annual rate
of 14% (one year calculated as 366 days).
10. Processing Fees
In the event that Borrower desires to reduce the fixed
interest rate selected in subsection 2 above, Borrower shall
pay a processing fee to the Bank.
</TABLE>
2
<PAGE>
SECTION II. STIPULATIONS
ARTICLE 1 BANK TRANSACTION AGREEMENT
Borrower acknowledges that all of the terms in the Bank Transaction
Agreement apply to the terms contained herein this Agreement.
ARTICLE 2 SPECIAL DISBURSEMENT AGREEMENT
1. In the event of changes in the financial market condition or other
similar happening, Borrower acknowledges that the financing term may
be lengthened, or that any future loan disbursement may be aborted or
stopped.
2. When the loan becomes due and payable according to the provisions of
the Bank Transaction Agreement, this Agreement shall be terminated,
and Borrower shall immediately repay the outstanding loan and forfeit
all interest paid on the loan disbursements.
ARTICLE 3 REPAYMENT
The principal and interest due pursuant to this Agreement shall be paid in
accordance with Section 1.8.
ARTICLE 4 DEBITING BORROWER'S ACCOUNT
1. Borrower shall deposit sufficient funds for repayment of principal and
interest as delineated in Section 1.8 in the bank account specified
for repayment prior to each scheduled repayment date (the business day
following the scheduled payment date if such date falls on a bank
holiday).
2. Bank shall withdraw each principal and interest payment from
Borrower's savings account on each scheduled date without using any
withdrawal slip, statement passbook, note, or check. In the event that
Borrower's account lacks sufficient funds, Bank shall not debit the
Borrower's account and payment shall be deemed untimely.
3. Borrower shall make interest payments as delineated in Article 4.1 and
4.2 during the loan disbursement and deferment periods.
4. In the event that Borrower fails to timely deposit sufficient funds
for payment of principal or interest in accordance with Article 4.1,
Bank shall debit the penalty together with the principal or interest
payment amount in the manner specified in Article 4.2.
ARTICLE 5 INTEREST RATE CHANGE
1. In the event that the loan is based on a variable interest rate, the
interest rate shall be determined as follows:
a) The interest rate specified in Section 1.8 shall serve as the loan
interest rate, however when the long term financing interest rate
(hereinafter referred to as "base rate"), which moves in
correlation with the bank short term prime rate, fluctuates, the
loan interest rate shall increase or decrease in accordance with
the base rate fluctuation.
b) In addition, if the base rate or bank short term prime rate is
ever abolished or any other comparable action is taken, the
interest rate shall be determined according to generally
acceptable practices.
c) The new interest rate shall be applied to the loan beginning from
the day immediately following the next scheduled payment.
2. In the event that loan is based on a fixed interest rate, and such
rate is altered, the interest rate shall be determined as follows:
a) The loan interest rate shall be the rate delineated in Section 1.2
when the fixed interest rate option is selected in the same
section. However, in the event that the financial market
conditions change or some similar event occurs, Bank may change
the interest rate in Section 1.2 to similar degree.
b) When Bank makes such change, Borrower shall be provided with prior
notice.
c) The new interest rate shall be applied to the loan beginning from
the day immediately following the next scheduled payment.
ARTICLE 6 TRANSFER OF RIGHTS
1. Borrower shall consent to any future conveyance by Bank of the
financial rights arising under this Agreement to any other financial
organization through any security instrument, and to any reconveyance
of such rights to Bank. Notice of any conveyance is hereby provided to
Borrower.
3
<PAGE>
2. In the event that such rights are conveyed under Article 6.1, Bank
shall serve as the agent of the conveyee in relation to the rights
transferred.
Borrower shall tender principal and interest payments in accordance with
the method specified herein or by Bank in the future, and Bank shall grant
such rights to conveyee.
ARTICLE 7 PERSONAL CREDIT RECORDING
1. When Borrower is an individual, Borrower acknowledges that objective
facts concerning the loan such as the loan amount, loan date, and
maturity date arising from this Agreement shall be registered with the
Personal Credit Information Center during the loan term and five years
from the date of final satisfaction of this Agreement, and that the
Center, its directors, and members supplying information to the Center
may use such information for their own transactions.
2. When any of the following incidents occur, Borrower acknowledges that
facts concerning each incident will be recorded and used in accordance
with the provisions of Article 7.1 for the period prescribed
hereunder:
(a) Five years for late payment or payment of penalties related to
obligations arising under this Agreement.
(b) Five years from the actual incident for payment to Bank from a
third party such as a Guarantor or insurer, or for Bank
instituted compulsory collection proceedings such as offset or
repossession of collateral.
ARTICLE 8 EXPENSES
Borrower shall bear the following expenses.
1. All expenses related to the creation of this Agreement.
2. Expenses concerning any mortgage or the recording of any deletion or
change.
3. Expenses concerning the inspection, collection, or disposition of
collateral.
4. Expenses concerning the exercise or preservation of rights related to
the Borrower or any Guarantor.
ARTICLE 9 BANK ACCOUNT DEBITING FOR EXPENSES
Borrower acknowledges that Bank may debit Borrower's account for guarantee
fees charged by the Trust and Guarantee Association, other guarantee fees,
recording expenses, filing fees, and all other expenses related to this
Agreement in accordance with the provisions set forth in Article 4 in
order to preserve the rights of Bank arising under this Agreement with
Borrower.
ARTICLE 10 JURISDICTION
In the event that litigation necessarily arises from the transaction
encompassed in this Agreement, it is agreed that those courts having
jurisdiction over the Bank's head office or branch related to this
transaction shall be the court of jurisdiction.
GUARANTEE
1. Guarantor shall jointly guarantee and bear all obligations of Borrower in
relation to Bank arising under this Agreement, and shall tender
performance of this Agreement and the terms of the appended Bank
Transaction Agreement.
2. Guarantor shall not offset any deposits in Borrower's bank or any other
obligations.
3. Guarantor shall not assert any claims against Bank if Bank determines to
substitute or release any collateral.
4. In the event that Guarantor performs its guarantee obligations under this
Agreement, or where obligations remain under the Agreement between Bank
and Borrower or any other guarantee agreement between Bank and Guarantor,
Guarantor shall not use any rights obtained from Bank in their
relationship without Bank's consent. Upon the request of Bank, Guarantor
shall transfer such rights or value to Bank without cost.
5. In the event that Guarantor has guaranteed another transaction between
Bank and Borrower, such guarantee shall not be altered by this Agreement.
Also, in the event that Guarantor has guaranteed another sum, the sum
guaranteed under this Agreement shall be added to such sum. Any other
guarantee in the future by Guarantor concerning a transaction between
Borrower and Bank shall be treated in an identical manner.
4
