<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended May 31, 1997 Commission File Number 0-12353
PLASMA-THERM, INC.
-------------------
(Exact name of registrant as specified in its charter)
FLORIDA 04-2554632
------- ----------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
10050 16TH STREET NORTH, ST. PETERSBURG, FLORIDA 33716
------------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (813) 577-4999
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, par value $.01 per share 11,003,061
-------------------------------------- ----------------------------
Class Outstanding at June 12, 1997
Page 1 of 17 Pages
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
PART 1. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Balance Sheets - May 31, 1997 and
November 30, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Income - Three Months and Six Months Ended
May 31, 1997 and May 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Statements of Cash Flows - Six Months Ended
May 31, 1997 and May 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
PART II. OTHER INFORMATION
Item 4 Submission of Matters to a Vote of Security-Holders . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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<PAGE> 3
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MAY 31, NOVEMBER 30,
ASSETS 1997 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 6,063,010 $ 5,266,279
Accounts receivable 9,463,705 8,046,130
Prepaid income taxes 159,073 94,233
Inventories 9,474,902 7,958,620
Prepaid expenses and other 387,379 232,650
Deferred tax asset 388,222 388,313
----------- -----------
Total current assets 25,936,291 21,986,225
----------- -----------
Property, plant and equipment
Building 4,444,649 4,394,649
Machinery and equipment 6,521,880 6,026,387
Leasehold improvements 144,815 142,915
----------- -----------
11,111,344 10,563,951
Less accumulated depreciation and
amortization 3,000,091 2,155,143
----------- -----------
8,111,253 8,408,808
Land 786,017 786,017
----------- -----------
8,897,270 9,194,825
----------- -----------
Other assets 287,927 294,126
----------- -----------
$35,121,488 $31,475,176
=========== ===========
</TABLE>
See accompanying notes to these consolidated financial statements.
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<PAGE> 4
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MAY 31, NOVEMBER 30,
LIABILITIES 1997 1996
---------- -----------
<S> <C> <C>
Current liabilities
Short-term borrowings $ - $ 1,000,000
Current portion of notes payable 622,154 443,946
Current maturities of obligations under
capital leases 85,192 80,955
Accounts payable 3,100,433 2,223,826
Accrued payroll and related 641,756 676,674
Accrued expenses 361,010 414,094
Accrued warranty reserve 640,000 610,000
Income taxes payable - -
Customer deposits 225,840 218,000
----------- -----------
Total current liabilities 5,676,385 5,667,495
----------- -----------
Long-term obligations
Notes payable 3,949,647 3,431,475
Obligations under capital leases 113,786 157,519
----------- -----------
4,063,433 3,588,994
----------- -----------
SHAREHOLDERS' EQUITY
Shareholders' equity
Common stock
$.01 par value
Authorized - 25,000,000 shares
Issued and outstanding - 11,003,061
shares - 1997 and 10,396,061 shares -
1996 110,032 103,962
Additional paid-in capital 16,057,223 14,897,446
Retained earnings 9,214,415 7,217,279
------------ -----------
25,381,670 22,218,687
----------- -----------
$35,121,488 $31,475,176
=========== ===========
</TABLE>
See accompanying notes to these consolidated financial statements.
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<PAGE> 5
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MAY 31, MAY 31,
------------------------- -------------------------
1997 1996 1997 1996
------------ ---------- ----------- ------------
<S> <C> <C> <C> <C>
Net sales $10,241,534 $9,491,798 $19,722,114 $17,781,800
----------- ---------- ----------- -----------
Costs and expenses
Cost of products sold 5,826,751 5,836,730 11,539,714 11,125,035
Research and development 903,086 716,253 1,695,635 1,335,576
Selling and administrative 1,684,742 1,451,217 3,250,706 2,789,653
Interest expense 82,063 49,933 184,737 108,150
Interest and capital gain income (100,680) (63,598) (182,223) (135,204)
Other expense, net 19,960 23,681 29,050 24,359
----------- ---------- ----------- -----------
8,415,922 8,014,216 16,517,619 15,247,569
----------- ---------- ----------- -----------
Income before income taxes 1,825,612 1,477,582 3,204,495 2,534,231
Income taxes 660,136 584,716 1,207,359 995,806
----------- ---------- ----------- -----------
Net income $ 1,165,476 $ 892,866 $ 1,997,136 $ 1,538,425
============ ========== =========== ===========
Income per share
(primary and fully diluted) $ 0.10 $ 0.08 $ 0.18 $ 0.14
============ ========== =========== ===========
</TABLE>
See accompanying notes to these consolidated financial statements.
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<PAGE> 6
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31,
-----------------------------
1997 1996
----------- ----------
<S> <C> <C>
Cash flows from operating activities
Net income $1,997,136 $1,538,425
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 859,948 334,230
Loss on disposal of assets - 23,681
Deferred taxes 91 337,698
Compensation - stock options 4,550 28,890
Changes in assets and liabilities
(Increase) decrease in accounts receivable (1,417,575) 751,264
Increase in income tax deposits (64,840) (40,039)
Increase in inventories (1,516,282) (1,666,950)
Increase in prepaid expenses and other (154,729) (517,320)
Increase (decrease) in accounts payable 876,607 (613,092)
Increase (decrease) in accrued payroll and
related (34,918) 38,012
Increase in accrued expenses (53,084) (162,800)
Increase in accrued warranty reserve 30,000 -
Increase (decrease) in income taxes payable
(exclusive of tax benefits derived from
exercise of options/warrants) 198,427 (5,152)
Increase in customer deposits 7,840 -
---------- -----------
Net cash provided by
operating activities 733,171 46,847
---------- -----------
Cash flows from investing activities
Capital expenditures (547,393) (2,848,536)
Payments received on note receivable - 30,000
Proceeds from sale of assets - 2,500
Other (8,801) 31,359
---------- -----------
Net cash used in investing
activities (556,194) (2,784,677)
---------- -----------
</TABLE>
See accompanying notes to these consolidated financial statements.
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<PAGE> 7
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31,
----------------------------
1997 1996
---------- ------------
<S> <C> <C>
Cash flows from financing activities
Proceeds from issuance of notes payable 1,000,000 2,922,981
Principal payments on notes payable (303,620) (203,357)
Principal payments under capital lease
obligations (39,496) (35,620)
Net issuances under line of credit agreements (1,000,000) -
Proceeds from exercise of stock options and
warrants 962,870 36,920
---------- ----------
Net cash provided by
financing activities 619,754 2,720,924
---------- ----------
Net increase (decrease) in cash and
cash equivalents 796,731 (16,906)
---------- ----------
Cash and cash equivalents, beginning of period 5,266,279 5,058,718
---------- ----------
Cash and cash equivalents, end of period $6,063,010 $5,041,812
========== ==========
</TABLE>
See accompanying notes to these consolidated financial statements.
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<PAGE> 8
PLASMA-THERM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 1997 AND NOVEMBER 30, 1996
(UNAUDITED)
NOTE 1 BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of only normal recurring adjustments) necessary to
present fairly the financial position as of May 31, 1997 and
November 30, 1996 and the results of operations and cash flows
for the six months ended May 31, 1997 and 1996.
The results of operations for the six months ended May 31,
1997 and 1996 are not necessarily indicative of results for
the full year.
The November 30, 1996 balance sheet amounts and disclosures
included herein have been derived from the November 30, 1996
audited financial statements of the Registrant. While the
Company believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that
these consolidated financial statements be read in conjunction
with the consolidated financial statements and the notes
included in the Company's latest annual report on Form 10-K.
NOTE 2 PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of
Plasma-Therm, Inc. and its wholly-owned subsidiary, Magnetran
Inc. All significant intercompany transactions and balances
have been eliminated.
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<PAGE> 9
NOTE 3 INCOME PER SHARE
Earnings per share is computed based on the weighted average
number of shares of common stock adjusted for the conversion
of dilutive common stock equivalents. The primary and fully
diluted income per share are the same for all periods
presented. The following is the weighted average outstanding
share information.
<TABLE>
<CAPTION>
Three Months Ended May 31,
1997 1996
--------------- ---------------
<S> <C> <C>
Primary 11,172,167 10,707,415
Fully Diluted 11,263,204 10,799,427
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended May 31,
1997 1996
--------------- ---------------
<S> <C> <C>
Primary 11,061,669 10,660,692
Fully Diluted 11,156,499 10,796,479
</TABLE>
NOTE 4 SHORT-TERM AND LONG-TERM BORROWINGS
In April, 1997 the Company increased its existing line of credit with
its bank from $3,000,000 to $7,000,000. The term of the line of
credit agreement is through April, 1998. Interest is payable monthly
at the one month LIBOR rate plus 2% (7.69% at May 31, 1997). The line
is collateralized by accounts receivable.
In April, 1997 the Company executed a $1,000,000 term loan with its
bank. The loan is payable in monthly installments of $27,778 plus
interest at the one month LIBOR rate plus 2.25% (7.94% at May 31,
1997) through April 2000. The note is secured by various research and
development equipment.
The line of credit and term loan are cross-collateralized, and the
bank has a security interest in the proceeds for the collection of
accounts receivable and the Company's depository accounts. The
agreements include financial covenants relating to the Company's
operating performance and financial condition. In addition, a
negative pledge agreement was executed which does not permit the
Company to hold a lien or encumbrance on its inventory.
NOTE 5 1995 STOCK INCENTIVE PLAN
In May 1997 the Company's shareholders approved amendments to its 1995
Stock Incentive Plan, increasing the available shares of Common Stock
for issuance under the plan by 1,500,000 shares; increasing the maximum
number of shares or Common Stock for which options may be granted under
the plan during any fiscal year to each optionee to 500,000 shares; and
permitting members
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<PAGE> 10
of the stock option committee to receive discretionary, as well as
formula, option grants and awards under the plan.
NOTE 6 NEW ACCOUNTING PRONOUNCEMENT
The FASB has issued Statement of Financial Accounting Standards No.
128, Earnings Per Share, which is effective for financial statements
issued after December 15, 1997. Early adoption of the new standard is
not permitted. The new standard eliminates primary and fully diluted
earnings per share and requires presentation of basic and diluted
earnings per share together with disclosure of how the per share
amounts were computed. The adoption of this new standard is not
expected to have a material impact on the disclosure of earnings per
share in the financial statements.
-10-
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales of $10,241,534 for the second quarter of 1997 increased by 8%
from net sales of $9,491,798 for the second quarter of 1996. For the first
half of 1997, the Company reported net sales of $19,722,114, which was 11%
higher than net sales of $17,781,800 for the first half of 1996. The increase
in net sales for both the second quarter and first half was attributable to
higher product demand and sales of the Company's newest products, the
Versalock(R) 700 Series and the Shuttlelock(R) ICP Series. Sales of the
Versalock(R) 700 Series began in the fourth quarter of 1995 while sales of the
Shuttlelock(R) ICP Series began in fiscal 1996. Total sales related to these
products in the second quarter of 1997 and 1996 were $6,054,234 (59% of net
sales) and $3,763,750 (40% of net sales), respectively. Total sales related to
these products in the first half of 1997 and 1996 were $11,113,934 (56% of net
sales) and $7,375,322 (41% of net sales), respectively.
Cost of products sold of $5,826,751 for the second quarter of 1997 was
56.9% of net sales, compared to $5,836,730 for the second quarter of 1996 which
was 61.5% of net sales. Cost of products sold of $11,539,714 for the first
half of 1997 was 58.5% of net sales, compared to $11,125,035 for the first half
of 1996 which was 62.6% of net sales. The decrease in cost of products sold as
a percentage of net sales for the second quarter and first half of 1997 was due
to increased sales of the new product lnes described in the previous paragraph
which have higher margins than the Company's other product lines.
Research and development expense for the second quarter of 1997 and
1996 was $903,086 and $716,253, respectively, which was 8.8% and 7.5% of net
sales, respectively. Research and development expense for the first half of
1997 and 1996 was $1,695,635 and $1,335,576, respectively, which was 8.6% and
7.5% of net sales, respectively. In 1997 several research and development
programs have been implemented to enhance development efforts in the Company's
target markets. In addition, as new products and technology continue to be
introduced, total dollars expended on research and development are expected to
increase.
Selling and administrative expense was $1,684,742 for the second quarter
of 1997, up from $1,451,217 for the second quarter of 1996 which was 16.5% and
15.3% of net sales, respectively. Selling and administrative expense for the
first six months of 1997 was $3,250,706, up from $2,789,653 for the first six
months of 1996 which was 16.5% and 15.7% of net sales, respectively. The
increases in selling and administrative expense as a percentage of net sales for
the second quarter and first six months of 1997 relate primarily to the
marketing initiatives in the second quarter of 1997 which have resulted in
higher expenditures associated with payroll, travel, conventions, and
advertising.
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<PAGE> 12
Income before income taxes for the second quarter of 1997 was
$1,825,612, an increase of $348,030 from $1,477,582 earned the second quarter of
1996. Net income per share was $.10 for the second quarter of 1997, an increase
of $.02 from $.08 for the second quarter of 1996. Income before income taxes
for the first half of 1997 was $3,204,495, an increase of $670,264 from
$2,534,231 earned the first half of 1996. Net income per share was $.18 for the
first half of 1997, an increase of $.04 from $.14 for the first half of 1996.
The primary reasons for the increase for both the second quarter and first half
of 1997 relates to increased net sales with higher margins as described in the
previous paragraphs.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL REQUIREMENTS
Working capital at May 31, 1997 was $20,259,906 which is an increase of
$3,941,176 over $16,318,730 at November 30, 1996. Working capital in 1997
benefited from, among other things, funds provided by the Company's increased
earnings from its operations in the first half of 1997 which also allowed the
Company to completely pay off short term borrowings of $1,000,000. See the
following discussion of material changes in assets and liabilities from November
30, 1996 to May 31, 1997 which further supplements this commentary on working
capital.
Net cash provided by operating activities in the first half of 1997 was
$733,171. The increase of $733,171 consisted of various components, including
net income in the first half of 1997 of $1,997,136 increased by depreciation and
amortization (which are noncash expenses) totaling $859,948, an increase in
accounts receivable of ($1,417,575), an increase in inventories of ($1,516,282),
and an increase in accounts payable of $876,607. The 17.6% increase in accounts
receivable was primarily related to the timing of sales and related payments.
The 19.1% increase in inventories was primarily due to an increase in purchases
to meet increased shipment schedules for the second half of 1997. The Company's
backlog at May 31, 1997 was approximately $16 million, which is a 33% increase
over the backlog at November 30, 1996 of approximately $12,000,000; therefore, a
further increase in inventory is expected. The 39.4% increase in accounts
payable related primarily to an increase in inventory purchases described in the
previous sentence.
Net cash used in investing activities for the first half of 1997 was
$556,194. The Company incurred $547,393 in capital expenditures, of which
approximately $385,000 was for the construction and purchase of various lab
equipment to be used in research and development. The remaining expenditures of
approximately $162,000 relate primarily to the purchase of various production
and computer equipment.
Net cash provided by financing activities for the first half of 1997 was
$619,754. Cash used for financing activities included the principal repayment
of $343,116 of notes payable and capital lease obligations and the pay off of
the line of credit of $1,000,000. Cash provided by financing activities
included a $1,000,000 term loan to be used to purchase research and development
equipment (See Note 4 to the Consolidated Financial Statements). Additionally,
the Company received $962,870 from the exercise of stock options and warrants.
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<PAGE> 13
The Company has extensive ongoing capital requirements for research and
development, the repayment of debt, capital equipment and inventory. The
Company believes that its current cash reserves, together with the funds
available under its line of credit, should be sufficient to meet its capital
requirements for the immediate future.
FORWARD LOOKING INFORMATION
From time to time, the Company may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects, technological developments, new products, inventory, research and
development activities and expenditures and similar matters. The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. In order to comply with the terms of the safe
harbor, the Company notes that a variety of factors could cause the Company's
actual results and experience to differ materially from the anticipated results
or other expectations expressed in the Company's forward-looking statements.
The risks and uncertainties that may affect the operations, performance,
development and results of the Company's business include, but are not limited
to, the following:
The Company sells relatively expensive capital equipment, and, in any
given quarter or financial period, any one customer or any individual shipment
may represent a significant portion of revenue in that period. Therefore, a
delay or cancellation of that shipment could cause the Company to experience a
revenue or earnings shortfall for a given financial period.
The Company relies on distributors and representatives, which complement
its direct sales and service staff, to sell and service its products in various
geographic locations. Should these sales and service channels be rendered
ineffective, it could materially impact the Company's business. Some of the
Company's competitors have more extensive direct sales and service locations in
the Company's distributor's and representatives' channels, which could provide
these competitors with a competitive advantage in certain geographic areas.
The Company depends heavily on the success and growth of the high
technology marketplace. In particular, a slowdown in personal computer
consumption could cause a slowdown of disk drive production, resulting in lower
output of thin film heads, which could materially effect the Company's business.
The Company also relies on the health of the general semiconductor
equipment marketplace. A slowdown in semiconductor capital equipment purchases
could also affect the Company's business from time to time.
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<PAGE> 14
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
The Company held its Annual Meeting of Shareholders on May 6, 1997. At
the meeting, the shareholders voted on the election of directors and proposed
amendments to the Company's 1995 Stock Incentive Plan.
Three directors were elected to the Board of Directors of the Company,
to serve until the next annual meeting of shareholders and until their
successors are duly elected and qualified, for the terms of office expiring at
the next annual meeting of shareholders: Ronald H. Deferrari, Anastasios S.
Gianoplus and Lubek Jastrzebski. No other director's term of office continued
after the meeting. A total of 10,452,678 votes were cast for Mr. Deferrari; a
total of 10,452,578 votes were cast for Mr. Gianoplus, and a total of 10,448,778
votes were cast for Dr. Jastrzebski. A total of 42,663 votes were withheld with
respect to the election of Mr. Deferrari, a total of 42,763 votes were withheld
with respect to the election of Mr. Gianoplus, and a total of 46,563 votes were
withheld with respect to the election of Dr. Jastrzebski.
The amendments to the Company's 1995 Stock Incentive Plan, which were
submitted to a vote of shareholders, amended the plan to increase the available
shares of Common Stock for issuance under the plan by 1,500,000, to increase the
maximum number of shares of Common Stock for which options may be granted under
the plan during any fiscal year to each optionee to 500,000 shares and to permit
members of the Stock Option Committee to receive discretionary, as well as
formula, option grants and awards under the plan. The proposal to amend the
1995 Stock Incentive Plan was approved by a total of 4,652,893 votes in favor of
the proposal. There were a total of 1,002,028 votes against, 100,839
abstentions and 4,273,339 broker non-votes with respect to this vote.
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<PAGE> 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
4.8 The Company's 1995 Stock Incentive Plan, Amended and
Restated.
10.45 Loan Agreement dated April 18, 1997 between the
Company and NationsBank, N.A. (South) including
Credit Agreement, Security Agreement, Negative
Pledge Agreement, Third Amendment (to Amended and
Restated Revolving Credit Agreement) and First
Amendment (to Amended and Restated Security
Agreement), Term Promissory Note and Line of Credit
Note.
27. Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the second quarter of
fiscal 1997.
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<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PLASMA-THERM, INC.
Date: June 12, 1997 By: /s/ STACY WAGNER
--------------------------
Stacy Wagner
V.P. of Finance
Date: June 12, 1997 By: /s/ RONALD S. DEFERRARI
--------------------------
Ronald S. Deferrari
President, Chief Operating
Officer
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<PAGE> 17
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
4.8 The Company's 1995 Stock Incentive Plan, as Amended *
and Restated
10.45 Loan Agreement dated April 18, 1997 between the *
Company and NationsBank, N.A. (South) including
Credit Agreement, Security Agreement, Negative
Pledge Agreement, Third Amendment (to Amended and
Restated Revolving Credit Agreement) and First
Amendment (to Amended and Restated Security
Agreement), Term Promissory Note and Line of Credit Note
27. Financial Data Schedule (for SEC use only) *
* Filed electronically herewith.
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<PAGE> 1
EXHIBIT 4.8
PLASMA-THERM, INC.
1995 STOCK INCENTIVE PLAN
AS ADOPTED BY THE BOARD OF DIRECTORS
AND THE STOCK OPTION COMMITTEE
ON MARCH 17, 1995
AND AS AMENDED AND RESTATED EFFECTIVE AS OF MAY 6, 1997
1. Purpose. Plasma-Therm, Inc., a Florida corporation (the
"Company"), hereby amends and restates the Plasma-Therm, Inc. 1995 Stock
Incentive Plan (the "Plan"). The Plan is intended to recognize the
contributions made to the Company by employees (including employees who are
members of the Board of Directors) of the Company or any Affiliate, to provide
such persons with additional incentive to devote themselves to the future
success of the Company or an Affiliate, and to improve the ability of the
Company or an Affiliate to attract, retain, and motivate individuals upon whom
the Company's sustained growth and financial success depend, by providing such
persons with an opportunity to acquire or increase their proprietary interest
in the Company through receipt of rights to acquire the Company's Common Stock,
par value $.01 per Share (the "Common Stock") and through the transfer or
issuance of Common Stock. In addition, the Plan is intended as an additional
incentive to directors of the Company who are not employees of the Company or
an Affiliate to serve on the Board of Directors and to devote themselves to the
future success of the Company by providing them with an opportunity to acquire
or increase their proprietary interest in the Company through the receipt of
rights to acquire Common Stock. Furthermore, the Plan may be used to encourage
consultants and advisors of the Company to further the success of the Company.
2. Definitions. Unless the context clearly indicates otherwise,
the following terms shall have the following meanings:
(a) "Affiliate" means a corporation which is a parent
corporation or a subsidiary corporation with respect to the Company within the
meaning of Section 424(e) or (f) of the Code.
(b) "Award" shall mean a transfer of Common Stock made
pursuant to the terms of the Plan.
(c) "Award Agreement" shall mean the agreement between
the Company and a Grantee with respect to an Award made pursuant to the Plan.
(d) "Board of Directors" means the Board of Directors of
the Company.
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<PAGE> 2
(e) "Change of Control" shall have the meaning as set
forth in Section 10 of the Plan.
(f) "Code" means the Internal Revenue Code of 1986, as
amended.
(g) "Committee" shall have the meaning set forth in
Section 3 of the Plan.
(h) "Common Stock" shall have the meaning set forth in
Section 1 of the Plan.
(i) "Company" means Plasma-Therm, Inc., a Florida
corporation.
(j) "Disability" shall have the meaning set forth in
Section 22(e)(3) of the Code.
(k) "Employee" means an employee of the Company or an
Affiliate.
(l) "Fair Market Value" shall have the meaning set forth
in Subsection 8(b) of the Plan.
(m) "Grantee" shall mean a person to whom an Award has
been granted pursuant to the Plan.
(n) "ISO" means an Option granted under the Plan which is
intended to qualify as an "incentive stock option" within the meaning of
Section 422(b) of the Code.
(o) "Non-Employee Director" shall mean a member of the
Board of Directors of the Company who is a "non-employee director" as that term
is defined in paragraph (b)(3) of Rule 16b-3 [and an "outside director" as that
term is defined in Treasury Regulations Section 1.162-27 promulgated under the
Code].
(p) "Non-qualified Stock Option" means an Option granted
under the Plan which is not intended to qualify, or otherwise does not qualify,
as an "incentive stock option" within the meaning of Section 422(b) of the
Code.
(q) "Option" means either an ISO or a Non-qualified Stock
Option granted under the Plan.
(r) "Optionee" means a person to whom an Option has been
granted under the Plan, which Option has not been exercised and has not expired
or terminated.
(s) "Option Document" means the document described in
Section 8 or Section 9 of the Plan, as applicable, which sets forth the terms
and conditions of each grant of Options.
(t) "Option Price" means the price at which Shares may be
purchased upon exercise of an Option, as calculated pursuant to Subsection 8(b)
of the Plan.
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<PAGE> 3
(u) "Rule 16b-3" means Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended.
(v) "SAR" shall have the meaning set forth in Section 12
of the Plan.
(w) "Section 16 Officers" means any person who is an
"officer" within the meaning of Rule 16a-1(f) promulgated under the Securities
Exchange Act of 1934, as amended, or any successor rule.
(x) "Shares" means the shares of Common Stock of the
Company which are the subject of Options or granted as Awards under the Plan.
3. Administration of the Plan. The Board of Directors may
designate a committee or committees composed of two or more of directors, each
of whom is a Non-employee Director, to operate and administer the Plan with
respect to all or a designated portion of the participants. Any such committee
designated by the Board of Directors, and the Board of Directors itself in its
administrative capacity with respect to the Plan, is referred to as the
"Committee." With the exception of the timing of grants of Options, the price
at which Shares may be purchased, and the number of Shares covered by Options
granted to each member of the Committee, all of which shall be as specifically
set forth in Section 9, the other provisions set forth herein, as it pertains
to members of the Committee, may be administered by the Board of Directors.
(a) Meetings. The Committee shall hold meetings at such
times and places as it may determine, shall keep minutes of its meetings, and
shall adopt, amend and revoke such rules or procedures as it may deem proper;
provided, however, that it may take action only upon the agreement of a
majority of the whole Committee. Any action which the Committee shall take
through a written instrument signed by a majority of its members shall be as
effective as though it had been taken at a meeting duly called and held.
(b) Exculpation. No member of the Board of Directors
shall be personally liable for monetary damages for any action taken or any
failure to take any action in connection with the administration of the Plan or
the granting of Options or Awards under the Plan, provided that this Subsection
3(b) shall not apply to (i) any breach of such member's duty of loyalty to the
Company, an Affiliate, or the Company's stockholders, (ii) acts or omissions
not in good faith or involving intentional misconduct or a knowing violation of
law, (iii) acts or omissions that would result in liability under applicable
law, and (iv) any transaction from which the member derived an improper
personal benefit.
(c) Indemnification. Service on the Committee shall
constitute service as a member of the Board of Directors of the Company. Each
member of the Committee shall be entitled, without further act on his part, to
indemnity from the Company and limitation of liability to the fullest extent
provided by applicable law and by the Company's Articles of Incorporation
and/or By-law in connection with or arising out of any action, suit or
proceeding with respect to the administration of the Plan or the granting of
Options or Awards thereunder in which he or she may be involved by reason of
his or her being or having been a member of
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<PAGE> 4
the Committee, whether or not he or she continues to be such member of the
Committee at the time of the action, suit or proceeding.
(d) Interpretation. The Committee shall have the power
and authority to interpret the Plan and to adopt rules and regulations for its
administration that are not inconsistent with the express terms of the Plan.
Any such actions by the Committee shall be final, binding and conclusive on all
parties in interest.
4. Grants under the Plan. Grants under the Plan may be in the
form of a Non-qualified Stock Option, an ISO or a combination thereof, at the
discretion of the Committee.
5. Eligibility. All Employees, members of the Board of Directors
and consultants and advisors to the Company shall be eligible to receive
Options and Awards hereunder. Consultants and advisors shall be eligible only
if they render bona fide services to the Company unrelated to the offer or sale
of securities. The Committee, in its sole discretion, shall determine whether
an individual qualifies as an employee.
6. Shares Subject to Plan. The aggregate maximum number of Shares
for which Awards or Options may be granted pursuant to the Plan is 2,706,757
(including Options and Awards granted under the Plan prior to the effective
date of this amended and restated Plan), increased on November 30 of each year
from and including November 30, 1997 by a number of shares equal to one percent
(1%) of the number of shares of Common Stock outstanding on such date;
provided, however, that any such increase shall be made only to the extent that
the Company has sufficient authorized and unreserved Common Stock for such
purpose; and further provided that the maximum aggregate number of Shares to be
issued under the Plan shall not exceed 3,000,000. Such increase shall be made
each November 30, regardless of the number of shares remaining available for
issuance under the Plan on such date. The number of shares which may be issued
under the Plan shall be further subject to adjustment in accordance with
Section 11. The Shares shall be issued from authorized and unissued Common
Stock or Common Stock held in or hereafter acquired for the treasury of the
Company. If an Option terminates or expires without having been fully exercised
for any reason or if Shares subject to an Award have been conveyed back to the
Company pursuant to the terms of an Award Agreement, the Shares for which the
Option was not exercised or the Shares that were conveyed back to the Company
may again be the subject of one or more Options or Awards granted pursuant to
the Plan.
7. Term of the Plan. The Plan (as amended and restated herein) is
effective as of May 6, 1997, provided it is approved on or about such date by
the stockholders in the manner required by state law. If the Plan is not so
approved by the stockholders, this amended and restated Plan shall be null and
void and the Plan as in effect without regard to this amendment and restatement
shall continue in effect under its own terms. No ISO may be granted under the
Plan after March 16, 2005.
8. Option Documents and Terms. Each Option granted under the Plan
shall be a Non-qualified Stock Option unless the Option shall be specifically
designated at the time of grant to be an ISO for Federal income tax purposes.
If any Option designated an ISO is determined for any reason not to qualify as
an incentive stock option within the meaning of
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<PAGE> 5
Section 422 of the Code, such Option shall be treated as a Non-qualified Stock
Option for all purposes under the provisions of the Plan. Options granted
pursuant to the Plan shall be evidenced by the Option Documents in such form as
the Committee shall from time to time approve, which Option Documents shall
comply with and be subject to the following terms and conditions and such other
terms and conditions as the Committee shall from time to time require which are
not inconsistent with the terms of the Plan. However, the provisions of this
Section 8 shall not be applicable to Options granted to members of the
Committee, except as otherwise provided in Subsection 9(c).
(a) Number of Option Shares. Each Option Document shall
state the number of Shares to which it pertains. An Optionee may receive more
than one Option, which may include Options which are intended to be ISO's and
Options which are not intended to be ISO's, but only on the terms and subject
to the conditions and restrictions of the Plan. Notwithstanding anything herein
to the contrary, no Optionee shall be granted Options during one fiscal year of
the Company for more than Five Hundred Thousand (500,000) Shares (such number
to be subject to adjustment in accordance with Section 11).
(b) Option Price. Subject to the provisions of Section 9
hereof, each Option Document shall state the Option Price which, for a
Non-qualified Stock Option, may be less than, equal to, or greater than the
Fair Market Value of the Shares on the date the Option is granted and, for an
ISO, shall be at least 100% of the Fair Market Value of the Shares on the date
the Option is granted as determined by the Committee in accordance with this
Subsection 8(b); provided, however, that if an ISO is granted to an Optionee
who then owns, directly or by attribution under Section 424(d) of the Code,
shares possessing more than ten percent of the total combined voting power of
all classes of stock of the Company or an Affiliate, then the Option Price
shall be at least 110% of the Fair Market Value of the Shares on the date the
Option is granted. If the Common Stock is traded in a public market, then the
Fair Market Value per share shall be, if the Common Stock is listed on a
national securities exchange or included in the NASDAQ System, the last
reported sale price thereof on the relevant date, or, if the Common Stock is
not so listed or included, the mean between the last reported "bid" and "asked"
prices thereof on the relevant date, as reported on NASDAQ or, if not so
reported, as reported by the National Daily Quotation Bureau, Inc. or as
reported in a customary financial reporting service, as applicable and as the
Committee determines.
(c) Exercise. No Option shall be deemed to have been
exercised prior to the receipt by the Company of written notice of such
exercise and (unless arrangements satisfactory to the Company have been made
for payment through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board) of payment in full of the Option
Price for the Shares to be purchased. Each such notice shall specify the number
of Shares to be purchased and shall (unless the Shares are covered by a then
current registration statement or a Notification under Regulation A under the
Securities Act of 1933, as amended (the "Act")), contain the Optionee's
acknowledgment in form and substance satisfactory to the Company that (a) such
Shares are being purchased for investment and not for distribution or resale
(other than a distribution or resale which, in the opinion of counsel
satisfactory to the Company, may be made without violating the registration
provisions of the Act), (b) the Optionee has been advised and understands that
(i) the Shares have not been registered under the Act and are "restricted
securities" within the meaning of Rule 144 under the Act and are subject to
restrictions on transfer and (ii) the Company is under no obligation to
register the Shares under the Act or to take any action which would make
available to the Optionee any exemption from such registration, (c) such Shares
may not be transferred without compliance
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<PAGE> 6
with all applicable federal and state securities laws, and (d) an appropriate
legend referring to the foregoing restrictions on transfer and any other
restrictions imposed under the Option Documents may be endorsed on the
certificates. Notwithstanding the foregoing, if the Company determines that
issuance of Shares should be delayed pending (A) registration under federal or
state securities laws, (B) the receipt of an opinion of counsel satisfactory to
the Company that an appropriate exemption from such registration is available,
(C) the listing or inclusion of the Shares on any securities exchange or an
automated quotation system or (D) the consent or approval of any governmental
regulatory body whose consent or approval is necessary in connection with the
issuance of such Shares, the Company may defer exercise of any Option granted
hereunder until any of the events described in this sentence has occurred.
(d) Medium of Payment. Subject to the terms of the
applicable Option Document, an Optionee shall pay for Shares (i) in cash, (ii)
by certified or cashier's check payable to the order of the Company, or (iii)
by such other mode of payment as the Committee may approve, including payment
through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board. The Optionee may also exercise the Option in any manner
contemplated by Section 12. Furthermore, the Committee may provide in an
Option Document that payment may be made in whole or in part in shares of the
Company's Common Stock held by the Optionee. If payment is made in whole or in
part in shares of the Company's Common Stock, then the Optionee shall deliver
to the Company certificates registered in the name of such Optionee
representing the shares owned by such Optionee, free of all liens, claims and
encumbrances of every kind and having an aggregate Fair Market Value on the
date of delivery that is at least as great as the Option Price of the Shares
(or relevant portion thereof) with respect to which such Option is to be
exercised by the payment in shares of Common Stock, endorsed in blank or
accompanied by stock powers duly endorsed in blank by the Optionee. In the
event that certificates for shares of the Company's Common Stock delivered to
the Company represent a number of shares in excess of the number of shares
required to make payment for the Option Price of the Shares (or relevant
portion thereof) with respect to which such Option is to be exercised by
payment in shares of Common Stock, the stock certificate or certificates issued
to the Optionee shall represent (i) the Shares in respect of which payment is
made, and (ii) such excess number of shares. Notwithstanding the foregoing, the
Committee may impose from time to time such limitations and prohibitions on the
use of shares of the Common Stock to exercise an Option as it deems
appropriate.
(e) Termination of Options.
(i) No Option shall be exercisable after the
first to occur of the following:
(A) Expiration of the Option term
specified in the Option Document, which, in the case of an ISO, shall not occur
after (1) ten years from the date of grant, or (2) five years from the date of
grant if the Optionee on the date of grant owns, directly or by attribution
under Section 424(d) of the Code, shares possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or of
an Affiliate;
(B) Except to the extent otherwise
provided in an Optionee's Option Document, a finding by the Committee, after
full consideration of the facts presented on behalf of both the Company and the
Optionee, that the Optionee has been engaged in disloyalty to the Company or an
Affiliate, including, without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of his
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<PAGE> 7
employment or service, or has disclosed trade secrets or confidential
information of the Company or an Affiliate. In such event, in addition to
immediate termination of the Option, the Optionee shall automatically forfeit
all Shares for which the Company has not yet delivered the share certificates
upon refund by the Company of the Option Price. Notwithstanding anything herein
to the contrary, the Company may withhold delivery of share certificates
pending the resolution of any inquiry that could lead to a finding resulting in
a forfeiture;
(C) The date, if any, set by the Board
of Directors as an accelerated expiration date in the event of the liquidation
or dissolution of the Company; or
(D) The occurrence of such other event
or events as may be set forth in the Option Document as causing an accelerated
expiration of the Option.
(E) Except as otherwise set forth in the
Option Document and subject to the foregoing provisions of this Subsection
8(e), three months after the Optionee's employment or service with the Company
or its Affiliates terminates for any reason other than Disability or death or
one year after such termination due to Optionee's Disability or death. With
respect to this Subsections 8(e)(i)(E), the only Options that may be exercised
during the three-month or one-year period, as the case may be, are Options
which were exercisable on the last date of such employment or service and not
Options which, if the Optionee were still employed or rendering service during
such three-month or one-year period, would become exercisable, unless the
Option Document specifically provides to the contrary. The terms of an
executive severance agreement or other agreement between the Company and an
Optionee, approved by the Committee, whether entered into prior or subsequent
to the grant of an Option, which provide for Option exercise dates later than
those set forth in Subsection 8(e)(i) shall be deemed to be Option terms
approved by the Committee and consented to by the Optionee.
(ii) Notwithstanding the foregoing, the Committee
may extend the period during which all or any portion of an Option may be
exercised to a date no later than the Option term specified in the Option
Document pursuant to Subsection 8(e)(i)(A), provided that any change pursuant
to this Subsection 8(e)(ii) which would cause an ISO to become a Non-qualified
Stock Option may be made only with the consent of the Optionee.
(iii) Notwithstanding anything to the contrary
contained in the Plan or an Option Document, an ISO shall be treated as a
Non-qualified Stock Option to the extent such ISO is exercised at any time
after the expiration of the time period permitted under the Code for the
exercise of an ISO.
(f) Transfers. No Option granted under the Plan may be
transferred, except by will or by the laws of descent and distribution. During
the lifetime of the person to whom an Option is granted, such Option may be
exercised only by him. Notwithstanding the foregoing, an Option, other than an
ISO, shall be transferrable pursuant to a "qualified domestic relations order"
as defined in the Code and also shall be transferrable, without payment of
consideration, to (a) immediate family members of the holder (i.e. spouse or
former spouse, parents, issue, including adopted and "step" issue or siblings),
(b) trusts for the benefit of immediate family members, and (c) partnerships
whose only partners are such family members. Any transferee will be subject to
all of the conditions set forth in the Option prior to its transfer.
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<PAGE> 8
(g) Limitation on ISO Grants. To the extent that the
aggregate fair market value of the shares of Common Stock (determined at the
time the ISO is granted) with respect to which ISO's under all incentive stock
option plans of the Company or its Affiliates are exercisable for the first
time by the Optionee during any calendar year exceeds $100,000, such ISO's
shall, to the extent of such excess, be treated as Non-qualified Stock Options.
(h) Other Provisions. Subject to the provisions of the
Plan, the Option Documents shall contain such other provisions including,
without limitation, provisions authorizing the Committee to accelerate the
exercisability of all or any portion of an Option granted pursuant to the Plan,
additional restrictions upon the exercise of the Option or additional
limitations upon the term of the Option, as the Committee shall deem advisable.
(i) Amendment. Subject to the provisions of the Plan, the
Committee shall have the right to amend any Option Document or Award Agreement
issued to an Optionee or Award holder, subject to the Optionee's or Award
holder's consent if such amendment is not favorable to the Optionee or Award
holder, or if such amendment has the effect of changing an ISO to a
Non-Qualified Stock Option, except that the consent of the Optionee or Award
holder shall not be required for any amendment made pursuant to Subsection
8(e)(i)(C) or Section 10 of the Plan, as applicable.
9. Special Provisions Relating to Grants of Options to members of
the Committee. Options granted pursuant to the Plan to members of the Committee
shall be granted, without any further action by the Committee, in accordance
with the terms and conditions set forth in this Section 9. Options granted
pursuant to this Section 9 shall be evidenced by Option Documents in such form
as the Committee shall from time to time approve, which Option Documents shall
comply with and be subject to the following terms and conditions and such other
terms and conditions as the Committee shall from time to time require which are
not inconsistent with the terms of the Plan. Notwithstanding the foregoing, a
Committee member may elect not to receive a formula option grant (in which case
the Committee member will receive nothing in lieu thereof) and may also revoke
such election. In either case, the election or the revocation of the election
will be effective only for formula option grants that otherwise were scheduled
to be made after the date of the election.
(a) Timing of Grants; Number of Shares Subject of
Options; Exercisability of Options; Option Price. Each member of the Committee
shall be granted on each June 30 annually, commencing on June 30, 1995, an
Option to purchase Five Thousand (5,000) Shares (such number to be subject to
adjustment as provided in Section 11). Each such Option shall be a
Non-qualified Stock Option becoming exercisable with respect to (100%) of the
Shares covered thereby on the first anniversary of the date of grant and
expiring five years after the date of grant. The Option Price shall be equal
to 60% the Fair Market Value of the Shares on the date the Option is granted.
The Option shall permit any method of exercise permitted by Section 12.
(b) Termination of Options Granted Pursuant to Section 9.
All Options granted pursuant to this Section 9 shall be exercisable until the
first to occur of the following:
(i) Expiration of five (5) years from
the date of grant;
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<PAGE> 9
(ii) Expiration of three (3) months from
the date the Optionee's service as a director of the Company terminates for any
reason other than Disability or death; or
(iii) Expiration of one (1) year from the
date the Optionee's service as a director terminates due to the Optionee's
Disability or death.
(c) Applicability of Provisions of Section 8 to Options
Granted Pursuant to Section 9. The following provisions of Section 8 shall be
applicable to Options granted pursuant to this Section 9: Subsection
8(a)(provided that all Options granted pursuant to this Section 9 shall be
Non-qualified Stock Options); the last sentence of Subsection 8(b); Subsection
8(c); Subsection 8(d) (provided that Option Documents relating to Options
granted pursuant to this Section 9 shall provide that payment may be made in
whole or in part in shares of Company Common Stock); Subsection 8(f); and
Subsection 8(i).
10. Change of Control. Except as may be provided in an Option
Document (which will take precedence over the provisions of this Section 10),
in the event of a Change of Control, the Committee may take whatever actions it
deems necessary or desirable with respect to any of the Options outstanding
(other than Options granted pursuant to Section 9), which need not be treated
identically, including, without limitation, accelerating (a) the expiration or
termination date in the respective Option Documents to a date no earlier than
thirty (30) days after notice of such acceleration is given to the Optionees,
or (b) the exercisability of the Option. In the event of a Change of Control,
Options granted pursuant to Section 9 shall accelerate and become exercisable
immediately. Notwithstanding the foregoing, in the event of a Change of
Control, Options granted pursuant to the Plan will become automatically
exercisable in full but only with respect to those Optionees who, in the good
faith determination of the Board of Directors, are likely to have their
relationship with the Company or any Affiliate of the Company terminated
(including constructive termination through a significant decrease in
authority, responsibility or overall total compensation) as a result of such
Change of Control.
A "Change of Control" shall be deemed to have occurred upon
the earliest to occur of the following events:
(i) any "person," as such term is used in Sections 3(a)(9) and
13(d) of the Securities Exchange Act of 1934, other than Ronald H. Deferrari,
his children and/or their respective affiliates and their respective heirs,
executors, administrators and successors, becomes a "beneficial owner," as such
term is used in Rule 13d-3 promulgated under that act, of 50% or more of the
Company's Voting Stock;
(ii) individuals who are Incumbent Directors cease to constitute a
majority of the members of the Board of Directors ("Incumbent Directors" for
this purpose being the members of the Board of Directors on the date of
adoption of this Plan, provided that any person becoming a member of the Board
of Directors subsequent to such date whose election or nomination for election
was supported by two-thirds of the directors who then comprised the Incumbent
Directors shall be considered to be an Incumbent Director);
(iii) the Company adopts any plan of liquidation providing for the
distribution of all or substantially all of its assets;
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<PAGE> 10
(iv) all or substantially all of the business of the Company is
disposed of pursuant to a merger, consolidation or other transaction (unless
the stockholders of the Company immediately prior to such merger, consolidation
or other transaction beneficially own, directly or indirectly, in substantially
the same proportion as they owned the voting stock of the Company, all of the
voting stock or other ownership interests of the entity or entities, if any,
that succeed to the business of the Company);
(v) the Company combines with another company and is the surviving
corporation but, immediately after the combination, the stockholders of the
Company immediately prior to the combination hold, directly or indirectly, 50%
or less of the voting stock entitled to vote for the election of directors of
the combined company (there being excluded from the number of shares held by
such stockholders, but not from the voting stock of the combined company, any
shares received by "affiliates", as such term is defined in the rules of the
Securities and Exchange Commission, of such other company in exchange for stock
of such other company); or
(vi) a "change of control" as defined in the form of indenture
governing any indebtedness of the Company shall have occurred.
11. Adjustments on Changes in Capitalization.
(a) In the event that the outstanding Shares are changed
by reason of a reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination or exchange of shares and the
like (not including the issuance of Common Stock on the conversion of other
securities of the Company which are outstanding on the date of grant and which
are convertible into Common Stock) or dividends payable in Shares, an equitable
adjustment shall be made by the Committee in the aggregate number of shares
available under the Plan and in the number of Shares and price per Share
subject to outstanding Options. Unless the Committee makes other provisions for
the equitable settlement of outstanding options, if the Company shall be
reorganized, consolidated, or merged with another corporation, or if all or
substantially all of the assets of the Company shall be sold or exchanged, an
Optionee shall at the time of issuance of the stock under such corporate event
be entitled to receive upon the exercise of his or her Option the same number
and kind of shares of stock or the same amount of property, cash or securities
as he or she would have been entitled to receive upon the occurrence of any
such corporate event as if he or she had been, immediately prior to such event,
the holder of the number of shares covered by his or her Option.
(b) Any adjustment under this Section 11 in the number of
Shares subject to Options shall apply proportionately to only the unexercised
portion of any Option granted hereunder. If fractions of a Share would result
from any such adjustment, the adjustment shall be revised to the next lower
whole number of Shares.
(c) The Committee shall have authority to determine the
adjustments to be made under this Section, and any such determination by the
Committee shall be final, binding and conclusive.
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<PAGE> 11
12. Stock Appreciation Rights (SARs).
(a) In General. Subject to the terms and conditions of
the Plan, the Committee may, in its sole and absolute discretion, grant to an
Optionee the right to surrender an Option to the Company, in whole or in part,
and to receive in exchange therefor payment by the Company of an amount equal
to the excess of the fair market value of the shares of Common Stock subject to
such Option, or portion thereof, so surrendered (determined in the manner
described in section 8(b) as of the date the SARs are exercised) over the
exercise price to acquire such shares (which right shall be referred to as an
"SAR"). Except as may otherwise be provided in an Option Document, such
payment may be made, as determined by the Committee in accordance with
subsection 12(c) below and set forth in the Option Agreement, either in shares
of Common Stock or in cash or in any combination thereof. Notwithstanding
anything herein to the contrary, an Option granted to a member of the
Disinterested Directors Committee pursuant to Section 9 shall provide for SARs
and the Optionee shall have the right to determine the method of payment to the
Optionee.
(b) Grant. Each SAR shall relate to a specific Option
granted under the Plan and shall be granted to the Optionee concurrently with
the grant of such Option by inclusion of appropriate provisions in the Option
Agreement pertaining thereto. The number of SARs granted to an Optionee shall
not exceed the number of shares of Common Stock which such Optionee is entitled
to purchase pursuant to the related Option. The number of SARs held by an
Optionee shall be reduced by (i) the number of SARs exercised under the
provisions of the Option Agreement pertaining to the related Option, and (ii)
the number of shares of Common Stock purchased pursuant to the exercise of the
related Option.
(c) Payment. The Committee shall have sole discretion to
determine whether payment in respect of SARs granted to any Optionee shall be
made in shares of Common Stock, or in cash, or in a combination thereof, except
that the method of payment shall be determined solely by the Optionee of an
Option granted to a member of the Disinterested Directors Committee pursuant to
Section 9. If payment is made in Common Stock, the number of shares of Common
Stock which shall be issued pursuant to the exercise of SARs shall be
determined by dividing (i) the total number of SARs being exercised, multiplied
by the amount by which the Fair Market Value (as determined under section 8(b))
of a share of Common Stock on the exercise date exceeds the exercise price for
shares covered by the related Option, by (ii) the Fair Market Value of a share
of Common Stock on the exercise date of the SARs. No fractional share of Common
Stock shall be issued on exercise of an SAR; cash may be paid by the Company to
the individual exercising an SAR in lieu of any such fractional share. If
payment on exercise of an SAR is to be made in cash, the individual exercising
the SAR shall receive in respect of each share to which such exercise relates
an amount of money equal to the difference between the Fair Market Value of a
share of Common Stock on the exercise date and the exercise price for shares
covered by the related Option.
(d) Limitations. SARs shall be exercisable at such times
and under such terms and conditions as the Committee, in its sole and absolute
discretion, shall determine; provided, however, that an SAR may be exercised
only at such times and by such individuals as the related Option under the Plan
and the Option Agreement may be exercised.
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<PAGE> 12
13. Terms and Conditions of Awards. Awards granted pursuant to the
Plan shall be evidenced by written Award Agreements in such form as the
Committee shall from time to time approve, which Award Agreements shall comply
with and be subject to the following terms and conditions and such other terms
and conditions which the Committee shall from time to time require which are
not inconsistent with the terms of the Plan.
(a) Number of Shares. Each Award Agreement shall state
the number of shares of Common Stock to which it pertains.
(b) Purchase Price. Each Award Agreement shall specify
the purchase price, if any, which applies to the Award. If the Board specifies
a purchase price, the Grantee shall be required to make payment on or before
the date specified in the Award Agreement. A Grantee shall pay for Shares (i)
in cash, (ii) by certified check payable to the order of the Company, or (iii)
by such other mode of payment as the Committee may approve.
(c) Grant. In the case of an Award which provides for a
grant of Shares without any payment by the Grantee, the grant shall take place
on the date specified in the Award Agreement. In the case of an Award which
provides for a payment, the grant shall take place on the date the initial
payment is delivered to the Company, unless the Committee or the Award
Agreement otherwise specifies. Stock certificates evidencing Shares granted
pursuant to an Award shall be issued in the sole name of the Grantee.
Notwithstanding the foregoing, as a precondition to a grant, the Company may
require an acknowledgment by the Grantee as required with respect to Options
under Section 8.
(d) Conditions. The Committee may specify in an Award
Agreement any conditions under which the Grantee of that Award shall be
required to convey to the Company the Shares covered by the Award. Upon the
occurrence of any such specified condition, the Grantee shall forthwith
surrender and deliver to the Company the certificates evidencing such Shares as
well as completely executed instruments of conveyance. The Committee, in its
discretion, may provide that certificates for Shares transferred pursuant to an
Award be held in escrow by the Company or an officer of the Company until such
time as each and every condition has lapsed and that the Grantee be required,
as a condition of the Award, to deliver to such escrow agent or Company officer
stock powers covering the Award Shares duly endorsed by the Grantee. Unless
otherwise provided in the Award Agreement, distributions made on Shares held in
escrow will be deposited in escrow, to be distributed to the party becoming
entitled to the Shares on which the distribution was made. Stock certificates
evidencing Shares subject to conditions shall bear a legend to the effect that
the Common Stock evidenced thereby is subject to repurchase or conveyance to
the Company in accordance with an Award made under the Plan and that the Shares
may not be sold or otherwise transferred.
(e) Lapse of Conditions. Upon termination or lapse of
each and every forfeiture condition, the Company shall cause certificates
without the legend referring to the Company's repurchase right (but with any
other legends that may be appropriate) evidencing the Shares covered by the
Award to be issued to the Grantee upon the Grantee's surrender of the legended
certificates held by him to the Company.
(f) Rights as Stockholder. Upon payment of the purchase
price, if any, for Shares covered by an Award and compliance with the
acknowledgment requirement
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<PAGE> 13
of subsection 13(c), the Grantee shall have all of the rights of a stockholder
with respect to the Shares covered thereby, including the right to vote the
Shares and receive all dividends and other distributions paid or made with
respect thereto, except to the extent otherwise provided by the Committee or in
the Award Agreement.
14. Amendment of the Plan. The Board of Directors of the Company
may amend the Plan from time to time in such manner as it may deem advisable.
Nevertheless, the Board of Directors of the Company may not change the class of
individuals eligible to receive an ISO or increase the maximum number of shares
as to which Options may be granted without obtaining approval, within twelve
months before or after such action, by the stockholders in the manner required
by state law. In addition, the provisions of Section 9 that determine (i) which
directors shall be granted Options pursuant to Section 9; (ii) the amount of
Shares subject to Options granted pursuant to Section 9; (iii) the price at
which shares subject to Options granted pursuant to Section 9 may be purchased
and (iv) the timing of grants of Options pursuant to Section 9 shall not be
amended more than once every six months, other than to comport with changes in
the Code or the Employee Retirement Income Security Act of 1974, as amended. No
amendment to the Plan shall adversely affect any outstanding Option, however,
without the consent of the Optionee.
15. No Commitment to Retain. The grant of an Option or Award
pursuant to the Plan shall not be construed to imply or to constitute evidence
of any agreement, express or implied, on the part of the Company or any
Affiliate to retain the Optionee or Grantee as an employee, consultant or
advisor of the Company or any Affiliate, as a member of the Company's Board of
Directors or in any other capacity.
16. Withholding of Taxes. In connection with any event relating to
an Option or Award, the Company shall have the right to (a) require the
recipient to remit or otherwise make available to the Company an amount
sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery or transfer of any certificate or
certificates for such Shares or (b) take whatever other action it deems
necessary to protect its interests with respect to tax liabilities. The
Company's obligations under the Plan shall be conditioned on the Optionee's or
Grantee's compliance, to the Company's satisfaction, with any withholding
requirement.
17. Interpretation. The Plan is intended to enable transactions
under the Plan with respect to directors to satisfy the conditions of Rule
16b-3; to the extent that any provision of the Plan would cause a conflict with
such conditions or would cause the administration of the Plan as provided in
Section 3 to fail to satisfy the conditions of Rule 16b-3, such provision shall
be deemed null and void to the extent permitted by applicable law. This section
shall not be applicable if no class of the Company's equity securities is then
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended.
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<PAGE> 1
EXHIBIT 10.45
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Agreement"), is executed this 18th day of
April, 1997, by and between PLASMA-THERM, INC., a Florida corporation whose
address is 10050 16th Street North, St. Petersburg, Florida 33716 (hereinafter
called "Borrower") and NATIONSBANK, N.A. (SOUTH), a national banking
association whose address is 400 North Ashley Drive, 2nd Floor, Tampa, Florida
33602 (hereinafter called "Lender").
W I T N E S S E T H:
WHEREAS, Borrower desires to borrow money for business purposes, and
Borrower has requested certain credit facilities from Lender, and Lender is
willing to loan certain sums to Borrower from time to time on the terms set
forth herein.
NOW, THEREFORE, it is agreed as follows:
1. DEFINITIONS. As used herein,
a. "Account" means any right to payment for goods sold
or leased or for services rendered, regardless of how such right is evidenced
and whether or not it has been earned by performance, whether secured or
unsecured, now existing or hereafter arising, and the proceeds thereof.
b. "Advance" means any disbursement of funds by Lender
to or for the account of Borrower under the Line Loan pursuant to Borrower's
request as provided herein.
c. "Agreement" means this Credit Agreement, as the same
may be amended, supplemented or modified, in writing, from time to time.
d. "Authorized Representative" means (i) for an
individual, that individual or (ii) for a corporation, the officers and persons
designated by the borrowing resolution certified to Lender as authorized to
execute the Loan Documents.
e. "Available Line Commitment" at a particular time,
means an amount equal to the difference between (i) the amount of the Line
Commitment at such time, and (ii) the aggregate unpaid principal amount of
the Loans outstanding at such time under the Line Commitment.
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f. "Borrowing Base" shall have the meaning set out in
Section 2.I.b. of this Agreement.
g. "Borrowing Base Certificate" means that certificate
of Borrower in the form of Exhibit "A" to this Agreement.
h. "Business Day" shall mean a day other than a
Saturday, Sunday or other day on which commercial banks in the State of Florida
are authorized or required by law to close.
i. "Closing" shall occur on or before April 18, 1997, in
Chicago, Illinois, or such other place as the parties hereto may agree.
j. "Collateral" means any and all personal property of
Borrower in which Lender has pursuant to this Agreement, or by the Loan
Documents (other than the Real Estate Mortgage Loan) acquires or hereafter
acquires, a security interest.
k. "Commitment Letter" means the Commitment Letter
dated March 19, 1997.
l. "Eligible Account" means an Account owing to
Borrower, now existing or hereafter arising, which Account is due and payable
and not more than sixty (60) days have elapsed since the invoice was issued.
m. "Environmental Laws" means any of the Water Pollution
Control Act, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA" or
"Superfund Act"), the Superfund Amendments and Reauthorization Act, the Toxic
Substances Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Solid Waste Disposal Act, or any similar laws imposing liability on any person
for the generation, storage, impoundment and disposal, discharge, treatment,
release, seepage, emission, transportation or destruction of any Hazardous
Waste or of any garbage, sewage, effluent, smoke, dust or any other form of
pollution (whether or not denominated as a Hazardous Waste), as the same may be
amended from time to time, and any rules, regulations, or administrative orders
thereunder and any state statutes, laws, rules, regulations, or administrative
orders addressing the same or similar subjects as the foregoing federal laws.
n. "ERISA" means collectively the Employee Retirement
Income Security Act of 1974, as amended, the Multi Employer Pension Plan Act of
1980, as amended, and the regulations adopted pursuant thereto.
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o. "Event of Default" means any event of default
described in Section 10 hereof.
p. "Hazardous Waste" means any hazardous, toxic or
radioactive substance, materials or products as defined under any Environmental
Laws, including, but not limited to, petroleum products, ammonia, chlorine,
derivatives of petroleum products, ammonia or chlorine, pesticides, asbestos
and asbestos-containing materials, and polychlorinated biphenyls ("PCBs").
q. "Head Office" means the principal office of Lender,
presently located at 400 North Ashley Drive, 2nd Floor, Tampa, Florida 33602.
r. "Indebtedness" means all debts, liabilities and
obligations of Borrower to Lender (or any affiliate of Lender) of every kind,
nature and description, without regard to enforcement of any guaranty of any
other obligations or security, and whether or not such debts, liabilities or
obligations arise hereunder or otherwise, are now existing or hereafter
incurred, matured or unmatured, direct or indirect, primary or secondary,
secured or unsecured, joint or several, absolute or contingent, including
without limitation any Interest Rate Protection Agreements and any liability of
Lender as endorser of any checks or other drafts of customers of Borrower and
transmitted by Lender for collection, due or to become due, regardless of how
the same may be evidenced, and whether participated to or from Lender in whole
or in part, and including any extensions and renewals thereof or a part
thereof, together with interest, fees, charges, expenses and costs of
collection (including reasonable attorney's fees).
s. "Interest Rate Protection Agreement" means any and
all interest rate swap agreements, interest cap agreements, interest rate
collar agreements, exchange agreements, forward currency exchange agreements,
forward rate currency or interest rate options, foreign currency hedge, or any
similar agreements or arrangements entered into by Borrower and Lender in
connection with the Loans to hedge the risk of variable interest rate
volatility or fluctuations of interest rates, as such agreements or
arrangements may be modified, supplemented, and in effect from time to time,
and any and all cancellations, buy backs, reversals, terminations, or
assignments of any of the foregoing.
t. "Inventory" means goods held for sale or lease or to
be furnished under contracts of service, or raw materials, work-in-process or
materials used or consumed in a business.
u. "Line Commitment" shall mean the maximum amount of
the Loans that Lender is obligated to make to Borrower pursuant to Section
2.I.a. of this Agreement.
v. "Line Loan" means all amounts available or which may
be available to
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<PAGE> 4
Borrower or for Borrower's account pursuant to Section 2.I.a. of this
Agreement.
w. "Line Note" means the note of Borrower payable to the
order of Lender substantially in the form and substance of Exhibit "B" attached
hereto and made a part hereof and as further described in Section 2.I.a. of
this Agreement.
x. "Loans" mean all amounts available or which may be
made available to Borrower or for Borrower's account pursuant to Section 2 of
this Agreement.
y. "Loan Document" means any of this Agreement, the
Notes, the Security Agreement, any UCC Financing Statements, any mortgages,
assignments of rents and any other agreements, documents or instruments
evidencing, securing or relating to the Loans, whether executed prior to, at or
after the Closing hereof, as the same may be amended, supplemented or modified,
in writing, from time to time; and "Loan Documents" shall mean any and all of
the foregoing.
z. "Notes" mean the Line Note of Borrower payable to the
order of Lender substantially in the form and substance of Exhibit "B" which is
attached hereto and made a part hereof, that certain Term Note of Borrower
payable to the order of Lender substantially in the form and substance of
Exhibit "C" which is attached hereto and made a part hereof, and that certain
Promissory Note of Borrower payable to the order of Lender in the original
principal amount of $3,375,000.00, dated August 14, 1995, evidencing a real
estate mortgage loan made by Lender to Borrower, which is attached hereto as
Exhibit "D" and made a part hereof, all as further described in Section 2 of
this Agreement.
aa. "PBGC" means the Pension Benefit Guaranty Corporation
or any successor agency of the federal government.
bb. "Permitted Encumbrance" or "Permitted Encumbrances"
means the liens and encumbrances described in Exhibit "F" attached hereto and
made a part hereof.
cc. "Person" means any individual, partnership,
corporation or other legal entity.
dd. "Plan" means an employee benefit plan or other plan
maintained for employees of Borrower or any Subsidiary and covered by Title IV
of ERISA.
ee. "Real Estate Mortgage Loan" means that certain
construction/term loan made by Lender to Borrower in the principal amount of
$3,375,000.00, as evidenced by a Promissory Note in said amount dated August
14, 1995, which is attached hereto as Exhibit "D" and made a part hereof, for
the purpose of constructing an office/manufacturing facility, including
leasehold improvements in which the Borrower conducts its business.
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<PAGE> 5
ff. "Real Estate Mortgage Note" means that certain
Promissory Note of Borrower payable to the order of Lender in the original
principal amount of $3,375,000.00, dated August 14, 1995, evidencing the Real
Estate Mortgage Loan, which is attached hereto as Exhibit "D" and made a part
hereof.
gg. "Subsidiary" means any corporation or unincorporated
business entity of which securities or interests having voting power to elect a
majority of the board of directors or others performing similar functions are
at the time directly or indirectly owned or controlled by Borrower.
hh. "Tangible Net Worth" means, with respect to any
Person, the total assets (including Inventory valued at the lower of first in,
first out, cost or market value) less total liabilities; provided, however,
that there shall be excluded from the tangible net worth of Borrower: 1) all
intangible assets as determined in accordance with generally accepted
accounting principles, including, without limitation, organizational fees and
expenses, patents, trademarks, copyrights, goodwill, covenants not to compete,
research and development costs, training costs, treasury stock, unamortized
debt discount and deferred charges; 2) all write-ups in the book value of any
fixed asset or investment resulting from a revaluation thereof; 3) any gain
arising from any write-up of assets; 4) earnings of any Subsidiary of Borrower
accrued prior to the date it became a Subsidiary of the Borrower; 5) earnings
of any Person, substantially all of the assets of which have been acquired by
Borrower in any manner, realized by such Person prior to the date of the
acquisition; 6) any portion of the net earnings of any Subsidiary of Borrower
which for any reason is legally unavailable for payment of dividends to
Borrower; 7) the earnings of any Person to which assets of Borrower have been
sold, transferred or disposed of, or into which Borrower shall have merged, or
been a party to a consolidation or other form of reorganization, prior to the
date of such transaction; 8) any gain or earnings from any industrial
development or revenue bond financing or defeasance; 9) leasehold improvements;
and (10) sums due from officers, stockholders and affiliates.
ii. "Term Loan" means all amounts available or which may
be available to Borrower or for Borrower's account pursuant to that certain
Term Promissory Note in the original principal sum of $1,000,000.00 executed at
Closing by Borrower in favor of Lender, substantially in the form and substance
of Exhibit "C" attached hereto and made a part hereof, and as further described
in Section 2.II.a. of this Agreement.
jj. "Term Note" means that certain Term Promissory Note
in the original principal sum of $1,000,000.00 executed at Closing by Borrower
in favor of Lender, substantially in the form and substance of Exhibit "C"
attached hereto and made a part hereof, and as further described in Section
2.II.a. of this Agreement.
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<PAGE> 6
The foregoing definitions shall be applicable to the singulars and plurals of
the foregoing defined terms. Any accounting terms not specifically defined in
this section shall have the meaning ascribed thereto by generally accepted
accounting principles ("GAAP"), as in effect from time to time, consistently
applied. Any capitalized term in this Agreement not specifically defined in
this section shall have the meaning ascribed thereto in the Uniform Commercial
Code of the State of Florida ("UCC").
2. Loans.
I. Line of Credit.
a. Subject to the terms and conditions stated
herein, Lender shall lend to Borrower the lesser of (i) the principal sum of
SEVEN MILLION AND NO/100 DOLLARS ($7,000,000.00) or (ii) the Borrowing Base
as determined by Lender in accordance with subsection 2.I.b. below. Lender may
in its discretion (but is not obligated to) lend to Borrower in excess of the
limitation in the preceding sentence, in which case Borrower shall authorize,
execute and deliver to Lender a demand note for any such additional amounts
and such additional documents, and pledge and assign and transfer to Lender
additional collateral or cash, as Lender may require. The obligation of
Borrower to repay all amounts loaned by Lender pursuant to this Agreement is to
be evidenced by a promissory note in the form and substance of Exhibit "B"
which is attached hereto and made a part hereof. Any increases of the Line
Loan may be made at such times and at the sole option of Lender after a review
by Lender of Borrower's financial statements and business operations. Lender
shall not, however, be obligated to increase the Line Loan.
b. The Borrowing Base shall be equal to the sum
of (i) eighty percent (80%) of the book value of Borrower's domestic Eligible
Accounts, (ii) eighty percent (80%) of the book value of Borrower's foreign
Eligible Accounts which are backed by letters of credit, and (iii) fifty
percent (50%) of the book value of all of Borrower's other foreign Eligible
Accounts, as set forth on the Borrowing Base Certificate attached hereto and
made a part hereof as Exhibit "A."
c. At Lender's option, any payments shall be
credited first to payment of any late charges, fees or expenses, if any, then
to accrued and unpaid interest and the balance, if any, ("Credit") to
principal. Any accounting provided to Borrower by Lender shall be deemed
final, binding and conclusive upon Borrower in all respects as to all matters
as reflected therein, unless Borrower, within thirty (30) days after the date
the accounting is rendered, notifies Lender in writing of any objections,
describing the basis for such objections with specificity. In such event, only
those items expressly objected to in the notice shall be deemed disputed by
Borrower.
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<PAGE> 7
d. Borrower shall have the right, upon not less
than five (5) Business Days' written notice to Lender, to terminate or reduce
the Commitment at any time, provided that any notice of termination shall be
accompanied by payment in full of the Line Loan and the Advances outstanding
thereunder and provided that any notice of reduction shall be accompanied by
payment in full of the Line Loan balance that exceeds the reduced Line
Commitment.
e. In the event that Lender shall notify
Borrower that the current Line Loan balance exceeds the lesser of 1) the Line
Commitment, or 2) the Borrowing Base, Borrower shall immediately repay the Line
Loan by the amount of such excess.
f. Subject to the terms and conditions stated
herein, proceeds from the Line Loan may be used by the Borrower for the
issuance of Standby Letters of Credit in amounts which are the lesser of (i)
the principal sum of SEVEN MILLION AND NO/100 DOLLARS ($7,000,000.00) or (ii)
the Borrowing Base as determined by Lender in accordance with Subsection 2.I.b
above. After issuance, the amount of any outstanding Standby Letter of Credit
shall be deducted from the Borrowing Base, but the amount of each such Standby
Letter of Credit shall be added back to the Borrowing Base as soon as such
Standby Letter of Credit is no longer outstanding. The obligation of Borrower
to repay all amounts loaned by Lender pursuant to this subsection is to be
evidenced by an application agreement for Standby Letter of Credit in the form
and substance satisfactory to Lender.
II. Term Loan.
a. Subject to the terms and conditions stated
herein, Lender shall make available to Borrower a Term Loan up to the amount of
ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) for the purpose of purchasing
equipment.
b. Prior to any funding under the Term Loan,
Borrower shall provide Lender with descriptions and serial numbers for the
equipment to be purchased. The Term Loan shall be funded in full upon Closing
for the purchase of the equipment described on Schedule 2-II attached hereto
and by reference made a part hereof.
III. Real Estate Mortgage Loan. The Real Estate Mortgage
Loan is more particularly defined in Section 1.ad. above.
3. Security. As security for the Line Loan and the Term Loan,
Borrower will at closing execute and deliver to Lender security agreements,
assignments and other documents in form and substance satisfactory to Lender
granting to Lender a lien and security interest on, in and to all of the assets
described on Exhibit "E" which is attached hereto and made a part hereof, now
owned or hereafter acquired, and the proceeds and products thereof (hereinafter
sometimes referred to as "Collateral") free of all claims, liens and
encumbrances
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<PAGE> 8
except for claims, liens and encumbrances, if any, listed on Exhibit "E" and
except for liens and encumbrances in favor of Lender. Borrower, shall execute
and deliver to Lender, in form and substance satisfactory to Lender, UCC
financing statements and other documents requested by Lender to perfect the
liens and security interests referred to in this paragraph. Lender and
Borrower expressly acknowledge that the collateral pledged to Lender under the
Real Estate Mortgage Loan shall not in any way secure the Line Loan or the Term
Loan or the Borrower's obligations under the Line Loan or the Term Loan.
As further security for the Loans, Borrower hereby assigns and
grants to Lender a security interest in and to all property of Borrower which
is or may hereafter be in Lender's possession in any capacity including all
monies owed or to be owed by Lender to Borrower including without limitation
monies held in bank depository accounts; and with respect to all such property,
Lender shall have the same rights as it has to any Collateral, and Borrower
acknowledges and agrees that, without limiting any other right of Lender,
whenever Lender has the right to declare any Indebtedness to be immediately due
and payable (whether or not it has so declared), Lender may set off against the
indebtedness all monies then owed to Borrower by Lender in any capacity,
including without limitation monies held in bank depository accounts, whether
due or not and Lender shall be deemed have exercised its right to set off
immediately at the time its right to such election accrues.
4. Closing. The closing of this transaction shall be held on or
before April 18, 1997, upon the fulfillment of all the conditions and
agreements contained herein in Chicago, Illinois, or at such other place as the
parties hereto may agree.
5. Use of Proceeds. The proceeds from the Line Loan and the Term
Loan, after deduction of loan closing costs, and payment to any creditors of
Borrower as may be directed by Borrower or as may be necessary or appropriate
to protect Lender's interest in the Collateral, shall be disbursed to Borrower
or credited to Borrower's deposit account with Lender to be used for:
a. Line Loan: Short-Term Working Capital of
Borrower and to Support the Issuance
of Letters of Credit
b. Term Loan: Purchase of Equipment
No part of the proceeds of the Loans shall be used, directly or indirectly, for
the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U of the Board of Governors of the Federal Reserve System or for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase such margin stock or for any other purpose which might constitute
this transaction as "purpose credit" within the meaning of said Regulation U.
Neither Borrower, nor any agent, employee, officer, director or
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<PAGE> 9
shareholder acting on behalf of Borrower has taken or shall take any action
which might cause the transactions contemplated hereby to violate said
Regulation U.
6. Affirmative Covenants of Borrower. Borrower covenants and
agrees that from the date hereof until the Loans are paid in full, Borrower
shall:
a. Deliver to Lender, within forty-five (45)
days after the end of each quarter, quarterly unaudited financial statements
(Form 10-Q) concerning its business on a consolidated and consolidating basis,
prepared by the Borrower's Authorized Representative, including income
statements, balance sheets and other accounting data as may be reasonably
requested by Lender.
b. Deliver to Lender, within one hundred twenty
(120) days after the end of each fiscal year of Borrower, unqualified audited
financial statements for the fiscal year prepared in accordance with generally
accepted accounting principles by an independent certified public accountant,
including balance sheets, income statements, cash flow statements, changes in
shareholder' equity, and such other accounting data as may be reasonably
requested by Lender.
c. Deliver to Lender such other financial
statements, profit and loss statements, and other accounting data related to
Borrower as may be reasonably requested by Lender from time to time concerning
Borrower.
d. Deliver to Lender, within ten (10) days after
the service of process or equivalent notice, written notice of any litigation,
or arbitration proceeding, or government investigation where the amount
involved is material or the nature of the proceeding is significant.
e. Deposit with Lender monies, checks, notes,
drafts, wire transfers, other payment media or other property (including goods
acquired through barter, swap or exchange) representing the proceeds of any
Collateral which comes into the possession or control of Borrower in a
Borrower's operating account with Lender. Borrower grants Lender a security
interest in such account to secure all of the Indebtedness. Borrower shall
execute such additional and further documents as Lender requires to evidence
this requirement and pledge.
f. Maintain books of accounts of Borrower's
business in accordance with generally accepted accounting principles
consistently applied.
g. Permit any person designated by Lender to
visit and inspect the business premises of Borrower and discuss Borrower's
affairs and finances with Borrower at reasonable times and upon reasonable
prior notice by Lender to Borrower.
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h. Maintain and provide Lender with evidence of
insurance in such amounts and against such liabilities and hazards as
reasonably required by Lender and by any security agreements and mortgages to
be executed in connection with the Loans.
i. Pay and discharge or cause to be paid and
discharged, all taxes, assessments, levies, fees, and charges and all other
governmental charges, general and special, ordinary and extraordinary, whether
or not within the contemplation of the parties hereto, which are at any time
levied upon or assessed against Borrower or its property or any part thereof,
whether or not the failure to pay such tax, assessment, levy, fee, or charge
might result in the creation of a lien upon such properties or any part
thereof, when the same shall become due and payable; and all income, excess
profits, excise, sales, gross receipts, and other taxes, duties or imposts,
whether of a like or different nature, assessed, levied or imposed by
governmental authority on Borrower or Borrower's properties or any part thereof
when the same shall become due and payable;except Borrower may in good faith
contest any such taxes, assessments and other charges and, in the event of any
such contest, may permit the taxes, assessments or other charges so contested
to remain unpaid during the period of such contest and during the applicable
appeal period or the conduct of an appeal therefrom unless Lender shall notify
Borrower that, in its reasonable opinion by non-payment of any such items the
Collateral or any part thereof will be subject to immediate loss or forfeiture,
in which event such taxes, assessments or charges shall be promptly paid by
Borrower.
j. Comply in all material respects with all land
use, building, zoning, OSHA, environmental, pollution, and other laws, rules,
ordinances and regulations promulgated by any governmental authority and
applicable to Borrower's business.
k. Do everything necessary or expedient to
perfect and preserve the security interest of Lender as a first security
interest in the Collateral and defend any action, proceeding or claim affecting
the Collateral.
l. Maintain its properties in good condition and
make all necessary replacements, additions and improvements thereto, reasonable
wear and tear excepted.
m. Pay and discharge when due any and all
additional documentary stamp taxes or intangible taxes, levies or other charges
in connection with the Loans and the promissory note(s) executed in connection
herewith, together with all modifications, renewals and advances heretofore or
hereafter made, together with any interest or penalty incident thereto (unless
such interest or penalty results solely from the gross negligence or willful
misconduct of Lender), and Borrower agrees to indemnify and save harmless
Lender from and against all loss, cost, expense and attorney's fees (as defined
in the Notes) that may be incurred by Lender in connection with any such
assessment, tax, levy or other charge, or any
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interest or penalty resulting therefrom which may be incurred by Lender in
connection therewith.
n. Maintain its principal operating bank
depository accounts with Lender.
o. Do, or cause to be done, all things necessary
to maintain its existence as a corporation in active status under the laws of
the State of Florida and do or cause to be done all things necessary to
preserve and keep in force and effect its right to own property and transact
business in the State of Florida.
p. Use its reasonable best efforts to maintain
inventory which is good and merchantable and which is not obsolete.
q. Provide to Lender a list of accounts
receivable with the detailed aging thereof within thirty (30) days after the
end of each quarter and/or at such other times as Lender may reasonably
request, all in form and substance satisfactory to Lender.
r. Provide to Lender a Borrowing Base
Certificate in the form of Exhibit "A" prior to each Advance on the Line
Commitment and within thirty (30) days after the end of each quarter, if there
is an outstanding principal balance or if any letters of credit have been
issued under the Line Loan, all in form and substance satisfactory to
Lender. At each submission, the Borrowing Base Certificate will be calculated
based on the Accounts as of the previous fiscal quarter end, and will be signed
by an officer of the Borrower or designee.
s. Notify Lender immediately of any default by
any Account debtor in payment or performance of its obligations with respect to
any Collateral, where the Account is in excess of $250,000.00.
t. Pay to Lender any Advances in excess of the
amounts permitted by this Agreement in the event that goods constituting
Collateral are returned to Borrower, or where the contract or lease is
canceled, terminated or expired.
u. Pay employees wages and overtime in
compliance with the Fair Labor Standards Act, as amended, and regulations
promulgated thereunder.
v. Pay or make provisions to pay all applicable
Federal, state and local employees' income, social security and unemployment
tax.
w. Duly and punctually perform all covenants,
terms, and agreements expressed as binding upon Borrower under any Interest
Rate Protection
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Agreements. Borrower acknowledges that Borrower's obligations under any
Interest Rate Protection Agreements are obligations secured by the Loan
Documents. Further, Borrower acknowledges and agrees that the occurrence of
any event of default or defaults under any Interest Rate Protection Agreement
shall be a default under this Agreement, and vice versa.
7. Negative Covenants of Borrower. Borrower covenants and agrees
that from the date hereof until the Loans are paid in full, Borrower will not,
without first having obtained a written consent of Lender which consent shall
be in Lender's reasonable discretion:
x. Create or permit to exist, any lien or
encumbrance upon (i) any of Borrower's assets used in the business and pledged
to the Lender as Collateral under this Agreement or as security for the Real
Estate Mortgage Loan (as amended on even date herewith), whether now owned or
hereafter acquired; (ii) Borrower's Inventory as now owned or hereafter
acquired, except for the Permitted Encumbrances and, (iii) equipment, except
for liens for debts or additional borrowings of up to $1,000,000.00, in the
aggregate, per annum.
y. Loan or otherwise advance any sum to any
Person or guarantee or otherwise in any manner become responsible for the
obligations of any other Person, directly or indirectly, by agreement to
purchase the indebtedness of any other Person which alone or in the aggregate
exceeds $200,000.00 per annum, except for endorsements of negotiable
instruments for collection in the ordinary course of business.
z. Discount or sell with or without recourse its
notes, accounts receivable, instruments or chattel paper.
aa. Change its name, merge into, consolidate
with, or sell or transfer all or a substantial part of its assets to any other
Person, or otherwise change its structure or identity.
bb. Borrow any sum of money or incur any other
indebtedness exceeding $1,000,000.00 in the aggregate per annum, except for
normal trade credit on open accounts.
cc. Sell any of its assets, except inventory or
capital equipment in the normal course of business and further except other
assets aggregating less than $100,000.00 in any year, unless it shall
substitute assets having equal or greater value or utility, which substituted
assets, if they are collateral for the Loans, shall be subject to a first,
perfected security interest in favor of Lender and shall be free of all other
liens and encumbrances except the Permitted Encumbrances described on Exhibit
"F".
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<PAGE> 13
dd. Purchase any equipment or other fixed assets
or make any other capital expenditures, the cost of which to Borrower, in the
aggregate, would exceed $4,000,000.00 in any one fiscal year of Borrower.
ee. Allow its total liabilities to Tangible Net
Worth ratio to exceed 1:00 to 1:00 at the end of any fiscal quarter of the
Borrower.
ff. Allow its Cashflow Coverage Ratio to be less
than 2.00:1.00. The Cashflow Coverage 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 All Current Maturities of
Long Term Debt and Current Maturities of Capital Lease Obligations plus
Interest Expense. Borrowers compliance with 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.
gg. Encumber its Inventory or allow any lien,
whether consensual or arising by operation of law to attach to its Inventory,
except for Permitted Encumbrances.
8. Representations and Warranties of Borrower. In order to
induce Lender to make the Loans, Borrower makes the following representations
and warranties:
hh. All balance sheets and financial information
of Borrower delivered to Lender prior to and simultaneously with the execution
of this Agreement, fairly represent the financial condition of Borrower and the
result of Borrower's operations in the business described herein as of the
respective dates of said balance sheets or financial statements. Said
financial statements have been prepared in accordance with generally accepted
accounting principles, consistently applied in the various statements
throughout the periods involved, except as otherwise indicated therein. All
other information submitted by Borrower in support of the application for the
Loans is true and correct in all material respects as of the date of this
Agreement, and no material adverse change with respect to the Borrower has
occurred since February 28, 1997.
ii. There are no actions, suits, or proceedings
by any public or governmental body, agency, or authority, or by any person,
pending, or to the knowledge of Borrower, threatened against Borrower, or to
which Borrower is a party, involving the possibility of any judgment or
liability not fully covered by insurance or by adequate reserves established by
Borrower, or which may result in any material adverse change in the business or
condition, financial or otherwise, of Borrower, except as otherwise disclosed
in public filings made by the Borrower with the Securities Exchange Commission,
a copy of which
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<PAGE> 14
public filings has been provided to Lender. Borrower has to the best of its
knowledge, complied with all applicable laws and requirements of governmental
authority.
jj. Borrower has good title to all of Borrower's
properties reflected in its balance sheets and financial statements, including
without limitation the Collateral described in Exhibit "E," and such properties
are free and clear and encumbrances, except such as would be permitted under
the provisions of this Agreement. It is acknowledged by Borrower that the only
liens, encumbrances and charges permitted under this Agreement with respect to
the Collateral are those described on Exhibit "E."
kk. Borrower is not a party to any contract which
would materially and adversely affect Borrower's property or business or
Borrower's ability to perform its obligations under this Agreement or the
instruments signed pursuant to this Agreement. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated, nor the compliance with the terms hereof, or the promissory notes
and other instruments, will conflict or be inconsistent with, or will result in
any of, or constitute a default under, or result in the creation or imposition
of any lien, charge, or encumbrances upon any of the property or assets of
Borrower, pursuant to the terms of any indenture, mortgage, deed of trust,
security agreement, or other instrument to which Borrower is a party, or by
which Borrower may be bound.
ll. Borrower has filed all federal and state
income tax returns, which to the knowledge of Borrower is required to be filed,
and has paid all taxes as shown on said returns and all assessments received by
Borrower to the extent that such taxes have become due.
mm. Borrower uses no fictitious name in the
conduct of its business.
nn. No substantial loss, damage, destruction or
taking of any of the real or personal property of Borrower or of the real or
personal property leased by Borrower has occurred which has not been fully
restored or replaced or which is not fully covered by insurance, and neither
such property nor the business of Borrower has been adversely affected in any
substantial way as the result of any accident, strike, lockout, a combination
of workmen, embargo, riot, war, or act of God, or the public enemy.
oo. All pension or welfare benefit plans (within
the respective meanings of Section 3(2) and 3(l) of ERISA) other than
multiemployer plans (within the meaning of Section 3(37) of ERISA), to which
Borrower is a party or to which Borrower makes any employer contributions with
respect to employees, are set forth on Exhibit "G-1" which is attached hereto
and made a part hereof. With regard to the current or prior plan years of each
plan referred to in Exhibit "G-1," all contributions required to meet the
employer contribution obligations of Borrower under either Section 412 of the
Internal
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<PAGE> 15
Revenue Code of 1986, as amended (the "Code"), or Part 3 of Title IB of ERISA,
the terms of the plan itself, or any applicable collective bargaining
agreement, with respect to the elapsed portion of the current and previous plan
years, have been duly made, and such plan and its related trust have not
incurred any accumulated funding deficiency (within the meaning of Section
412(a) of the Code and Section 302 of ERISA) since the effective date of ERISA.
pp. All multiemployer plans (within the meaning
of Section 3(37) of ERISA) to which either Borrower is a party are set forth on
Exhibit "G-2" which is attached hereto and made a part hereof. With regard to
the current and previous plan years of each multiemployer plan referred to in
Exhibit "G-2," all contributions required to meet the employer contribution
obligations of Borrower under either Section 412 of the Code, Part 3 of Title
IB of ERISA, the terms of the plan itself, or any applicable collective
bargaining agreement, with respect to the elapsed portion of the current and
previous plan years, have at been duly made and such plan and its related trust
have not incurred any accumulated funding deficiency (within the meaning of
Section 412(a) of the Code and Section 302 Of ERISA) since the effective date
of ERISA. In addition, Borrower has not incurred any withdrawal liability
under Title IV of ERISA (as amended by the Multiemployer Pension Plan
Amendments Act of 1980) with respect to any multiemployer plan.
qq. Neither Borrower nor any Subsidiary of
Borrower has engaged in any "prohibited transactions" within the meaning of
Section 4975 of the Code or Section 406 of ERISA, which could subject Borrower
or such Subsidiary, or any other party, to the tax or penalty on prohibited
transactions imposed by Section 4975 of the Code.
rr. No reportable event (as such term is defined
in Title IV of ERISA) has occurred with respect to, nor has there been
terminated, any plans subject to Title IV of ERISA and maintained for any
employees of Borrower or any member of any "controlled group of corporations"
(as such term is defined in Section 1563 of the Code) of which Borrower is a
member.
ss. Borrower is duly incorporated and validly
existing under and by virtue of the laws of the State of Florida and in active
status with the State of Florida and in good standing in all other
jurisdictions where it owns or leases real or personal property, or where its
activities require such qualification, except where the failure to so qualify
would not have a material adverse effect on the Borrower.
tt. There are no shareholders agreements among
the shareholders of Borrower.
uu. Borrower is in full compliance with all
provisions of the Fair Labor Standards Act, as amended, and regulations
promulgated thereunder.
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<PAGE> 16
vv. The execution, delivery and performance by
Borrower of this Agreement and each Loan Document to which Borrower is or will
become a party:
(1) have been duly authorized on behalf
of Borrower by all necessary or proper corporate action, including shareholder
approval if required;
(2) do not contravene any law, statute,
rule or regulation or any judgment, decree or order, of any court of
governmental agency by which Borrower is bound, or of Borrower's articles of
incorporation, bylaws or any preference stock provisions;
(3) shall not result in or constitute a
default under any agreement, contract, indenture, mortgage, deed of trust,
security agreement or other instrument to which Borrower or any of its
property, including any Collateral, is bound; and
(4) shall not result in the creation or
imposition of (or the obligation to create or impose) any lien, charge or
encumbrances upon any assets or property of Borrower or upon any Collateral.
ww. When executed and delivered, this Agreement
and the Loan Documents shall be valid and binding obligations of Borrower, and
shall be enforceable against Borrower in accordance with their terms, except as
enforceability may be limited by equitable principles or by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally.
xx. Borrower has paid all premiums due to the
PBGC with respect to each plan identified in Exhibit "G-2" or multiemployer
plan identified in Exhibit "G-2" and no premium, late payment charge, premium
penalty or interest thereon is due. The PBGC has made no demand on Borrower
for payment of any liability, including interest, arising under Title IV(D) of
ERISA, and no lien exists in favor of the PBGC upon any real or personal
property or rights to such property belonging to Borrower.
yy. Borrower, to the best of its knowledge, is in
compliance in all material respects with all provisions of the Environmental
Laws, and with any rules, regulations, and administrative orders of any
governmental agency, and with any judgments, decrees or orders of any court of
competent jurisdiction with respect thereto.
zz. Borrower has not received any assessment,
notice of (primary or secondary) liability or notice of financial
responsibility, and no notice of any action, claim or proceeding to determine
such liability or responsibility, or the amount thereof, or to impose civil
penalties with respect to a site listed on any federal or state listing of
sites containing or believed to contain Hazardous Wastes, nor has Borrower
received notification that any
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<PAGE> 17
hazardous substances (as defined under CERCLA) that it has disposed of have
been found in any site at which any governmental agency is conducting an
investigation or other proceeding under any Environmental Law.
aaa. To the best of Borrower's knowledge, except
in compliance with applicable Environmental Laws, no part of the property used
by Borrower in its business or any building, structure or facility located
thereon or improvement thereto: (i) contains or contained asbestos or PCBs;
(ii) have or have had asbestos-containing materials or electrical
transformers, fluorescent light fixture ballasts or other equipment containing
PCBs installed thereon or therein; (iii) is or has been used for the handling,
processing, storage or disposal of Hazardous Wastes; or (iv) contain or
contained above-ground or underground storage tanks or other storage facilities
for Hazardous Wastes.
bbb. Borrower has paid any applicable
environmental excise taxes imposed pursuant to Sections 4611, 4661, or 4681 of
the Code.
9. Conditions to Advances. Borrower shall deliver to Lender
prior to each Advance on the Line Commitment, a Borrowing Base Certificate
stating the value of the Eligible Accounts as of such date, the amount of the
requested Advance and such other information as Lender shall require, and the
following statements shall be true:
ccc. All of the representations and warranties set
forth in Section 8 of this Agreement or in any other Loan Documents shall be
correct in all material respects on and as of the date of such Advance as
though made on and as of such date, except where made with respect to a
specific earlier date.
ddd. Borrower shall have observed and performed in
all material respects all of the terms, conditions and agreements set forth
herein or in any other Loan Documents on their respective parts to be observed
or performed and no Event of Default and no event that, with the giving of
notice, passage of time, or both shall constitute an Event of Default shall
have occurred and be continuing.
eee. All financial statements, information and
other data furnished by Borrower to Lender are, in all material respects,
accurate and correct; the financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied (except to
the extent otherwise specified therein), and fairly present the consolidated
financial condition of Borrower; no material adverse changes have occurred
since the date of said statements; and no material liabilities, contingent or
otherwise, not shown on said financial statements, exist.
fff. No liens, security interests or encumbrances
shall have been filed or recorded against any Collateral, other than liens in
favor of Lender and liens, security
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<PAGE> 18
interests and encumbrances described in and in compliance with Exhibit "E"
hereof, and Borrower has no notice of any intention by any person to file or
record any such liens, security interests or encumbrances against any
Collateral.
ggg. There are no actions, suits, proceedings, or
claims pending or threatened against or affecting Borrower, or any Collateral,
the result of which might substantially and adversely affect their respective
financial condition, business or operations.
hhh. Lender shall determine that the making of
such Advance will not cause the amounts outstanding to exceed the Borrowing
Base or such excess as Lender in its sole discretion shall determine.
iii. Advances under the Line Loan will be made by
telephonic or written communication from a person reasonably believed by the
Lender to be an authorized representative of the Borrower. Unless otherwise
agreed by the Lender, all advances will be made to a demand deposit account
maintained at the Lender in the name of the Borrower.
10. Events of Default. The happening of one or more of the
following events shall constitute an Event of Default under this Agreement:
jjj. If Borrower shall fail to make any payment of
principal or interest owing to Lender under the Line Note or the Term Note
within fifteen (15) days after the same shall become due, or if Borrower shall
fail to make any payment of principal or interest owing to Lender under the
Real Estate Mortgage Note within the applicable grace period, if any.
kkk. The occurrence of a material adverse change
in the financial condition of Borrower which is not corrected within thirty
(30) days after Borrower becomes aware of the material adverse change in
financial condition.
lll. If Borrower shall fail to make any required
payment of principal or interest on any other obligation for borrowed money
beyond any period of grace provided with respect thereto and such other lender
notifies Borrower of such default, or if Borrower shall default in the
performance of any other agreement, term or condition, contained in any
agreement under which such obligation is created, if the effect of such default
is to cause or permit the holder or holders of such obligations to cause such
obligations to become due prior to stated maturity, and such failure or default
is not cured within thirty (30) days after Borrower is notified by the other
lenders/creditors of the failure/default.
mmm. If any material representation or warranty
made by Borrower or in any writing furnished in connection with or pursuant to
this Agreement shall be false in any
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material respect on the date on which made, and such falsity is not cured and
made truthful within thirty (30) days of written notice to Borrower from Lender
as to such matter.
nnn. If Borrower defaults in the performance of
any other agreement or covenant contained in this Agreement, or violates any
other terms, condition, or representation contained in this Agreement, the
Notes, any security agreement or in any instrument, document or agreement
related hereto or thereto, and such default or violation is not cured within
thirty (30) days of written notice to Borrower from Lender as to such default
or violation.
ooo. If there are final judgments for the payment
of money in excess of $50,000.00, which are outstanding against Borrower, and
any one of such judgments has been outstanding for more than ninety (90) days
from the date of its entry and has not been discharged in full or stayed
pending further proceedings.
ppp. If a receiver, liquidator or trustee of
Borrower, or of any material portion of their property, is appointed by court
order and such order remains in effect for more than ninety (90) days; or
Borrower is adjudicated bankrupt or insolvent; or any material portion of the
properties of Borrower is attached or sequestered by court order and such order
remains in effect for more than ninety (90) days; or a petition is filed
against Borrower under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect, and is not dismissed within sixty (60) days
after such filing.
qqq. If Borrower files a petition in voluntary
bankruptcy or seeks relief under any provision of any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now, or hereafter in effect, or
consents to the filing of any petition against it under such law.
rrr. If Borrower makes an assignment for the
benefit of its creditors, or admits in writing its inability to pay its debts
generally as they become due, or consents to the appointment of a receiver,
trustee or liquidator of Borrower or of all or any part of its property.
sss. If Borrower ceases doing business as a going
concern or substantially changes the nature of its business or commences the
liquidation of its business or its assets.
ttt. Any default by a Borrower under any of the
Notes or any default of any other document or instrument evidencing or securing
said Notes after applicable grace periods, to include without limitation the
Mortgage, Assignment of Rents and Security Agreement securing the Real Estate
Mortgage Loan; any Event of Default under
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this Agreement shall also be deemed a default of said Real Estate Mortgage Note
and Mortgage.
11. Remedy for Default. Upon the occurrence of any Event of
Default, Lender may terminate its commitment to make any further Advances and
may declare the entire principal and all interest on the Loans and all other
indebtedness of Borrower to Lender, whether direct or indirect, to be
immediately due and payable and the Loans and all such indebtedness thereupon
shall be and become immediately due and payable, and Lender may proceed to
collect the same by foreclosure, set off against all monies owed to Borrower by
Lender in any capacity, including without limitation monies held in bank
depository accounts, or as otherwise provided in the instruments, documents
and/or agreements signed by Borrower. Lender shall also have such other rights
and remedies as provided herein or in any other instrument, document or
agreement executed by Borrower in favor of Lender or its predecessors in
interest and/or by law or at equity, including but not limited to the right to
sue for and recover damages as a result of any such default. All of Lender's
rights and remedies shall be cumulative and not alternative and may be
exercised consecutively or concurrently at Lender's option.
12. Miscellaneous.
uuu. All representations and warranties contained
herein or made in writing by Borrower in connection herewith shall survive the
execution and delivery of this Agreement and of the Notes and Loan Documents.
vvv. Neither the failure nor any delay on the part
of Lender to exercise any right, power, or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of such right,
power, or privilege preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege.
www. This Agreement shall be binding upon and
inure to the benefit of Borrower and Lender and their respective successors and
assigns. Notwithstanding the foregoing, no part of this Agreement or the
obligations hereunder shall be assigned by Borrower without the prior written
consent of Lender.
xxx. This Agreement and the rights and obligations
of the parties hereunder shall be construed in accordance with and governed by
the laws of the State of Florida.
yyy. 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,
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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 OR
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 INSTRUMENT, AGREEMENT OR DOCUMENT 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.
(i) SPECIAL RULES. THE ARBITRATION
SHALL BE CONDUCTED IN THE COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE
EXECUTION OF THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR IF THERE IS REAL OR
PERSONAL PROPERTY COLLATERAL, IN THE COUNTY WHERE SUCH REAL OR PERSONAL
PROPERTY IS LOCATED, 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.
(ii) RESERVATION OF RIGHTS. NOTHING IN
THIS ARBITRATION PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF
ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS
CONTAINED IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY
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 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. 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.
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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.
zzz. Unless otherwise specifically indicated to
the contrary, in the event the consent of Lender is required herein, such
consent shall be in Lender's reasonable discretion.
aaaa. All costs and expenses of the Loans shall be
paid by Borrower and/or Lender as set forth in the Commitment Letter.
bbbb. Paragraph headings are for the purpose of
identification only and are not considered as a substantive part of this
Agreement.
cccc. This Agreement, the Notes, the Loan
Documents, the Commitment Letter and the other instruments, documents and
agreements executed in connection with this transaction or pursuant to this
Agreement or said Commitment Letter shall be read together, and the provisions
of each shall be deemed supplemental and not in conflict with each other;
however, in the event a court of competent jurisdiction determines that a
direct or unreconcilable conflict exists, the provisions of the Notes and any
security agreement shall prevail over the other documents. In the event of a
conflict between a provision contained in the Commitment Letter and any other
Loan Document, the terms of the other Loan Document shall control. As to the
Real Estate Mortgage Loan, the Line Loan and the Term Loan, this Agreement
completely supersedes and replaces that certain Amended and Restated Revolving
Credit Agreement between Borrower and Lender, dated January 19, 1995, as
amended from time to time.
dddd. Whenever the context so requires, the neuter
gender includes the feminine and/or masculine, as the case may be, and the
singular number includes the plural.
eeee. Each paragraph, provision, sentence and part
thereof of this Agreement shall be deemed separate from each other paragraph,
provision, sentence or part thereof, and the invalidity of any aforementioned
portion of this Agreement shall not affect the enforceability of the balance of
this Agreement.
ffff. If more than one Borrower executes this
Agreement, the term "Borrower" includes each of the Borrowers, respectively, as
well as all of them, and their obligations hereunder shall be joint and
several.
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gggg. Borrower hereby authorizes and directs Lender
and its agents and employees to correct patent errors and to fill in any blanks
(which blanks are not substantive to the terms hereof) in this Agreement and/or
in any exhibit, instrument, document or agreement related hereto and to attach
hereto or thereto any exhibits which are a part hereof or thereof.
hhhh. Borrower agrees that, at any time and from
time to time after the execution and delivery of this Agreement, they shall,
upon request of Lender, execute and deliver such further documents and do such
further acts and things as Lender may reasonably request in order to fully
effect the purposes of this Agreement and to protect Lender's interest in the
Collateral.
iiii. All notices provided for herein shall be in
writing, and may be by hand (or courier) delivery, overnight mail, telecopier
facsimile, or by certified or registered receipt requested mail, addressed as
follows:
IF TO BORROWER: PLASMA-THERM, INC., a Florida corporation
10050 16th Street North
St. Petersburg, Florida 33716
Attn: Diana DeFerrari
Telephone (813) 577-4999; Telecopy (813) 577-6844
IF TO LENDER: NATIONSBANK, N.A. (SOUTH), a national banking
association
400 N. Ashley Drive, 2nd Floor
Tampa, FL 33602
Attn: James E. Harden, Jr.
Telephone (813) 224-5147; Telecopy (813) 224-5770
Notice to any party shall be deemed complete upon the occurrence of any one of
the following: (i) hand delivery to said party, (ii) completion of transmission
by telecopy or facsimile of said notice, (iii) one business day after sending
said notice by overnight mail or, (iv) three (3) business days after depositing
the same with the United States Postal Service, addressed to that party with
the proper amount of postage affixed thereto, if sent by registered or
certified mail, return receipt requested. Receipt of any notice by any of the
persons listed above to receive notices to a party shall constitute actual
receipt of such notice by that party.
23
<PAGE> 24
jjjj. This Agreement may be executed in
counterparts, each of which shall be deemed an original and consolidated as one
agreement.
kkkk. The occurrence of an Event of Default under
any of the Loans or the Loan Documents shall be and constitutes an event of
default under all other Loans and Loan Documents, and upon the occurrence of
such Event of Default, Lender may accelerate the balance due under any or all
of the Notes and pursue its remedies under any and all of the Loan Documents,
including but not limited to the foreclosure of Lender's mortgage and/or
security interests in any or all of the property pledged as collateral for any
of the Loans. The parties hereby further agree that the Collateral for the
Line Loan and the Term Loan shall serve as collateral for each of said loans,
and to that end, Borrower hereby grants to Lender a lien and security interest
on the Collateral as security for both the Line Note and the Term Note, so that
the Line Loan will be "cross-collateralized" with the Term Loan and vice versa.
Lender and Borrower expressly acknowledge that the collateral pledged to the
Lender under the Real Estate Mortgage Loan shall not in any way secure the Line
Loan or the Term Loan or the Borrower's obligations under the Line Loan or the
Term Loan.
13. Conditions Precedent. Lender shall not be obligated to lend
any monies to Borrower until (i) Lender has received the items listed on
Exhibit "H" which is attached hereto and made a part hereof and (ii) the events
described on Exhibit "H" have occurred.
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement
the day and year first above written.
WITNESSES: PLASMA-THERM, INC., a Florida
corporation ("Borrower")
/s/ Joan Williams
- ---------------------------------
/s/ James E. Harden, Jr.
- ---------------------------------
By: /s/ Diana M. DeFerrari
-------------------------------
Diana M. DeFerrari
Its Senior Vice President
(CORPORATE SEAL)
24
<PAGE> 25
WITNESSES: NATIONSBANK, N.A. (SOUTH), a
national banking association
("Lender")
/s/ Joan Williams
- ----------------------------------
/s/ Diana DeFerrari
- ---------------------------------- By: /s/ James E. Harden, Jr.
------------------------------
James E. Harden, Jr.
Its Vice President
(CORPORATE SEAL)
STATE OF ILLINOIS
COUNTY OF COOK
The foregoing instrument was acknowledged before me this 18th day
of April, 1997, by Diana M. DeFerrari as Senior Vice President of PLASMA-THERM,
INC., a Florida corporation, on behalf of the corporation. She is [ ]
personally known to me or [X] has produced a Florida Driver's License as
identification.
(SEAL)
/s/ Joanne M. Meister
------------------------------
Notary Public
STATE OF ILLINOIS
COUNTY OF COOK
The foregoing instrument was acknowledged before me this 18th day
of April, 1997, by James E. Harden, Jr., as Vice President of NATIONSBANK, N.A.
(SOUTH), a national banking association, on behalf of the association. He is
[ ] personally known to me or [X] has produced a Florida Driver's License as
identification.
(SEAL)
/s/ Joanne M. Meister
------------------------------
Notary Public
25
<PAGE> 26
EXHIBIT "E" ATTACHED TO AND MADE A PART OF THAT CERTAIN CREDIT AGREEMENT DATED
EFFECTIVE APRIL 18, 1997 BY AND BETWEEN PLASMA-THERM, INC., A FLORIDA
CORPORATION ("BORROWER") AND NATIONSBANK, N.A. (SOUTH), A NATIONAL BANKING
ASSOCIATION ("LENDER").
Description of Collateral:
All accounts, accounts receivable and other rights to payment for
goods sold or leased or for services rendered. All equipment purchased with
the proceeds of the Term Loan, including without limitation, all parts,
accessories, attachments, additions and replacements to or with respect to such
equipment, as now owned or hereafter acquired by Borrower.
All proceeds of any kind (including without limitation, proceeds of
insurance policies) of any of the property described herein.
All property of Borrower which is or may hereafter be in Lender's
possession in any capacity, including all monies owed or to be owed by Lender
to Borrower, including but not limited to depository and other accounts.
Permitted Encumbrances: None.
<PAGE> 27
EXHIBIT "F" ATTACHED TO AND MADE A PART OF THAT CERTAIN CREDIT AGREEMENT DATED
EFFECTIVE APRIL 18, 1997 BY AND BETWEEN PLASMA-THERM, INC., A FLORIDA
CORPORATION ("BORROWER") AND NATIONSBANK, N.A. (SOUTH), A NATIONAL BANKING
ASSOCIATION ("LENDER").
Permitted Encumbrances
(a) Liens in favor of Lender.
(b) Liens existing on the date hereof disclosed on Schedule 1 to this
Exhibit F, and provided no Event of Default has occurred and is then
continuing, any renewal, extension or refunding of such Lien in an
amount not exceeding the amount thereof remaining unpaid immediately
prior to such renewal, extension or refunding.
(c) Any Lien on any property securing indebtedness incurred or assumed for
the purpose of financing all or any part of the acquisition cost of
such property (purchase money financing), up to $1,000,000.00 in the
aggregate, per annum), and any refinance thereof.
(d) Liens for taxes not yet due, and Liens for taxes and Liens imposed by
ERISA which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained.
<PAGE> 28
SCHEDULE 1 TO EXHIBIT "F" ATTACHED TO AND MADE A PART OF THAT CERTAIN CREDIT
AGREEMENT DATED EFFECTIVE APRIL 18, 1997 BY AND BETWEEN PLASMA-THERM, INC., A
FLORIDA CORPORATION ("BORROWER") AND NATIONSBANK, N.A. (SOUTH), A NATIONAL
BANKING ASSOCIATION ("LENDER").
7. Uniform Commercial Code Financing Statement in favor of TriCon
Capital, a unit of Greyhound Financial Corporation, File No.
94-0000181635, filed September 6, 1994.
8. Uniform Commercial Code Financing Statement in favor of TriCon
Capital, a unit of Greyhound Financial Corporation, File No.
94-0000190789, filed September 19, 1994.
9. Uniform Commercial Code Financing Statement in favor of TriCon
Capital, a unit of Greyhound Financial Corporation, File No.
95-0000032572, filed February 16, 1995.
<PAGE> 29
EXHIBIT "G-1" ATTACHED TO AND MADE A PART OF THAT CERTAIN CREDIT AGREEMENT
DATED EFFECTIVE APRIL 18, 1997 BY AND BETWEEN PLASMA-THERM, INC., A FLORIDA
CORPORATION ("BORROWER") AND NATIONSBANK, N.A. (SOUTH), A NATIONAL BANKING
ASSOCIATION ("LENDER").
PENSION PLANS
Description of Pension and Welfare Benefit Plans (other than multiemployer
plans) to which Borrower is a party or to which Borrower makes any employer
contributions with respect to employees:
Plasma-Therm, Inc. offers a 401(k) savings plan to employees who have completed
one full year of sevice. The company matches 10% of each dollar invested into
the fund. Employees' contributions are payroll deducted on a pre-tax basis.
Plasma-Therm, Inc. offers employees and their dependents dental insurance and
health insurance, including an HMO and an Indemnity plan.
Plasma-Therm, Inc. provides all full time employees and their dependents life
insurance, including AD&D benefits.
Plasma-Therm, Inc. provides all full time salaried personnel long term
disability insurance which covers absences due to injuries that are not job
related; beyond a six (6) month period of disability.
Plasma-Therm, Inc. provides all full time salaried personnel short term
disability insurance which covers absences due to injuries that are not job
related up to a six (6) month period.
<PAGE> 30
EXHIBIT "G-2" ATTACHED TO AND MADE A PART OF THAT CERTAIN CREDIT AGREEMENT
DATED EFFECTIVE APRIL 18, 1997 BY AND BETWEEN PLASMA-THERM, INC., A FLORIDA
CORPORATION ("BORROWER") AND NATIONSBANK, N.A. (SOUTH), A NATIONAL BANKING
ASSOCIATION ("LENDER").
MULTI-EMPLOYER PLANS
Description of Multiemployer Plans to which Borrower is a party or to which
Borrower makes any employer contributions with respect to employees:
None.
<PAGE> 31
EXHIBIT "H" ATTACHED TO AND MADE A PART OF THAT CERTAIN CREDIT AGREEMENT DATED
EFFECTIVE APRIL 18, 1997 BY AND BETWEEN PLASMA-THERM, INC., A FLORIDA
CORPORATION ("BORROWER") AND NATIONSBANK, N.A. (SOUTH), A NATIONAL BANKING
ASSOCIATION ("LENDER").
Conditions Precedent to Lender's Obligation. Lender shall not be obligated to
lend any monies to Borrower until it has received the items described in a.
through f. below:
(1) Documents, instruments, and agreements described in Section 3 of this
Agreement.
(2) A Written Action of the Board of Directors of Borrower certified by
Borrower's duly elected and acting Secretary authorizing the execution
of this Agreement, the Line Note and the Term Note, security
agreements, financing statements, and other documents referred to
herein.
(3) A UCC search from the Florida Secretary of State showing that the
Collateral is free and clear of all encumbrances.
(4) A copy of any amendments to the Bylaws of Borrower since May 19, 1994,
if any.
(5) A copy of any amendments to the Articles of Incorporation of Borrower
since May 19, 1994.
(6) Casualty insurance policies on Borrower's tangible personal property,
naming Lender as a loss payee thereunder.
<PAGE> 32
SCHEDULE 2.II
EQUIPMENT PURCHASED WITH PROCEEDS
OF TERM LOAN
<TABLE>
<S> <C>
Photomask Program Capital Equipment:
Particle Measurement System Tencor Surfscan 6420 $350,000
KMS-310 RT Critical Dimension Measurement Tool 400,000
MEMS Development Capital Equipment:
Versalock 770 ICP Module 150,000
Thin Film Head Capital Equipment:
Automatic Elipsometer 175,000
----------
Total: $1,075,000
</TABLE>
<PAGE> 33
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the Agreement") executed the 18th day of
April, 1997, by and between PLASMA-THERM, INC., a Florida corporation located
at 10050 16th Street North, St. Petersburg, Florida 33716 (hereinafter called
the "Debtor"), and NATIONSBANK, N.A. (SOUTH), a national banking association
located at 400 North Ashley Drive, 2nd Floor, Tampa, Florida 33602 (hereinafter
called the "Secured Party").
W I T N E S S E T H:
WHEREAS, Debtor is indebted to Secured Party with respect to a certain
Line Loan in the amount of $7,000,000.00 and a certain Term Loan in the amount
of $1,000,000.00, all as more fully described in a certain Credit Agreement of
even date herewith;
WHEREAS, pursuant to the terms of said Credit Agreement and a certain
Commitment Letter dated March 19, 1997, Debtor has agreed to pledge certain
property to Secured Party as collateral for the repayment of the Term Loan and
the Line Loan;
WHEREAS, Secured Party and Debtor desire to enter into this Agreement
to provide for the pledging by Debtor to Secured Party of the collateral for
the repayment of said Loans;
NOW, THEREFORE, in consideration of the covenants and conditions
stated in this Agreement, the parties agree as follows:
1. Security Interest. For value received, Debtor hereby grants
Secured Party a security interest (the "Security Interest") in and to all of
the following accounts and equipment, whether now owned or hereafter acquired,
and in all proceeds and products thereof, in any form, including, without
limitation, proceeds of insurance policies from the loss thereof (hereinafter
called the "Collateral"):
.1 Accounts. All accounts now owned or hereafter
acquired by Debtor, including but not limited to accounts receivable and other
rights to payment for goods sold or leased or for services rendered.
.2 Equipment. All equipment purchased with the proceeds
of the Term Loan including, without limitation, all parts, accessories,
attachments, additions and replacements to or with respect to such equipment,
as such equipment and other items are now owned or hereafter acquired.
2. INDEBTEDNESS SECURED. This Agreement and the Security
Interest secure, payment of the following described indebtedness of Debtor, and
whether the indebtedness is
1
<PAGE> 34
from time to time reduced and thereafter increased or entirely extinguished and
thereafter reincurred, and including any sums advanced and any expenses
incurred by Secured Party pursuant to this Agreement or pursuant to any other
Loan Documents (as used herein such term shall have the same meaning as in the
Credit Agreement dated of even date herewith) or in any Interest Rate
Protection Agreement (as used herein such term shall have the same meaning as
in the Credit Agreement dated of even date herewith) or any other note or
evidence of indebtedness (all of which is herein sometimes referred to as the
"Indebtedness"):
.1 Term Promissory Note dated of even date herewith in
the original principal amount of $1,000,000.00 (the "Term Note");
.2 Line of Credit Promissory Note dated of even date
herewith in the original principal amount of $7,000,000.00 (the "Line of Credit
Note");
3. Representations and Warranties of Debtor. Debtor represents
and warrants and, so long as any portion of the Indebtedness remains unpaid,
shall be deemed continuously to represent and warrant that:
.1 Debtor is the owner of the Collateral free of all
security interests or other encumbrances and claims of third persons except the
Security Interest and the Permitted Encumbrances (as defined in the Credit
Agreement dated of even date herewith);
.2 Debtor is authorized to enter into this Agreement and
into the transactions evidenced by the Term Note, the Line of Credit Note and
the Loan Documents;
.3 The Collateral is used or bought for use primarily in
business operations;
.4 Each account constituting the Collateral is genuine
and enforceable in accordance with its terms against the party obligated to pay
the same (the "Account Debtor");
.5 To the best of Debtor's knowledge, the amount
represented by Debtor to Secured Party as owing by each Account Debtor and by
all the Account Debtors is the correct amount actually and unconditionally
owing by such Account Debtor(s), except for reserves as reflected on the
Debtor's financial statements and normal cash discounts where applicable;
.6 To the best of Debtor's knowledge, no Account Debtor
has any defense, set-off, claim or counterclaim against Debtor which can be
asserted against Secured Party, whether in any proceeding to enforce the
Security Interest or otherwise;
.7 Debtor is engaged in business operations which are
carried on at the address specified on the first page of this Agreement;
2
<PAGE> 35
.8 Debtor's records concerning that part of the
Collateral consisting of accounts or chattel paper are kept at the address
specified on the first page hereof, which is Debtor's chief executive office
and principal place of business.
4. Covenants of Debtor. Debtor covenants that so long as any
Indebtedness remains unpaid, Debtor:
.1 Will defend the Collateral against the claims and
demands of all other parties except purchasers and lessees of inventory in the
ordinary course of business, including without limitation defenses, set-offs,
claims and counterclaims asserted by any Account Debtor against Debtor or
Secured Party;
.2 Will keep the Collateral free from all security
interests, liens and other encumbrances except the Security Interest and the
Permitted Encumbrances (as defined in the Credit Agreement dated of even date
herewith);
.3 Will not sell, pledge, transfer, assign, deliver, or
otherwise dispose of any Collateral or any interest therein without the prior
written consent of Secured Party;
.4 Will keep in accordance with generally accepted
accounting principles, consistently applied, accurate and complete records
concerning the Collateral; at Secured Party's request will mark any of such
records and all or any of the Collateral to give notice of the Security
Interest; will, upon request made from time to time and upon reasonable advance
notice, permit Secured Party or its agents to inspect the Collateral and to
audit and make abstracts of such records or any of Debtor's books, ledgers,
reports, correspondence, and other records; and will, upon request made from
time to time, deliver to Secured Party such financial statements and other
accounting data as may be reasonably requested by Secured Party concerning
Debtor;
.5 Upon demand will deliver to Secured Party any other
documents representing or relating to purchases or other acquisitions or sales,
leases, or other dispositions of the Collateral and proceeds thereof and any
and all other schedules, documents, and statements which Secured Party may from
time to time request;
.6 Will notify Secured Party in writing at least thirty
(30) days in advance of any change in Debtor's address specified on the first
page hereof, of any change in the location or of any additional locations at
which the Collateral is kept, of any change in the address at which records
concerning the Collateral are kept and of any change in the location of
Debtor's residence, chief executive office or principal place of business;
.7 Without Secured Party's written consent will not make
or agree to make any amendment, alteration, modification, or cancellation of or
substitution for or credits, adjustments, or allowances on any Collateral,
except in the ordinary course of business;
3
<PAGE> 36
.8 Will execute and deliver to Secured Party such
financing statements and other documents requested by Secured Party and take
such other action as Secured Party may deem advisable to perfect the Security
Interest and will pay all costs, including without limitation recording fees
and document stamps, of title searches and filing financing statements and
other documents in all public offices;
.9 Will pay or cause to be paid when due all taxes,
assessments and other charges of every nature which may be levied or assessed
against this transaction or the Collateral;
.10 Will insure the Collateral against risks by obtaining
policies naming Secured Party as loss payee (none of which shall be cancelable
without at least thirty (30) days' notice to Secured Party) in coverage, form
and amount and with companies satisfactory to Secured Party and will deliver
each policy or certificate of insurance together with the loss payee
endorsement therefor to Secured Party;
.11 Will (unless delivered to Secured Party pursuant to
the provisions hereof) retain the Collateral in its control and will keep the
Collateral in good condition and repair, reasonable wear and tear excepted, and
will not use the Collateral in violation of any provisions of this Agreement,
of any other Loan Document, or of any applicable statute, regulation or
ordinance, or of any policy of insurance insuring the Collateral;
.12 Will prevent the Collateral or any part thereof from
being or becoming an accession to other goods not covered by this Agreement;
.13 Will prevent each item of Collateral from becoming a
fixture; and
.14 Will keep all of the Collateral constituting
equipment at the address specified on the first page hereof and not move any of
such Collateral from said location without the prior written consent of Secured
Party;
.15 Will, upon request of Secured Party, endorse,
negotiate, transfer, deliver and/or assign any or all accounts which are part
of the Collateral to Secured Party or its order in order to assure Secured
Party's perfection of the Security Interest.
5. Verification of Collateral. After an Event of Default,
Secured Party shall have the right to verify any Collateral in any manner and
through any medium which Secured Party may consider appropriate and Debtor
shall furnish such assistance and information and perform such acts as Secured
Party may require in connection therewith.
6. Future Advances. It is agreed that any additional sum or sums
advanced by the then holder of any note secured hereby to or for the benefit of
Debtor, whether such advances are obligatory or are made at the option of
Secured Party or otherwise, at any time
4
<PAGE> 37
from the date of this Agreement, with interest thereon at the rate agreed upon
at the time of each additional loan or advance, shall be equally secured with
and have the same priority as the original Indebtedness and be subject to all
of the terms and provisions of this Agreement, whether or not such additional
loan or advance is evidenced by a promissory note of Debtor and whether or not
identified by a recital that it is secured by this Agreement.
7. Default.
.1 Events of Default. Any of the following events or
conditions shall constitute an Event of Default:
.1 Non-payment when due after any applicable
grace period, whether by acceleration or otherwise of any Indebtedness;
.2 Failure by Debtor to perform any obligations
under this Agreement and such failure is not cured within thirty (30) days of
the written notice of such failure by Secured Party to Debtor;
.3 An Event of Default under the Term Note, the
Line of Credit Note, any Loan Document, or any evidence of the Indebtedness;
.4 The occurrence of an Event of Default under
the Credit Agreement dated of even date herewith;
.5 Sale or transfer by Debtor of a majority of
its assets other than in the normal course of business;
.6 Condemnation or seizure of any of the
Collateral;
.7 Failure by Debtor at any time to be a
corporation in active status with the State of Florida; and
.8 Non-payment when due after any applicable
grace period, whether by acceleration or otherwise of the Real Estate Mortgage
Loan (as used herein such term shall have the same meaning as in the Credit
Agreement dated of even date herewith), or failure by Debtor to perform after
applicable grace periods, any obligations under the Real Estate Mortgage Note
(as used herein such term shall have the same meaning as in the Credit
Agreement dated of even date herewith), or any instrument of security securing
said Real Estate Mortgage Loan.
.2 Rights and Remedies Upon Default. Secured Party may
declare Debtor to be in default hereunder and all or any part of the
Indebtedness or the indebtedness due under the Real Estate Mortgage Loan to be
immediately due without notice upon the happening of any Event of Default. The
rights and remedies of Secured Party as set forth in
5
<PAGE> 38
this Agreement and in this section are in addition to any other rights that
Secured Party might have with respect to any Indebtedness which is payable,
upon demand. Upon the happening of any Event of Default, Secured Party's
rights with respect to the Collateral shall be those of a secured party under
the Uniform Commercial Code as enacted in Florida and any other applicable law
from time to time in effect. Secured Party shall also have any additional
rights granted herein and in any other agreement now or hereafter in effect
between Debtor and Secured Party or otherwise granted by law or equity. If
requested by Secured Party, Debtor will assemble the Collateral and make it
available to Secured Party at a place to be designated by Secured Party.
Without limiting the generality of the foregoing, Debtor
expressly agrees that, after an Event of Default, Secured Party may (i)
lawfully enter any premises where any Collateral may be without judicial
process and take possession of the Collateral and (ii) sell, lease or otherwise
dispose of the Collateral in a commercially reasonable manner.
.3 Notice. Debtor agrees that any notice by Secured
Party of the sale or disposition of the Collateral or any other intended action
hereunder, whether required by the Uniform Commercial Code or otherwise, shall
constitute reasonable notice to Debtor if the notice is mailed by regular or
certified mail, postage prepaid, at least five (5) days before the action to
Debtor's address as specified in this Agreement or to any other address which
Debtor has specified in writing to Secured Party as the address to which
notices shall be given to Debtor.
.4 Costs. Debtor shall pay all costs and expenses
incurred by Secured Party in enforcing this Agreement, realizing upon any
Collateral and collecting any Indebtedness. Costs and expenses will include
all reasonable attorney's fees (as defined in the Term Note and the Line of
Credit Note).
.5 Deficiency. In the event that the proceeds of the
Collateral are insufficient to satisfy the entire unpaid Indebtedness, Debtor
will be responsible for the deficiency and shall pay the same upon demand.
8. Miscellaneous.
.1 Perfection of Security Interest. Debtor authorizes
Secured Party at Debtor's expense to file any financing statement or statements
relating to the Collateral (with or without Debtor's signature thereon), and to
take any other acts deemed appropriate by Secured Party to perfect and to
continue perfection of the Security Interest. Debtor hereby irrevocably
appoints Secured Party as its attorney in fact to execute financing statements
in Debtor's name and to perform all other acts which Secured Party deems
appropriate to perfect and protect the Security Interest. Such appointment is
binding and coupled with an interest. Upon request of Secured Party before or
after the occurrence of an Event of Default, Debtor agrees to give Secured
Party possession of any Collateral, possession of which
6
<PAGE> 39
is, in Secured Party's opinion, necessary or desirable to perfect or continue
perfection or priority of the Security Interest.
.2 Continuing Agreement. This Agreement is a continuing
agreement which shall remain in force until all of the Indebtedness contracted
for or created and any extensions or renewals on that Indebtedness together
with all interest thereon has been paid in full.
.3 Right to Proceeds. Upon the occurrence of an Event
of Default, Secured Party may demand, collect, and sue for all proceeds (either
in Debtor's or Secured Party's name at the latter's option) with the right to
enforce, compromise, settle, or discharge any proceeds. Such appointment is
binding and coupled with an interest. Debtor hereby irrevocably appoints
Secured Party upon occurrence of an Event of Default as Debtor's
attorney-in-fact to indorse Debtor's name on all checks, commercial paper, and
other instruments pertaining to the proceeds. Debtor also authorizes Secured
Party to collect and apply against the Indebtedness any refund of insurance
premiums or any insurance proceeds payable on account of the loss of or damage
to any of the Collateral and hereby appoints Secured Party as Debtor's
attorney-in-fact to indorse any check or draft representing such proceeds or
refund. After an Event of Default, Secured Party may notify any party
obligated to pay proceeds of the existence of the Security Interest and may
also direct them to make payments of all proceeds to Secured Party.
.4 Property In Secured Party's Possession. As further
security for the repayment of the Indebtedness, Debtor grants to Secured Party
a security interest in all property of Debtor which is or may hereafter be in
Secured Party's possession in any capacity, including all monies owed or to be
owed by Secured Party to Debtor; and with respect to all of such property,
Secured Party shall have the same rights as it has with respect to the
Collateral.
.5 Set-off. Without limiting any other right of Secured
Party, whenever Secured Party has the right to declare any Indebtedness to be
immediately due and payable (whether or not it has so declared), Secured Party
may set off against the Indebtedness all monies then owed to Debtor by Secured
Party in any capacity whether due or not and Secured Party shall be deemed to
have exercised its right of set-off immediately at the time its right to such
election accrues.
.6 Failure to Perform; Reimbursement. Upon Debtor's
failure to perform any of its duties hereunder or under any other Loan
Document, Secured Party may, but it shall not be obligated to, perform any of
such duties and Debtor shall forthwith upon demand reimburse Secured Party for
any expense incurred by Secured Party in doing so.
.7 Non-Waiver: Cumulative Rights. No delay or omission
by Secured Party in exercising any right hereunder or with respect to any
Indebtedness shall operate as a waiver of that or any other right, and no
single or partial exercise of any right shall preclude
7
<PAGE> 40
Secured Party from any other or future exercise of the right or the exercise of
any other right or remedy. Secured Party may cure any default by Debtor in any
reasonable manner without waiving the default so cured and without waiving any
other prior or subsequent default by Debtor. All rights and remedies of
Secured Party under this Agreement, under the Uniform Commercial Code, or
otherwise shall be deemed cumulative, and exercisable concurrently.
.8 Third Parties. Secured Party shall have no
obligation to take and Debtor shall have the sole responsibility for taking any
steps to preserve rights against all prior parties to any proceeds of the
Collateral.
.9 Waiver of Notice of Dishonor or Protest, etc. Debtor
waives notice of dishonor or protest, presentment, demand for payment and
protest of any instrument constituting Collateral at any time held by Secured
Party on which Debtor is in any way liable.
.10 Rights of Acquiring Parties. The rights and benefits
of Secured Party under this Agreement shall, if Secured Party agrees, inure to
any party acquiring an interest in the Indebtedness or any part thereof. This
Agreement is not assignable by Debtor without the prior written consent of
Secured Party.
.11 Definitions; Multiple Parties; Section Headings. The
term "person" when referred to herein shall mean an individual, partnership,
corporation or any other legal entity. The terms "Secured Party" and "Debtor"
as used in this Agreement include the heirs, personal representatives, and
successors or assigns of these parties. If more than one Debtor executes this
Agreement, the term "Debtor" includes each of the Debtors as well as all of
them, and their obligations under this Agreement shall be joint and several.
Whenever the context so requires the neuter gender includes the feminine and/or
masculine and the singular number includes the plural. Unless the context
requires otherwise, terms used herein shall have the same meaning as defined in
the Uniform Commercial Code as enacted by the State of Florida. Section
headings are used herein for convenience only and do not alter or limit the
meaning of the language contained in each section.
.12 Amendment; Waiver. This Agreement may not be
modified or amended nor shall any provision of it be waived except by a written
instrument signed by Debtor and by an authorized officer of Secured Party.
.13 Choice of Law. This Agreement shall be construed
under applicable Florida laws in effect from time to time and shall be
enforceable, at the option of Secured Party, in a court of competent
jurisdiction in Pinellas County, Florida, notwithstanding the location of the
Collateral.
.14 Further Assurances. Debtor agrees that, at any time
and from time to time after the execution and delivery of this Agreement,
Debtor shall, upon request of Secured Party, execute and deliver such further
documents and do such further acts and
8
<PAGE> 41
things as Secured Party may reasonably request in order to fully effect the
purposes of this Agreement and to protect Secured Party's interest in the
Collateral.
.15 Expenses. Debtor shall pay all costs and expenses
relating to this Agreement and the Indebtedness, except for those expenses
which Secured Party has agreed to pay pursuant to the Commitment Letter dated
March 19, 1997.
.16 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 OR 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 INSTRUMENT, AGREEMENT OR DOCUMENT 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.
.1 SPECIAL RULES. THE ARBITRATION SHALL BE
CONDUCTED IN THE COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION
OF THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR IF THERE IS REAL OR PERSONAL
PROPERTY COLLATERAL, IN THE COUNTY WHERE SUCH REAL OR PERSONAL PROPERTY IS
LOCATED, 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.
.2 RESERVATION OF RIGHTS. NOTHING IN THIS
ARBITRATION PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY
OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED
IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY BANK OF THE
PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT
STATE LAW; OR (III) LIMIT THE
9
<PAGE> 42
RIGHT OF 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. 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.
.17 Consent of Secured Party. Whenever consent of
Secured Party is required under this Agreement, such consent may be withheld by
Secured Party in its reasonable discretion.
.18 Notices. All notices provided for herein shall be in
writing, and may be by hand (or courier) delivery, overnight mail, telecopier,
facsimile, or by certified or registered receipt requested mail, addressed as
follows:
SECURED PARTY: NATIONSBANK, N.A. (SOUTH), a
national banking association
400 North Ashley Drive, 2nd Floor
Tampa, Florida 33602
Attention: James E. Harden, Jr.
Telephone: (813) 224-5147
Telecopy: (813) 224-5770
DEBTOR: PLASMA-THERM, INC., a Florida
corporation
10050 16th Street North
St. Petersburg, Florida 33716
Attention: Diana DeFerrari
Telephone: (813) 577-4999
Telecopy: (813) 577-6844
Notice to any party shall be deemed complete upon the occurrence of any one of
the following: (i) hand delivery to said party, (ii) completion of transmission
by telecopy or, facsimile of said notice, (iii) one business day after sending
said notice by overnight mail or, (iv) five business days after depositing the
same with the United States Postal Service, addressed to that party with the
proper amount of postage affixed thereto, if sent by
10
<PAGE> 43
registered or certified mail, return receipt requested. Receipt of any notice
by any of the persons listed above to receive notices to a party shall
constitute actual receipt of such notice by that party.
.19 Superseding Agreement. As to the Line Loan, the Term
Loan and the Real Estate Mortgage Loan (as said terms are defined in the Credit
Agreement), this Agreement supersedes and completely replaces that certain
Amended and Restated Security Agreement by Borrower and Lender dated January
19, 1995, as amended from time to time.
9. Notification of Account Debtors. After an Event of Default,
Secured Party may notify all or any Account Debtors of the Security Interest
and may also direct such Account Debtors to make all payments on the Collateral
to Secured Party and to perform the terms of any Collateral for the benefit of
Secured Party. Debtor shall, upon request, assist Secured Party in such
notification and direction. All payments on and other proceeds from the
Collateral received by Secured Party directly or from Debtor shall be applied
to the Indebtedness in such order and manner and at such time as Secured Party
shall in its sole discretion determine. Upon notice by Secured Party to
Debtor, any payments on or other proceeds of the Collateral received by Debtor
before or after notification to Account Debtors shall be held by Debtor in
trust for Secured Party in the same medium in which received, shall not be
commingled with any assets of Debtor and shall be turned over to Secured Party
not later than the next business day following the day of their receipt.
Debtor shall also promptly notify Secured Party of the return to or
repossession by Debtor of goods underlying any Collateral.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
WITNESSES: PLASMA-THERM, INC., a Florida
corporation ("Debtor")
/s/ Joan Williams
- ------------------------------
By: /s/ Diana M. DeFerrari
-----------------------------------
/s/ James E. Harden, Jr. Diana M. DeFerrari
- ------------------------------ Senior Vice President
(CORPORATE SEAL)
11
<PAGE> 44
NATIONSBANK, N.A. (SOUTH), a national
banking association ("Secured Party")
WITNESSES
By: /s/ James E. Harden, Jr.
/s/ Joan Williams --------------------------------
- ----------------------------- James E. Harden, Jr.
Vice President
/s/ Diana M. DeFerrari
- ----------------------------- (CORPORATE SEAL)
12
<PAGE> 45
STATE OF ILLINOIS
COUNTY OF COOK
The foregoing instrument was acknowledged before me this 18th day
of April, 1997, by Diana M. DeFerrari as Senior Vice President of PLASMA-THERM,
INC., a Florida corporation, on behalf of the corporation. She is [ ]
personally known to me or [X] has produced a Florida Driver's License as
identification.
(SEAL) /s/ Joanne M. Meister
-----------------------------
Notary Public
STATE OF ILLINOIS
COUNTY OF COOK
The foregoing instrument was acknowledged before me this 18th day
of April, 1997, by James E. Harden, Jr., as Vice President of NATIONSBANK, N.A.
(SOUTH), a national banking association, on behalf of the association. He is
[ ] personally known to me or [X] has produced a Florida Driver's License as
identification.
(SEAL)
/s/ Joanne M. Meister
-----------------------------
Notary Public
13
<PAGE> 46
LINE OF CREDIT PROMISSORY NOTE
Chicago, Illinois
$7,000,000.00 April 18, 1997
FOR VALUE RECEIVED, the undersigned PLASMA-THERM, INC., a Florida
corporation (hereinafter called "Borrower") promises to pay to the order of
NATIONSBANK, N.A. (SOUTH), a national banking association (hereinafter
sometimes referred to as "Lender" and together with any holder hereof called
"Holder"), at 400 N. Ashley Drive, 2nd Floor, Tampa, Florida 33602, or at such
other place as Holder may from time to time designate in writing, the principal
sum of SEVEN MILLION AND NO/100 DOLLARS ($7,000,000.00), or so much thereof as
has been advanced hereunder, together with interest on the unpaid balance of
the principal (the "Loan") from time to time outstanding from the date of each
advance of principal at the rate for each day equal to the "Variable Adjusted
LIBOR Rate" (as hereinafter defined) as determined by Lender and adjusted
daily, plus two percent (2%) per annum. In no event, however, shall the
interest rate be greater than the maximum rate of interest allowed to be
contracted for by applicable law. The term "Variable Adjusted LIBOR Rate"
means the interest rate per annum determined in accordance with the following
definitions and procedures:
a. The "LIBOR Rate" for a particular day shall be the interest
rate as published in the final New York edition of The Wall Street Journal as
the appropriate London InterBank Offered Rate (LIBOR) for such particular day
for a non-domestic certificate of deposit in an amount approximately equal to
the amount of the Note having a term of thirty (30) days, or if The Wall Street
Journal is not published on any such date, then as published therein for the
immediately preceding business day provided, however, that in the event that
The Wall Street Journal is not published, or does not report the London
InterBank Offered Rate, for three consecutive business days, then the "LIBOR
Rate" shall be deemed to be the interest rate which it would be necessary for
Lender to pay in connection with a sale by Lender, if possible, of a
certificate of deposit for a non-domestic deposit in an amount approximately
equal to the amount of the Note and having a term of thirty (30) days.
b. The "Variable Adjusted LIBOR Rate" for a particular day shall
be equal to the quotient of (1) the LIBOR Rate divided by (2) the difference of
(a) one minus (b) the maximum rate (expressed as a decimal) of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable from time to time to any
member bank of the Federal Reserve System, in respect to Eurocurrency
liabilities as specified in Regulation D (or any successor category of
liabilities under Regulation D). The computation of the Variable Adjusted
LIBOR Rate shall also include such adjustments as may be necessary in respect
to impositions on Lender for Federal Deposit Insurance Corporation insurance
and other insurance, fees, assessments and surcharges which
1
<PAGE> 47
occur because of Lender's sale of a certificate of deposit which would
establish the LIBOR Rate or for insuring time deposits.
c. The LIBOR Rate used in determining the Variable Adjusted LIBOR
Rate for a particular day shall be the LIBOR Rate for such day if the interest
rate is published in The Wall Street Journal as specified in clause (a) above,
and otherwise shall be the LIBOR Rate which is two "business days" prior to the
date of determination, or if such day is not a business day, then the next
preceding business day.
d. A "business day" for purposes of determination of Lender's
Variable Adjusted LIBOR Rate shall mean any day on which Lender is open in
Charlotte, North Carolina for the transaction of domestic and foreign exchange
business. Each determination by Lender of the Variable Adjusted LIBOR Rate
shall, in the absence of manifest error, be conclusive and binding.
Interest owing under this Note shall be computed on the basis of a
360-day year.
Principal and interest shall be due and payable as follows:
e. Accrued interest only, as stated above, shall be
payable monthly commencing on the last day of May, 1997, and continuing on the
last day of each month thereafter until May 19, 1998, at which time all
outstanding indebtedness, whether principal, accrued interest or otherwise,
shall be due and payable in full.
f. The principal amount evidenced hereby may be borrowed
(and to the extent any principal amount advanced hereunder is repaid by
Borrower, such sum may be borrowed again) prior to May 19, 1998, but only in
accordance with the terms of that Credit Agreement dated April 18, 1997, and
only if this Note is not in default as hereinafter defined. At no time,
however, shall the principal balance outstanding hereunder exceed SEVEN MILLION
AND NO/100 DOLLARS ($7,000,000.00).
Borrower may prepay all or part of the principal balance at any time
without penalty. Such prepayment shall be accompanied by payment of any unpaid
interest accrued to the time of such prepayment. All payments made hereunder
shall at Holder's option first be applied to late charges, then to accrued
interest, then to principal.
Permitted partial prepayments shall not affect or vary the duty of
Borrower to pay all obligations when due, and they shall not affect or impair
the right of Holder to pursue all remedies available to it hereunder, under the
security instruments securing this indebtedness, or under any other loan
documents or guaranty executed in connection herewith.
If any event of default set forth in this Note or in any of the Loan
Documents (as defined herein) shall occur, or in the event Lender has, in
accordance with the terms of the
2
<PAGE> 48
Note or the Loan Documents, made a demand for repayment of the indebtedness
evidenced by this Note and the Loan Documents, Lender, at its option, may
notify Borrower that its commitment to lend under this line of credit is
terminated and Lender shall be relieved of all obligations to lend any further
sums thereafter to Borrower.
This Note is secured by a certain Security Agreement of even date
herewith which, together with this Note, the Credit Agreement, and all other
agreements, instruments and documents delivered in connection herewith, are
hereinafter sometimes referred to as the "Loan Documents."
This Note and the Loan Documents are to be governed by and construed
under the laws of the State of Florida and of the United States of America, and
the rules and regulations promulgated under the authority thereof. It is the
intent of this Note that such laws shall be interpreted in such a manner that
the maximum rate of interest allowed to be contracted for by applicable law as
changed from time to time which is applicable to this Note (hereinafter called
the "Maximum Rate") be as great as possible. The interest due hereunder is
being charged pursuant to the provisions of The Florida Banking Code (as
defined by statute), and Chapter 687 Florida Statutes. In the event that any
law, rule or regulation of the United States of America or the State of
Florida, as changed from time to time, allows interest to be contracted for at
a rate that is greater than the rate permitted by The Florida Banking Code (as
defined by statute), and Chapter 687, Florida Statutes, then such law, rule or
regulation shall apply. References to laws, statutes, rules and regulations in
this Note refer to such as amended from time to time.
In the event that any payment of principal or interest is not made
within ten (10) days after the same become due hereunder, it is hereby agreed
that Holder shall have the option of collecting a late charge equal to four
percent (4%) of the amount of each such delinquent payment. Said late charge
and/or interest shall be immediately due and payable in full on demand by
Holder.
In no event shall Holder have the right to charge or collect, nor
shall Borrower be required or obligated to pay, interest or payments in the
nature of interest, which would result in interest being charged or collected
at a rate in excess of the Maximum Rate. In the event that any payment which
is interest or in the nature of interest is made by Borrower or received by
Holder which would result in the rate of interest being charged or collected by
Holder being in excess of the Maximum Rate, then the portion of any such
payment which causes the rate of interest being charged or collected by Holder
to exceed the Maximum Rate (hereinafter called the "excess sum") shall be
credited as a payment of principal. If Borrower notifies Holder in writing
that Borrower elects to have such excess sum returned to Borrower, such excess
sum shall be returned to Borrower. In the event that any such overcharge is
discovered after this Note has been paid in full, then the amount of such
excess sum shall be returned to Borrower together with interest thereon from
the date such excess sum was paid or collected at the same rate as was due
Holder during such period under the terms of this
3
<PAGE> 49
Note. All excess sums credited to principal shall be credited as of the date
paid to Holder. It is recognized by Borrower that the Maximum Rate may vary
from time to time, and that from time to time the Maximum Rate may be
uncertain. Therefore, Holder may seek judicial determination of the applicable
rate of interest. In such event, the withholding of credit to principal or the
withholding of payment to Borrower of any proposed excess sum during the period
of judicial determination (including all appeals) shall not be deemed a breach
of the obligations of Holder hereunder or of applicable law. It is the intent
of Holder to conform strictly to the limitations of applicable laws governing
the charging and collection of interest as changed from time to time.
The "Default Interest Rate" shall be a rate equal to three percent
(3%) above the rate of interest required to be paid by the terms of this Note.
Holder shall have the optional right to declare the amount of the
total unpaid balance hereof to be due and forthwith payable in advance of the
maturity date of any sum due or installment, as fixed herein, upon the
occurrence of an event of default. An event of default shall be deemed to
occur under this Note upon the failure of Borrower to pay, within fifteen (15)
days after the same become due, any of the installments of interest or
principal, or other sums due hereunder, or upon the occurrence of any other
default under or failure to perform by any party (other than Holder) in
accordance with any of the terms and conditions of this Note within thirty (30)
days after notice of such default or failure from Holder or upon the occurrence
of any default under or failure to perform by any party (other than Holder) in
accordance with any of the terms and conditions of any of the Loan Documents
after the expiration of any applicable grace period, or upon the default under
or the failure of Borrower to perform in accordance with any and all notes,
obligations, instruments or documents between Borrower and Lender after any
applicable grace period (including but not limited to that certain Term
Promissory Note by Borrower in favor of Lender in the principal amount of
$1,000,000.00 dated simultaneously herewith and that certain Promissory Note by
Borrower in favor of Lender in the original principal amount of $3,375,000.00
dated August 14, 1995). Upon exercise of any of these options by Holder, the
entire unpaid principal balance shall bear interest at the "Default Interest
Rate." In addition to the rights described in this paragraph, Holder shall have
the right to exercise all other rights or remedies provided by law or at equity
or as provided in any of the Loan Documents and shall specifically have the
right to recover all damages resulting from such default including, without
limitation, the right to recover the payment of all amounts owing to Holder.
Exercise of any of these options shall be without any additional notice to
Borrower, notice of such exercise being hereby expressly waived.
Time is of the essence hereunder. In the event that this Note is
collected by law or through attorneys at law, or under advice therefrom,
Borrower and any other person liable for payment hereof hereby, severally and
jointly, agree to pay all costs of collection, including reasonable
out-of-pocket attorneys' fees and costs (including charges for paralegals and
others working under the direction or supervision of Holder's attorneys) and
all sales or use taxes
4
<PAGE> 50
thereon, whether or not suit is brought, and whether incurred in connection
with collection, trial, appeal, bankruptcy or other creditors' proceedings or
otherwise, and, if Holder's attorneys shall include employees of Holder or of
any person controlling, controlled by or under common control with Holder, such
reasonable attorney's fees shall include costs allocated by Holder's or such
person's internal legal department.
Borrower authorizes Holder, when payment is due, to set off for any
payment of principal or interest past due hereunder for the amount of such
payment of principal or interest. Exercise of this right shall be optional
with Holder and the provisions of this paragraph shall not be construed as
releasing Borrower from the obligation to make payments of principal or
interest according to the terms hereof.
The remedies of Holder as provided herein and in the Loan Documents
shall be cumulative and concurrent, and may be pursued singularly,
successively, or together, at the sole discretion of Holder. No act of
omission or commission of Holder, including specifically any failure to
exercise any right, remedy or recourse, shall be deemed to be a waiver or
release of the same, such waiver or release to be effected only through a
written document executed by Holder and then only to the extent specifically
recited therein. A waiver or release with reference to any one event shall not
be construed as continuing, as a bar to, or as a waiver or release of, any
subsequent right, remedy or recourse as to a subsequent event.
All persons (including corporations) now or at any time liable whether
primarily or secondarily, for the payment of the indebtedness hereby evidenced,
for themselves, their heirs, legal representatives, successors and assigns,
respectively, hereby (a) expressly waive any presentment, demand for payment,
notice of dishonor, protest, notice of nonpayment or protest, and diligence in
collection; (b) consent that Holder may, from time to time and without notice
to them or demand, (i) extend, rearrange, renew or postpone any or all payments
and/or (ii) release, exchange, add to or substitute all or any part of the
collateral for this Note, without in any way modifying, altering, releasing,
affecting or limiting their respective liability or the lien of any security
instrument; (c) agree that Holder, in order to enforce payment of this Note
against them shall not be required first to institute any suit or to exhaust
any of its remedies against Borrower or any other person or party or to attempt
to realize on the collateral for this Note.
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 OR
ANY SUCCESSOR THEREOF
5
<PAGE> 51
("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
INSTRUMENT, AGREEMENT OR DOCUMENT 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.
B. SPECIAL RULES. THE ARBITRATION SHALL BE
CONDUCTED IN THE COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION
OF THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR IF THERE IS REAL OR PERSONAL
PROPERTY COLLATERAL, IN THE COUNTY WHERE SUCH REAL OR PERSONAL PROPERTY IS
LOCATED, 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.
C. RESERVATION OF RIGHTS. NOTHING IN THIS
ARBITRATION PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY
OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED
IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY 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 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. 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.
6
<PAGE> 52
Borrower acknowledges that the above paragraphs have been expressly
bargained for by Holder as part of the Loan evidenced hereby and that, but for
Borrower's agreement and the agreement of any other person liable for payment
hereof thereto, Holder would not have extended the Loan for the term and with
the interest rate provided herein.
If more than one party shall execute this Note, the term "Borrower",
as used herein, shall mean all parties signing this Note and each of them, who
shall be jointly and severally obligated hereunder. In this Note, whenever the
context so requires, the neuter gender includes the feminine and/or masculine,
as the case may be and the singular number includes the plural.
IN WITNESS WHEREOF Borrower has caused this Note to be executed in its
name on the day and year first above written.
PLASMA-THERM, INC., a Florida
corporation ("Borrower")
By: /s/ Diana M. DeFerrari
--------------------------------
Diana M. DeFerrari
Senior Vice President
(CORPORATE SEAL)
STATE OF ILLINOIS
COUNTY OF COOK
The foregoing instrument was acknowledged before me this 18th day
of April, 1997, by Diana M. DeFerrari as Senior Vice President of PLASMA-THERM,
INC., a Florida corporation, on behalf of the corporation. She is [ ]
personally known to me or [X] has produced a Florida Driver's License as
identification.
(SEAL)
/s/ Joanne M. Meister
-----------------------------
Notary Public
7
<PAGE> 53
AGREEMENT
This Agreement dated April 18, 1997, by and between NATIONSBANK, N.A.
(SOUTH), a national banking association (the "Bank"), whose address is 400
North Ashley Drive, 2nd Floor, Tampa, Florida 33602 and PLASMA-THERM, INC., a
Florida corporation (the "Borrower"), whose address is 10050 16th Street North,
St. Petersburg, Florida 33716;
WHEREAS, Borrower desires to obtain certain loans (together with all
extensions and renewals thereof hereafter referred to as the "Loans") in the
combined amount of $8,000,000.00 from Bank as described in a certain Credit
Agreement of even date herewith; and
WHEREAS, Bank is willing to grant the Loans provided Borrower agrees
not to encumber certain personal property;
NOW, THEREFORE, for and in consideration of the Loans made or to be
made by Bank to Borrower, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by both Borrower and
Bank, the parties hereto do agree as follows:
1. Property. Borrower hereby agrees that, for so long as any part
of the Loans remains outstanding, that it will not, without first obtaining the
prior written consent of Bank, create or permit any lien, encumbrance, charge,
or security interest of any kind to exist on its inventory, defined as goods
held for sale or lease or to be furnished under contracts of service, or raw
materials, work-in-process or materials used or consumed in a business, as now
owned or hereafter acquired, except for Permitted Encumbrances (as defined in
the Credit Agreement of even date).
<PAGE> 54
2. Recording. Bank is hereby authorized and permitted to cause
a UCC-1 financing statement reflecting the provisions of this Agreement to be
recorded at such time and at such place as Bank, at its option, may elect.
3. Representations and Warranties of Borrower. Borrower
represents and warrants to Bank as follows:
a. That Borrower owns the personal property referenced
above and there are no existing liens or encumbrances upon or affecting such
property, except for Permitted Encumbrances (as defined in the Credit Agreement
of Even date).
b. Borrower is a corporation duly organized and validly
existing and in active status under the laws of the State of Florida and has
all requisite power and authority to enter into this Agreement.
c. The execution and delivery by Borrower of this
Agreement and the notes (the "Notes") evidencing the Loans and the performance
of the respective obligations hereunder and thereunder have been duly
authorized. This Agreement and the Notes constitute the legal valid and
binding obligation of Borrower enforceable in accordance with their terms. The
execution and delivery of this Agreement and the compliance with the provisions
thereof will not conflict with or constitute a breach of, or default under, any
of the provisions of any other agreement to which the Borrower is a party.
d. The continued validity in all respects of the
aforesaid representations and warranties shall be a condition precedent to
Bank's obligation to fund the Loans. If any of the representations and
warranties shall not be correct at the time the same is made or at the time a
request for an advance under the Loans is made, Bank will be under no
obligation to make any such advance under the Loans.
4. Default. Any failure by the Borrower to comply with the terms
of this Agreement which is not corrected within thirty (30) days after
receiving written notice of such failure from Bank shall constitute an event of
default under the documents evidencing the Loans and the Borrower agrees that
in such event the Bank shall have the right in addition to such other remedies
as may be available to it, to injunctive relief enjoining such breach of this
Agreement and neither the Borrower, its officers, directors, employees, agents
or representatives shall urge that such remedy is not appropriate under the
circumstances, it being expressly acknowledged by the Borrower that such action
shall cause the Bank irreparable damage for which legal remedies are inadequate
to protect the Bank.
5. Termination. This Agreement shall remain in full force and
effect until the Loans described above shall have been paid in full.
2
<PAGE> 55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives.
WITNESSES: PLASMA-THERM, INC.,
a Florida corporation
("Borrower")
/s/ Joan Williams
- ---------------------------------
/s/ James E. Hardin, Jr. By: /s/ Diana M. DeFerrari
- --------------------------------- -----------------------------
Diana M. DeFerrari
Senior Vice President
(CORPORATE SEAL)
WITNESSES: NATIONSBANK, N.A. (SOUTH),
a national banking
association ("Lender")
/s/ Joan Williams
- ---------------------------------
By: /s/ James E. Harden, Jr.
-----------------------------
/s/ Diana M. DeFerrari James E. Harden, Jr.
- --------------------------------- Vice President
(CORPORATE SEAL)
STATE OF ILLINOIS
COUNTY OF COOK
The foregoing instrument was acknowledged before me this 18th day
of April, 1997, by Diana M. DeFerrari as Senior Vice President of PLASMA-THERM,
INC., a Florida corporation, on behalf of the corporation. She is [ ]
personally known to me or [X] has produced a Florida Driver's License as
identification.
(SEAL)
/s/ Joanne M. Meister
-----------------------------
Notary Public
3
<PAGE> 56
STATE OF ILLINOIS
COUNTY OF COOK
The foregoing instrument was acknowledged before me this 18th day
of April, 1997, by James E. Harden, Jr., as Vice President of NATIONSBANK, N.A.
(SOUTH), a national banking association, on behalf of the association. He is
[ ] personally known to me or [X] has produced a Florida Driver's License as
identification.
(SEAL)
/s/ Joanne M. Meister
----------------------------
Notary Public
4
<PAGE> 57
TERM PROMISSORY NOTE
Chicago, Illinois
$1,000,000.00 April 18, 1997
FOR VALUE RECEIVED, the undersigned PLASMA-THERM, INC., a Florida
corporation (hereinafter called "Borrower") promises to pay to the order of
NATIONSBANK, N.A. (SOUTH), a national banking association (hereinafter
sometimes referred to as "Lender" and together with any holder hereof called
"Holder"), at 400 N. Ashley Drive, 2nd Floor, Tampa, Florida 33602, or at such
other place as Holder may from time to time designate in writing, the principal
sum of ONE MILLION AND NO/100 DOLLARS ($1,000,000.00), or so much thereof as
has been advanced hereunder, together with interest on the unpaid balance of
the principal (the "Loan") from time to time outstanding from the date of each
advance of principal at the rate for each day equal to the "Variable Adjusted
LIBOR Rate" (as hereinafter defined) as determined by Lender and adjusted
daily, plus two and one-fourth percent (2.25%) per annum. In no event,
however, shall the interest rate be greater than the maximum rate of interest
allowed to be contracted for by applicable law. The term "Variable Adjusted
LIBOR Rate" means the interest rate per annum determined in accordance with the
following definitions and procedures:
a. The "LIBOR Rate" for a particular day shall be the interest
rate as published in the final New York edition of The Wall Street Journal as
the appropriate London InterBank Offered Rate (LIBOR) for such particular day
for a non-domestic certificate of deposit in an amount approximately equal to
the amount of the Note having a term of thirty (30) days, or if The Wall Street
Journal is not published on any such date, then as published therein for the
immediately preceding business day provided, however, that in the event that
The Wall Street Journal is not published, or does not report the London
InterBank Offered Rate, for three consecutive business days, then the "LIBOR
Rate" shall be deemed to be the interest rate which it would be necessary for
Lender to pay in connection with a sale by Lender, if possible, of a
certificate of deposit for a non-domestic deposit in an amount approximately
equal to the amount of the Note and having a term of thirty (30) days.
b. The "Variable Adjusted LIBOR Rate" for a particular day shall
be equal to the quotient of (1) the LIBOR Rate divided by (2) the difference of
(a) one minus (b) the maximum rate (expressed as a decimal) of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable from time to time to any
member bank of the Federal Reserve System, in respect to Eurocurrency
liabilities as specified in Regulation D (or any successor category of
liabilities under Regulation D). The computation of the Variable Adjusted
LIBOR Rate shall also include such adjustments as may be necessary in respect
to impositions on Lender for Federal Deposit
1
<PAGE> 58
Insurance Corporation insurance and other insurance, fees, assessments and
surcharges which occur because of Lender's sale of a certificate of deposit
which would establish the LIBOR Rate or for insuring time deposits.
c. The LIBOR Rate used in determining the Variable Adjusted LIBOR
Rate for a particular day shall be the LIBOR Rate for such day if the interest
rate is published in The Wall Street Journal as specified in clause (a) above,
and otherwise shall be the LIBOR Rate which is two "business days" prior to the
date of determination, or if such day is not a business day, then the next
preceding business day.
d. A "business day" for purposes of determination of Lender's
Variable Adjusted LIBOR Rate shall mean any day on which Lender is open in
Charlotte, North Carolina for the transaction of domestic and foreign exchange
business. Each determination by Lender of the Variable Adjusted LIBOR Rate
shall, in the absence of manifest error, be conclusive and binding.
Interest owing under this Note shall be computed on the basis of a
360-day year.
Principal and interest shall be due and payable as follows:
e. Monthly payments of principal in the amount of
$27,778.00, together with all then accrued interest, shall be due and payable
on the last day of each month, beginning with a first payment due on the last
day of May, 1997.
f. All outstanding principal and then accrued interest
due thereon, together with all other sums due under the terms of this Note
shall be due and payable in full on or before the last day of April, 2000.
Borrower may prepay all or part of the principal balance at any time
without penalty. Such prepayment shall be accompanied by payment of any unpaid
interest accrued to the time of such prepayment. All payments made hereunder
shall at Holder's option first be applied to late charges, then to accrued
interest, then to principal.
Permitted partial prepayments shall not affect or vary the duty of
Borrower to pay all obligations when due, and they shall not affect or impair
the right of Holder to pursue all remedies available to it hereunder, under the
security instruments securing this indebtedness, or under any other loan
documents or guaranty executed in connection herewith.
This Note is secured by a certain Security Agreement of even date
herewith which, together with this Note, the Credit Agreement, and all other
agreements, instruments and documents delivered in connection herewith, are
hereinafter sometimes referred to as the "Loan Documents."
2
<PAGE> 59
This Note and the Loan Documents are to be governed by and construed
under the laws of the State of Florida and of the United States of America, and
the rules and regulations promulgated under the authority thereof. It is the
intent of this Note that such laws shall be interpreted in such a manner that
the maximum rate of interest allowed to be contracted for by applicable law as
changed from time to time which is applicable to this Note (hereinafter called
the "Maximum Rate") be as great as possible. The interest due hereunder is
being charged pursuant to the provisions of The Florida Banking Code (as
defined by statute), and Chapter 687 Florida Statutes. In the event that any
law, rule or regulation of the United States of America or the State of
Florida, as changed from time to time, allows interest to be contracted for
at a rate that is greater than the rate permitted by The Florida Banking Code
(as defined by statute), and Chapter 687, Florida Statutes, then such law, rule
or regulation shall apply. References to laws, statutes, rules and regulations
in this Note refer to such as amended from time to time.
In the event that any payment of principal or interest is not made
within ten (10) days after the same become due hereunder, it is hereby agreed
that Holder shall have the option of collecting a late charge equal to four
percent (4%) of the amount of each such delinquent payment. Said late charge
and/or interest shall be immediately due and payable in full on demand by
Holder.
In no event shall Holder have the right to charge or collect, nor
shall Borrower be required or obligated to pay, interest or payments in the
nature of interest, which would result in interest being charged or collected
at a rate in excess of the Maximum Rate. In the event that any payment which
is interest or in the nature of interest is made by Borrower or received by
Holder which would result in the rate of interest being charged or collected by
Holder being in excess of the Maximum Rate, then the portion of any such
payment which causes the rate of interest being charged or collected by Holder
to exceed the Maximum Rate (hereinafter called the "excess sum") shall be
credited as a payment of principal. If Borrower notifies Holder in writing
that Borrower elects to have such excess sum returned to Borrower, such excess
sum shall be returned to Borrower. In the event that any such overcharge is
discovered after this Note has been paid in full, then the amount of such
excess sum shall be returned to Borrower together with interest thereon from
the date such excess sum was paid or collected at the same rate as was due
Holder during such period under the terms of this Note. All excess sums
credited to principal shall be credited as of the date paid to Holder. It is
recognized by Borrower that the Maximum Rate may vary from time to time, and
that from time to time the Maximum Rate may be uncertain. Therefore, Holder
may seek judicial determination of the applicable rate of interest. In such
event, the withholding of credit to principal or the withholding of payment to
Borrower of any proposed excess sum during the period of judicial determination
(including all appeals) shall not be deemed a breach of the obligations of
Holder hereunder or of applicable law. It is the intent of Holder
3
<PAGE> 60
to conform strictly to the limitations of applicable laws governing the
charging and collection of interest as changed from time to time.
The "Default Interest Rate" shall be a rate equal to three percent
(3%) above the rate of interest required to be paid by the terms of this Note.
Holder shall have the optional right to declare the amount of the
total unpaid balance hereof to be due and forthwith payable in advance of the
maturity date of any sum due or installment, as fixed herein, upon the
occurrence of an event of default. An event of default shall be deemed to
occur under this Note upon the failure of Borrower to pay, within fifteen (15)
days after the same become due, any of the installments of interest or
principal, or other sums due hereunder, or upon the occurrence of any other
default under or failure to perform by any party (other than Holder) in
accordance with any of the terms and conditions of this Note within thirty (30)
days after notice of such default or failure from Holder or upon the occurrence
of any default under or failure to perform by any party (other than Holder) in
accordance with any of the terms and conditions of any of the Loan Documents
after the expiration of any applicable grace period, or upon the default under
or the failure of Borrower to perform in accordance with any and all notes,
obligations, instruments or documents between Borrower and Lender after any
applicable grace period (including but not limited to that certain Line of
Credit Promissory Note by Borrower in favor of Lender in the principal amount
of $7,000,000.00 dated simultaneously herewith and that certain Promissory Note
by Borrower in favor of Lender in the original principal amount of
$3,375,000.00 dated August 14, 1995). Upon exercise of any of these options by
Holder, the entire unpaid principal balance shall bear interest at the "Default
Interest Rate." In addition to the rights described in this paragraph, Holder
shall have the right to exercise all other rights or remedies provided by law
or at equity or as provided in any of the Loan Documents and shall specifically
have the right to recover all damages resulting from such default including,
without limitation, the right to recover the payment of all amounts owing to
Holder. Exercise of any of these options shall be without any additional
notice to Borrower, notice of such exercise being hereby expressly waived.
Time is of the essence hereunder. In the event that this Note is
collected by law or through attorneys at law, or under advice therefrom,
Borrower and any other person liable for payment hereof hereby, severally and
jointly, agree to pay all costs of collection, including reasonable
out-of-pocket attorneys' fees and costs (including charges for paralegals and
others working under the direction or supervision of Holder's attorneys) and
all sales or use taxes thereon, whether or not suit is brought, and whether
incurred in connection with collection, trial, appeal, bankruptcy or other
creditors' proceedings or otherwise, and, if Holder's attorneys shall include
employees of Holder or of any person controlling, controlled by or under common
control with Holder, such reasonable attorney's fees shall include costs
allocated by Holder's or such person's internal legal department.
4
<PAGE> 61
Borrower authorizes Holder, when payment is due, to set off for any
payment of principal or interest past due hereunder for the amount of such
payment of principal or interest. Exercise of this right shall be optional
with Holder and the provisions of this paragraph shall not be construed as
releasing Borrower from the obligation to make payments of principal or
interest according to the terms hereof.
The remedies of Holder as provided herein and in the Loan Documents
shall be cumulative and concurrent, and may be pursued singularly,
successively, or together, at the sole discretion of Holder. No act of
omission or commission of Holder, including specifically any failure to
exercise any right, remedy or recourse, shall be deemed to be a waiver or
release of the same, such waiver or release to be effected only through a
written document executed by Holder and then only to the extent specifically
recited therein. A waiver or release with reference to any one event shall not
be construed as continuing, as a bar to, or as a waiver or release of, any
subsequent right, remedy or recourse as to a subsequent event.
All persons (including corporations) now or at any time liable whether
primarily or secondarily, for the payment of the indebtedness hereby evidenced,
for themselves, their heirs, legal representatives, successors and assigns,
respectively, hereby (a) expressly waive any presentment, demand for payment,
notice of dishonor, protest, notice of nonpayment or protest, and diligence in
collection; (b) consent that Holder may, from time to time and without notice
to them or demand, (i) extend, rearrange, renew or postpone any or all payments
and/or (ii) release, exchange, add to or substitute all or any part of the
collateral for this Note, without in any way modifying, altering, releasing,
affecting or limiting their respective liability or the lien of any security
instrument; (c) agree that Holder, in order to enforce payment of this Note
against them shall not be required first to institute any suit or to exhaust
any of its remedies against Borrower or any other person or party or to attempt
to realize on the collateral for this Note.
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 OR
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 INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION,
INCLUDING A SUMMARY OR EXPEDITED
5
<PAGE> 62
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS
AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
B. SPECIAL RULES. THE ARBITRATION SHALL BE
CONDUCTED IN THE COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION
OF THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR IF THERE IS REAL OR PERSONAL
PROPERTY COLLATERAL, IN THE COUNTY WHERE SUCH REAL OR PERSONAL PROPERTY IS
LOCATED, 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.
C. RESERVATION OF RIGHTS. NOTHING IN THIS
ARBITRATION PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY
OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED
IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY 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 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. 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.
Borrower acknowledges that the above paragraphs have been expressly
bargained for by Holder as part of the Loan evidenced hereby and that, but for
Borrower's agreement and
6
<PAGE> 63
the agreement of any other person liable for payment hereof thereto, Holder
would not have extended the Loan for the term and with the interest rate
provided herein.
If more than one party shall execute this Note, the term "Borrower",
as used herein, shall mean all parties signing this Note and each of them, who
shall be jointly and severally obligated hereunder. In this Note, whenever the
context so requires, the neuter gender includes the feminine and/or masculine,
as the case may be and the singular number includes the plural.
7
<PAGE> 64
IN WITNESS WHEREOF Borrower has caused this Note to be executed in its
name on the day and year first above written.
PLASMA-THERM, INC., a Florida
corporation ("Borrower")
By: /s/ Diana M. DeFerrari
-------------------------------
Diana M. DeFerrari
Senior Vice President
(CORPORATE SEAL)
STATE OF ILLINOIS
COUNTY OF COOK
The foregoing instrument was acknowledged before me this 18th day
of April, 1997, by Diana M. DeFerrari as Senior Vice President of PLASMA-THERM,
INC., a Florida corporation, on behalf of the corporation. She is [ ]
personally known to me or [X] has produced a Florida Driver's License as
identification.
(SEAL)
/s/ Joanne M. Meister
----------------------------
Notary Public
8
<PAGE> 65
THIRD AMENDMENT
(TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT)
AND FIRST AMENDMENT (TO AMENDED AND RESTATED SECURITY AGREEMENT)
THIRD AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
BETWEEN PLASMA-THERM, INC., A FLORIDA CORPORATION ("BORROWER"), AND
NATIONSBANK, N.A. (SOUTH), A NATIONAL BANKING ASSOCIATION, SUCCESSOR TO
NATIONSBANK OF FLORIDA, N.A. ("LENDER"), DATED JANUARY 19, 1995 ("CREDIT
AGREEMENT"), AND FIRST AMENDMENT TO AMENDED AND RESTATED SECURITY AGREEMENT
BETWEEN BORROWER AND LENDER DATED JANUARY 19, 1995 ("SECURITY AGREEMENT").
WHEREAS, Borrower and Lender entered into the Credit Agreement on
January 19, 1995;
WHEREAS, Borrower and Lender entered into an Amendment to the Credit
Agreement on August 14, 1995 ("First Amendment");
WHEREAS, Borrower and Lender entered into a Second Amendment to the
Credit Agreement on November 17, 1995 ("Second Amendment");
WHEREAS, Borrower and Lender entered into the Security Agreement on
January 19, 1995;
WHEREAS, on the date hereof, Lender has extended to Borrower two (2)
new loans as follows: (i) $7,000,000.00 Line of Credit Loan, and (ii)
$1,000,000.00 Term Loan (the "1997 Loans"), which 1997 Loans have been made
subject to the terms and conditions of that certain Credit Agreement and
Security Agreement between the Lender and the Borrower dated of even date
herewith (the "1997 Agreements");
WHEREAS, the 1997 Agreements also apply to and govern that certain
Real Estate Mortgage Loan evidenced by a Promissory Note dated August 14, 1995,
in the original principal sum of $3,375,000.00, which was executed by the
Borrower in favor of the Lender (the "Real Estate Loan"), but do not secure the
Real Estate Loan;
WHEREAS, it is the intention of the Lender and the Borrower that as of
the date hereof the Credit Agreement, as amended by the First Amendment and the
Second Amendment, and the Security Agreement shall apply to, govern and secure
only that certain Term Loan evidenced by a Term Promissory Note dated May 19,
1994, in the original principal sum of $1,000,000.00, which was executed by the
Borrower in favor of Lender (the "1994 Term Loan"), and shall not apply to,
govern or secure the 1997 Loans or the Real Estate Loan;
1
<PAGE> 66
WHEREAS, Borrower and Lender desire to modify the terms and conditions
of the Credit Agreement, as amended, and the Security Agreement to affirm that,
from the date hereof, the terms of the Credit Agreement, as amended, and the
Security Agreement, shall apply to, govern and secure only the 1994 Term Loan,
and not any other loans made by the Lender to the Borrower, including but not
limited to the 1997 Loans and the Real Estate Loan.
NOW, THEREFORE, it is agreed as follows:
1. The terms and conditions of the Credit Agreement, as amended
by the First Amendment and the Second Amendment, and the Security Agreement
shall apply to, govern and secure only the 1994 Term Loan and no other loans
made by the Lender to the Borrower, including but not limited to the 1997 Loans
and the Real Estate Loan.
2. Lender shall terminate in its entirety the Credit Agreement,
as amended, and the Security Agreement, at such time as the 1994 Term Note is
repaid in full on or prior to its maturity date and pursuant to its terms.
Upon such repayment of the 1994 Term Note, Lender shall execute a Form UCC-3
Financing Statement terminating UCC Filing No. 92-0000017921, filed January
27, 1992, as amended from time to time.
3. Except as otherwise set forth herein, all terms, conditions
and covenants of the Credit Agreement, the First Amendment and the Second
Amendment, and the Security Agreement shall remain the same and shall be fully
binding upon and enforceable by the Lender and the Borrower pursuant to their
terms.
IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment
on the day and year first above written.
WITNESSES: PLASMA-THERM, INC., a Florida
corporation ("Borrower")
/s/ Joan Williams
- ----------------------------------- By: /s/ Diana M. DeFerrari
-----------------------------
Diana M. DeFerrari
Its Senior Vice President
/s/ James E. Harden, Jr.
- -----------------------------------
(CORPORATE SEAL)
2
<PAGE> 67
WITNESSES: NATIONSBANK, N.A. (SOUTH), a
national banking association,
successor to NATIONSBANK OF
FLORIDA, N.A., a national banking
association ("Lender")
/s/ Joan Williams
- ------------------------------------
By: /s/ James E. Harden, Jr.
------------------------------
/s/ Diana M. DeFerrari James E. Harden, Jr.
- ----------------------------------- Its Vice President
(CORPORATE SEAL)
STATE OF ILLINOIS
COUNTY OF COOK
The foregoing instrument was acknowledged before me this 18th day
of April, 1997, by Diana M. DeFerrari as Senior Vice President of PLASMA-THERM,
INC., a Florida corporation, on behalf of the corporation. She is [ ]
personally known to me or [X] has produced a Florida Driver's License as
identification.
(SEAL)
/s/ Joanne M. Meister
----------------------------
Notary Public
STATE OF ILLINOIS
COUNTY OF COOK
The foregoing instrument was acknowledged before me this 18th day
of April, 1997, by James E. Harden, Jr., as Vice President of NATIONSBANK, N.A.
(SOUTH), a national banking association, successor to NATIONSBANK OF FLORIDA,
N.A., a national banking association, on behalf of the association. He is [ ]
personally known to me or [X] has produced a Florida Driver's License as
identification.
(SEAL)
/s/ Joanne M. Meister
----------------------------
Notary Public
3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AS OF MAY 31, 1997, AND CONSOLIDATED STATEMENTS OF
INCOME FOR THE PERIOD ENDED MAY 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> MAY-31-1997
<CASH> 6,063,010
<SECURITIES> 0
<RECEIVABLES> 9,463,705
<ALLOWANCES> 0
<INVENTORY> 9,474,902
<CURRENT-ASSETS> 25,936,291
<PP&E> 11,897,361
<DEPRECIATION> 3,000,091
<TOTAL-ASSETS> 35,121,488
<CURRENT-LIABILITIES> 5,676,385
<BONDS> 4,770,779
0
0
<COMMON> 110,032
<OTHER-SE> 25,271,638
<TOTAL-LIABILITY-AND-EQUITY> 35,121,488
<SALES> 19,722,114
<TOTAL-REVENUES> 19,722,114
<CGS> 11,539,714
<TOTAL-COSTS> 16,486,055
<OTHER-EXPENSES> 29,050
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 184,737
<INCOME-PRETAX> 3,204,495
<INCOME-TAX> 1,207,359
<INCOME-CONTINUING> 1,997,136
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,997,136
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
