SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15[d] OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 24, 1995
PHOTRONICS, INC.
(Exact Name of Registrant as Specified in Charter)
Connecticut 0-15451 06-0854886
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
1061 East Indiantown Road, Jupiter, FL 33477
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: 407-747-4163
________15 Secor Road, Brookfield, Connecticut 06804_____________
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS
This Form 8-K is being filed to file the exhibits listed in
Item 7, below.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
3.1 Certificate amending or restating the Certificate of
Incorporation of the Registrant, dated March 16,
1995.
10.1 Revolving Credit and Term Loan Agreement between the
Registrant and Chemical Bank, dated as of March 1,
1995.
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 hereto duly authorized.
PHOTRONICS, INC.
By:______JEFFREY P. MOONAN__________
Jeffrey P. Moonan
Senior Vice President
Secretary
Date: March 24, 1995
<PAGE>
EXHIBIT INDEX
3.1 Certificate amending or restating the Certificate
of Incorporation of the Registrant, dated March 16,
1995.
10.1 Revolving Credit and Term Loan Agreement between the
Registrant and Chemical Bank, dated as of March 1,
1995.
FORMS\8K-395.EDG/p
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
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1. Name of Corporation (Please enter name within lines)
PHOTRONICS, INC.
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2. The Certificate of Incorporation is:
|X| A. Amended only, pursuant to Conn. Gen. Stat. Sect. 33-360
Set forth here the resolution of amendment and/or restatement.
RESOLVED, that the Certificate of Incorporation be amended by
striking the first paragraph of Article Third in its entirety and
substituting therefor the following:
3) The aggregate number of shares which the Corporation
shall have the authority to issue is 22,000,000 shares, of which
2,000,000 shares shall be shares of Preferred Stock having a par
value of $0.01 per share (hereinafter called "Preferred Stock") and
20,000,000 shares shall be shares of Common Stock having a par
value of $0.01 per share (hereinafter called "Common Stock").
(If 2A or 2B is checked, go to 5 & 6 to complete this certificate.
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5. The manner of adopting the resolution was as follows:
(Check one A, B or C)
|X| A. By the board of directors and shareholders, pursuant
to Conn. Gen. Stat. Sect. 33-360.
Vote of Shareholders: (Check (i) or (ii), and (iii)
if applicable)
(i) |X| No shares are required to be voted as a
class; the shareholders' vote was as follows:
Vote Required for Adoption: 3,288,639
Vote Favoring Adoption: 5,151,790
(iii) |X| Check here if the corporation has 100 or
more recordholders, as defined in Conn.
Gen. Stat. Sect. 33-311a(a).
We hereby declare, under the penalties of false statement,
that the statements made in the foregoing certificate are true.
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Name of President Signature
Michael J. Yomazzo Michael J. Yomazzo
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Name of Secretary Signature
Jeffrey P. Moonan Jeffrey P. Moonan
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6. Dated at Brookfield, CT this 16th day of March, 1995.
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REVOLVING CREDIT AND TERM LOAN AGREEMENT
BETWEEN
PHOTRONICS, INC.,
the Borrower
AND
CHEMICAL BANK,
the Bank
Dated as of March 1, 1995
<PAGE>
AGREEMENT, made as of March 1, 1995, between PHOTRONICS,
INC., a Connecticut corporation with an office located at 15
Secor Road, Brookfield, Connecticut (the "Borrower"), and
CHEMICAL BANK, a New York banking corporation with an office
located at 270 Park Avenue, New York, New York (the "Bank").
The parties hereto hereby agree as follows:
SECTION 1 AMOUNT AND TERMS OF COMMITMENTS
1.1 Revolving Credit Commitment.
1.Subject to the terms and conditions hereof, the
Bank agrees to make revolving credit loans ("Revolving Credit
Loans") to the Borrower from time to time during each
Availability Period in an aggregate principal amount at any one
time outstanding not to exceed the amount of the then Available
Revolving Credit Commitment. During each Availability Period the
Borrower may use the Available Revolving Credit Commitment by
borrowing, prepaying the Revolving Credit Loans in whole or in
part, and reborrowing, all in accordance with the terms and
conditions hereof.
2.The Revolving Credit Loans may from time to time
be (i) Eurodollar Loans, (ii) Alternate Base Rate Loans, or (iii)
a combination thereof, as determined by the Borrower and notified
to the Bank in accordance with subsections 1.3 and 1.10, provided
that no Revolving Credit Loan shall be made as a Eurodollar Loan
after the day that is one month prior to the next Availability
Termination Date.
1.2 Revolving Credit Notes.
The Revolving Credit Loans made by the Bank shall be
evidenced by a promissory note of the Borrower, substantially in
the form of Exhibit A (the "Revolving Credit Note"), payable to
the order of the Bank and in a principal amount equal to the
lesser of (a) Thirteen Million Dollars ($13,000,000) and (b) the
aggregate unpaid principal amount of all Revolving Credit Loans
made by the Bank. The Bank is hereby authorized to record the
date, Type and amount of each Revolving Credit Loan made by it,
each continuation thereof, each conversion of all or a portion
thereof to another Type, the date and amount of each payment or
prepayment of principal thereof and, in the case of Eurodollar
Loans, the length of each Interest Period with respect thereto,
on the schedule annexed to and constituting a part of its
Revolving Credit Note, and any such recordation shall constitute
prima facie evidence of the accuracy of the information so
recorded. The Revolving Credit Note shall (x) be dated the
Closing Date, (y) be stated to mature on the Commitment
Termination Date and (z) provide for the payment of interest in
accordance with subsection 1.12.
<PAGE>
1.3 Procedure for Revolving Credit Borrowing.
The Borrower may borrow under the Revolving Credit
Commitment during an Availability Period on any Working Day, if
all or any part of the requested Revolving Credit Loans are to be
initially Eurodollar Loans, or on any Business Day, otherwise,
provided that the Borrower shall give the Bank irrevocable notice
(which notice must be received by the Bank prior to 11:00 A.M.,
New York City time, (a) three Working Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving
Credit Loans are to be initially Eurodollar Loans, or (b) one
Business Day prior to the requested Borrowing Date, otherwise),
specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, Alternate Base Rate Loans, or a combination
thereof and (iv) if the borrowing is to be entirely or partly of
Eurodollar Loans, the amount of each such Loan and the length of
the initial Interest Periods therefor. Each Revolving Credit
Loan shall be in an amount equal to (x) in the case of Alternate
Base Rate Loans, $100,000 or a whole multiple thereof (or, if the
then Available Revolving Credit Commitment is less than $100,000,
such lesser amount) and (y) in the case of Eurodollar Loans
$1,000,000 or a whole multiple of $100,000 in excess thereof.
Such borrowing will be made available to the Borrower by the Bank
crediting the account of the Borrower maintained with the Bank
not later than 2:00 P.M. on such date.
1.4 Fees.
1. The Borrower agrees to pay to the Bank a
commitment fee for the period from and including the date hereof
to but not including the Commitment Termination Date, computed at
the rate of 1/4 of 1% per annum on the average daily amount of
the Available Revolving Credit Commitment during the period for
which payment is made, payable quarterly in arrears on the last
day of each March, June, September and December and on the
Commitment Termination Date or such earlier date as such
Commitment shall terminate as provided herein, commencing on the
first of such dates to occur after the date hereof.
2. The Borrower agrees to pay to the Bank a
structuring fee in the amount of $15,000 and an origination fee
in the amount of $35,000, each payable on or before the Closing
Date.
<PAGE>
1.5 Termination or Reduction of the Commitment.
The Borrower shall have the right, upon not less than
five Business Days' notice to the Bank, to terminate the
Commitment, or, from time to time, to reduce the amount of the
Revolving Credit Commitment, provided that no such termination or
reduction shall be permitted if, after giving effect thereto and
to any prepayments of the Revolving Credit Loans made on the
effective date thereof, the aggregate principal amount of the
Revolving Credit Loans then outstanding would exceed the
Revolving Credit Commitment then in effect. Any such reduction
shall be in an amount equal to $100,000 or a whole multiple
thereof. Any reduction in the Revolving Credit Commitment to an
amount less than $10,000,000 shall permanently reduce the
Revolving Credit Commitment in subsequent Availability Periods.
Termination of the Commitment shall also terminate the obligation
of the Bank to make any Term Loans. The Revolving Credit
Commitment shall terminate on the Commitment Termination Date.
1.6 Term Loans.
Subject to the terms and conditions hereof, including,
without limitation the conditions precedent set forth in
subsections 3.2 and 3.3, the Bank agrees to make a term loan (a
"Term Loan") to the Borrower on each Availability Termination
Date in an amount equal to the amount of the then outstanding
Revolving Credit Loans. The Bank shall make each Term Loan by
crediting the amount thereof to the repayment of the outstanding
principal amount of Revolving Credit Loans; provided that the
aggregate principal amount of the Term Loans outstanding plus the
Term Loan to be made plus the Revolving Credit Commitment shall
not exceed the Commitment. The Term Loans may from time to time
be (a) Eurodollar Loans, (b) Alternate Base Rate Loans, or (c) a
combination thereof, as determined by the Borrower and notified
to the Bank in accordance with subsections 1.8 and 1.10.
1.7 Term Notes.
Each Term Loan made by the Bank shall be evidenced by a
promissory note of the Borrower, substantially in the form of
Exhibit B (a "Term Note"), with appropriate insertions therein as
to date and principal amount, payable to the order of the Bank
and in a principal amount equal to such Term Loan. The Bank is
hereby authorized to record the date and amount of each payment
or prepayment of principal of its Term Loan, each continuation
thereof, each conversion of all or a portion thereof to another
type and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto, on its internal books and
records, and any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded. Each
Term Note shall (a) be dated the applicable Availability
Termination Date, (b) be stated to mature in 20 equal consecutive
quarterly installments commencing on the first day of the fourth
month following such Availability Termination Date, and (c)
provide for the payment of interest in accordance with subsection
1.12.
<PAGE>
1.8 Procedure for Term Loan Borrowing.
The Borrower shall give the Bank irrevocable notice
(which notice must be received by the Bank prior to 11:00 A.M.,
New York City time, three Working Days prior to an Availability
Termination Date), if all or any part of the Term Loan is to be
initially Eurodollar Loans, or such Loan shall be made as an
Alternate Base Rate Loan. Any such notice shall specify (i)
whether the Term Loan is to be initially Eurodollar Loans or a
combination of Eurodollar Loans and Alternate Base Rate Loans,
and (ii) if the Term Loan is to be entirely or partly Eurodollar
Loans, the amount of each such Loan and the length of the initial
Interest Period therefor.
1.9 Optional Prepayments.
The Borrower may on the last day of any Interest Period
with respect thereto, in the case of Eurodollar Loans, or at any
time and from time to time, in the case of Alternate Base Rate
Loans, prepay the Loans, in whole or in part, without premium or
penalty, upon at least ten Business Days' irrevocable notice to
the Bank, specifying the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans, Alternate Base
Rate Loans or a combination thereof, and, if a combination
thereof, the amount allocable to each. If any such notice is
given, the amount specified in such notice shall be due and
payable on the date specified therein, together with accrued
interest to such date on the amount prepaid and any amounts due
pursuant to subsection 1.17 hereof. Partial prepayments of the
Term Loans shall be applied to the installments of principal
thereof in the inverse order of their scheduled maturities.
Amounts prepaid on account of the Term Loans may not be
reborrowed. Partial prepayments shall be in an aggregate
principal amount of $100,000 or a whole multiple thereof.
1.10 Conversion and Continuation Options.
The Borrower may elect from time to time to convert
Eurodollar Loans to Alternate Base Rate Loans by giving the Bank
at least one Business Days' prior irrevocable notice of such
election, provided that any such conversion of Eurodollar Loans
may only be made on the last day of an Interest Period with
respect thereto. The Borrower may elect from time to time to
convert Alternate Base Rate Loans to Eurodollar Loans or to
continue a Eurodollar Loan as such by giving the Bank at least
three Working Days' prior irrevocable notice of such election.
Any such notice of conversion to, or continuation of, Eurodollar
Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. All or any part of outstanding
Eurodollar Loans and Alternate Base Rate Loans may be converted
or continued as provided herein, provided that (i) no Loan may be
converted into, or continued as, a Eurodollar Loan when any Event
of Default has occurred and is continuing and the Bank has
determined that such a conversion is not appropriate, (ii) no
Loan may be converted into, or continued as, a Eurodollar Loan
after the date that is one month prior to an Availability
Termination Date in the case of Revolving Credit Loans or the
date of the final installment of principal of a Term Loan (iv) no
Loan may be converted or continued as a Eurodollar Loan unless
the aggregate principal amount of Eurodollar Loans being made as
of such date with the same Interest Period shall be equal to
$1,000,000 or a whole multiple of $100,000 in excess thereof, and
provided, further, that if the Borrower shall fail to give any
required notice as described above in this paragraph or if such
continuation or conversion is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to
or continued as Alternate Base Rate Loans on the last day of such
then expiring Interest Period.
<PAGE>
1.11 Interest Rates; Payments Dates; Payments.
1.Each Eurodollar Loan shall bear interest for each
day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for the
relevant Interest Period plus 1%.
2.Each Alternate Base Rate Loan shall bear interest
at a rate per annum equal to the Alternate Base Rate.
3.If all or a portion of (i) the principal amount of
any Loan, (ii) any interest payable thereon or (iii) any
commitment fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per
annum which is (x) in the case of overdue principal, the rate
that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection plus 2% or (y) in the
case of overdue interest, commitment fee or other amount, the
rate described in paragraph (b) of this subsection plus 2%, in
each case from the date of such non-payment until such amount is
paid in full (as well after as before judgment).
4.Interest shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant
to paragraph (c) of this subsection shall be payable from time to
time on demand.
5. All payments (including prepayments) to be made by
the Borrower hereunder and under the Notes, whether on account of
principal, interest, fees or otherwise, shall be made without set
off or counterclaim and shall be made prior to 12:00 noon, New
York City time, on the due date thereof to the Bank at the Bank's
office specified in subsection 9.11 in immediately available
funds. If any payment hereunder (other than payments on
Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to principal payments,
interest thereon shall be payable at the then applicable rate
during such extension. Payments with respect to Eurodollar Loans
shall be made in accordance with the definition of "Interest
Period".
<PAGE>
1.12 Computation of Interest and Fees.
1. Interest on Alternate Base Rate Loans, commitment
fees and interest on overdue interest and other amounts payable
hereunder shall be calculated on the basis of a 365- (or 366-, as
the case may be) day year for the actual days elapsed. Interest
on Eurodollar Loans shall be calculated on the basis of a 360-day
year for the actual days elapsed. The Bank shall as soon as
practicable notify the Borrower of each determination of a
Eurodollar Rate. Any change in the Alternate Base Rate or the
Eurocurrency Reserve Requirements, shall become effective as of
the opening of business on the day on which such change becomes
effective. The Bank shall as soon as practicable notify the
Borrower of the effective date and the amount of each such change
in interest rate.
2. Each determination of an interest rate by the Bank
pursuant to any provision of this Agreement shall be conclusive
and binding on the Borrower in the absence of manifest error.
1.13 Inability to Determine Interest Rate.
If prior to the first day of any Interest Period the
Bank shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar
Rate for such Interest Period or that the Eurodollar Rate will
not adequately and fairly reflect the cost to the Bank (as
conclusively certified by the Bank) of making or maintaining its
Eurodollar Loans during such Interest Period, the Bank shall give
telecopy or telephonic notice thereof to the Borrower as soon as
practicable thereafter. If such notice is given (x) any
Eurodollar Loans, requested to be made on the first day of such
Interest Period shall be made as Alternate Base Rate Loans, (y)
any Loans that were to have been converted on the first day of
such Interest Period to Eurodollar Loans, shall be converted to
or continued as Alternate Base Rate Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the first day of such
Interest Period, to Alternate Base Rate Loans. Until such notice
has been withdrawn by the Bank, no further Eurodollar Loans shall
be made or continued as such, nor shall the Borrower have the
right to convert Loans to Eurodollar Loans.
1.14 Illegality.
Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for
the Bank to make or maintain Eurodollar Loans as contemplated by
this Agreement, (a) the commitment of the Bank hereunder to make
Eurodollar Loans, continue Eurodollar Loans as such and convert
Alternate Base Rate Loans to Eurodollar Loans shall forthwith be
cancelled and (b) the Bank's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Alternate Base
Rate Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such
earlier period as required by law. If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower
shall pay to the Bank such amounts, if any, as may be required
pursuant to subsection 1.17.
<PAGE>
1.15 Requirements of Law.
1. If the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof or
compliance by the Bank with any request or directive (whether or
not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
a. shall subject the Bank to any tax of any kind
whatsoever with respect to this Agreement, any Note or any
Eurodollar Loan made by it, or change the basis of taxation of
payments to the Bank in respect thereof (except for taxes covered
by subsection 1.16 and changes in the rate of tax on the overall
net income of such the Bank);
b. shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for
the account of, advances, loans or other extensions of credit by,
or any other acquisition of funds by, any office of the Bank
which is not otherwise included in the determination of the
Eurodollar Rate; or
c. shall impose on the Bank any other condition;
and the result of any of the foregoing is to increase the cost to
the Bank, by an amount which the Bank deems to be material, of
making, converting into, continuing or maintaining Eurodollar
Loans or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay
the Bank, upon its demand, any additional amounts necessary to
compensate the Bank for such increased cost or reduced amount
receivable. If the Bank becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the
Borrower of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable
pursuant to this subsection submitted by the Bank to the Borrower
shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable hereunder.
2. If the Bank shall have determined that the
adoption of or any change in any Requirement of Law regarding
capital adequacy or in the interpretation or application thereof
or compliance by the Bank or any corporation controlling the Bank
with any request or directive regarding capital adequacy (whether
or not having the force of law) from any Governmental Authority
made subsequent to the date hereof does or shall have the effect
of reducing the rate of return on the Bank's or such
corporation's capital as a consequence of its obligations
hereunder to a level below that which the Bank or such
corporation could have achieved but for such change or compliance
(taking into consideration the Bank's or such corporation's
policies with respect to capital adequacy) by an amount deemed by
the Bank to be material, then from time to time, after submission
by the Bank to the Borrower of a written request therefore, the
Borrower shall pay to the Bank such additional amount or amounts
as will compensate the Bank for such reduction.
<PAGE>
1.16 Taxes.
1. All payments made by the Borrower under this
Agreement and the Notes shall be made free and clear of, and
without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding, net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on the Bank
as a result of a present or former connection between the
jurisdiction of the government or taxing authority imposing such
tax and the Bank (excluding a connection arising solely from the
Bank having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or the
Notes) or any political subdivision or taxing authority thereof
or therein (all such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions and withholdings, being hereinafter
called "Taxes"). If any Taxes are required to be withheld from
any amounts payable to the Bank hereunder or under the Notes, the
amounts so payable to the Bank shall be increased to the extent
necessary to yield to the Bank (after payment of all Taxes)
interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement and the Notes.
Whenever any Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Bank, a
certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay
any Taxes when due to the appropriate taxing authority or fails
to remit to the Bank the required receipts or other required
documentary evidence, the Borrower shall indemnify the Bank for
any incremental taxes, interest or penalties that may become
payable by the Bank as a result of any such failure. The
agreements in this subsection shall survive the termination of
this Agreement and the payment of the Notes and all other amounts
payable hereunder.
1.17 Indemnity.
The Borrower agrees to indemnify the Bank and to hold
the Bank harmless from any loss or expense which the Bank may
sustain or incur as a consequence of (a) default by the Borrower
in payment when due of the principal amount of or interest on any
Eurodollar Loan after the Borrower has given a notice requesting
the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto, including, without
limitation, in each case, any such loss or expense arising from
the reemployment of funds obtained by it or from fees payable to
terminate the deposits from which such funds were obtained. This
covenant shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable hereunder.
<PAGE>
SECTION 2. BORROWER REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
2.1 Organization, Authority and Qualification.
Each of the Borrower and the Guarantors:
1. is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization;
2. has all requisite power and authority to own and
operate its properties and to carry on its business as now
conducted and as presently proposed to be conducted; and
3. is duly qualified, licensed and in good standing
as a foreign corporation in each jurisdiction in which the nature
of the business transacted by it or of the properties owned or
leased by it is such as to require qualification and licensing as
a foreign corporation, except where the failure to so qualify
would not have a material adverse effect on the properties,
assets, operations, business or financial condition of the
Borrower or such Guarantor.
2.2 Borrowing is Legal and Authorized.
Each of the Borrower and the Guarantors has the full
corporate power and legal right to execute, deliver and perform
the Loan Documents to which it is a party and all other documents
executed by it in connection therewith, and has taken all
corporate action necessary thereto. Except for the consent of the
Connecticut Development Authority and Chase Manhattan Bank, N.A.
which have been obtained, no consent, authorization or approval
of any Governmental Authority or any other lender or person is
required in connection with the execution, delivery and
performance of the Loan Documents.
<PAGE>
2.3 Binding Agreements.
This Agreement constitutes, and each of the Notes, the
Guarantees and any other instrument delivered in connection
herewith or therewith, when issued and delivered pursuant hereto
shall constitute, the valid and legally binding obligations of
the Borrower or the respective Guarantor, as the case may be,
enforceable in accordance with its respective terms, except as
enforcement may be limited by bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally.
2.4 Compliance with Laws.
The execution, delivery and performance by each of the
Borrower and the Guarantors of the Loan Documents do not and will
not (i) violate any Requirement of Law applicable to it (ii)
except as amended, modified or revised prior to the date of this
Agreement, violate or conflict with, result in a breach of or
constitute (with notice or lapse of time, or both) a default
under any shareholder agreement, stock preference agreement,
mortgage, indenture or contract to which it is a party, or by
which any of its properties is bound, or (iv) create any lien,
charge or encumbrance upon any of its properties or assets
pursuant to the terms of any agreement or instrument to which it
is a party or by which it or any of its properties are bound or
affected.
2.5 Financial Statements.
The consolidated balance sheet of the Borrower dated
October 31, 1994, and the related statements of income and cash
flow for such year, audited by Deloitte & Touche, LLP,
independent certified public accountants, copies of which have
been furnished to the Bank, have been prepared in accordance with
GAAP consistently applied and fairly present the consolidated
financial condition of the Borrower and its consolidated
subsidiaries as of such date and the results of its operations
for such period. Except as set forth in Schedule 2.18, the
Borrower does not know or have reasonable grounds to know of any
basis for assertion against the Borrower or any Guarantor of any
material claim, liability or obligation of any nature, whether
accrued, absolute, contingent or otherwise, and whether due or to
become due, in any amount not fully reflected or reserved against
in the foregoing financial statements other than those incurred
in the ordinary course of business, or which are fully insured
under valid and enforceable insurance policies above applicable
deductible amounts.
2.6 Title to Properties.
Each of the Borrower and the Guarantors has good and
marketable title to the properties it purports to own, including
all properties reflected in the most recent balance sheet
referred to in subsection 2.5 of this Agreement (except as sold
or disposed of in the ordinary course of business) free from
Liens not permitted by subsection 5.2 of this Agreement.
<PAGE>
2.7 Adverse Developments.
Since October 31, 1994, there has been no material
adverse change in the financial condition, business, operations,
affairs or prospects of the Borrower or the Guarantors. To the
best knowledge of the Borrower, no such changes are anticipated
or threatened.
2.8 Taxes.
Except as set forth on the attached Schedule 2.8 each
of the Borrower and the Guarantors has filed all tax returns
required to be filed by it and has paid all taxes shown to be due
and payable on said tax returns and all assessments and other
governmental charges or levies made against it. Except as set
forth on the attached Schedule 2.8, the Borrower does not know of
any proposed tax deficiency, assessment, charge or levy against
it or any Guarantor, the payment of which is not adequately
provided for on the books of the Borrower. No tax lien has been
filed and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge.
2.9 Regulations G, T, U and X.
The proceeds of the Loans will not be used, directly or
indirectly, for the purpose of purchasing or carrying any "margin
stock" in contravention of Regulations G, T, U or X promulgated
by the Board of Governors of the Federal Reserve System as now
and from time to time hereafter in effect.
2.10 Leases.
Each of the Borrower and the Guarantors enjoys quiet
and undisturbed possession under all material leases, if any,
under which it is operating, and all of such leases, if any, are
valid and subsisting and, to the best of Borrower's knowledge,
not in default or subject to a Lien, except as permitted by
subsection 5.2.
2.11 Contracts.
No contract, governmental or otherwise, to which the
Borrower or any Guarantor is a party, is by its terms subject to
renegotiation. Neither the Borrower nor any Guarantor is in
default in any material respect under any contract for borrowed
money in excess of $5,000 or any other agreement which could
reasonably be expected to have a material adverse effect on the
financial condition or operations of the Borrower and the
Guarantors taken as a whole, except as set forth in the attached
Schedule 2.11.
<PAGE>
2.12 Licenses.
Except as set forth in the attached Schedule 2.12, each
of the Borrower and the Guarantors has all material licenses,
permits and other permissions required by any government, agency
or subdivision thereof, or from any licensing entity necessary
for the conduct of its business, all of which the Borrower
represents to be in good standing and full force and effect,
except where the failure to have such licenses, permits and other
permissions would not have a material adverse impact on its
business or affect the performance by the Borrower or such
Guarantor of any material agreement to which it is a party.
2.13 Financial Information.
All written financial information not covered by
Section 2.5, submitted by the Borrower to the Bank on or prior to
the date hereof are true and correct in all material respects,
and are complete insofar as may be necessary to give the Bank
true and accurate knowledge of the subject matter thereof.
2.14 Subsidiaries.
Except as set forth in the attached Schedule 2.14, the
Borrower has no subsidiaries or Affiliates.
2.15 Stock Matters.
Except as set forth in the attached Schedule 2.15,
there are no options or rights outstanding to purchase any of the
Borrower's or any Guarantor's capital stock.
2.16 No Violation of Environmental, Health or Safety Laws.
Except as set forth on Schedule 2.16,
1. The facilities and the properties owned, leased or
operated by the Borrower or any of its subsidiaries (the
"Properties") do not contain, and have not previously contained,
any Materials of Environmental Concern in amounts or
concentrations which (i) constitute or constituted a violation
of, or (ii) could reasonably be expected to give rise to
liability under, any applicable Environmental Law except in
either case insofar as such violation or liability, or any
aggregation thereof, is not reasonably likely to result in the
payment of a Material Environmental Amount.
2. The Properties and all operations at the
Properties are in compliance, and have in the last 5 years or,
with respect to Property acquired within the last 5 years, since,
the date the Borrowers acquired such Property, been in
compliance, in all material respects with all applicable
Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the
Borrower or any of its subsidiaries (the "Business") which could
materially interfere with the continued operation of the
Properties or materially impair the fair saleable value thereof.
<PAGE>
3. Neither the Borrower nor any of its subsidiaries
has received any notice of violation, alleged violation, non-
compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does the
Borrower have knowledge or reason to believe that any such notice
will be received or is being threatened except insofar as such
notice or threatened notice, or any aggregation thereof, does not
involve a matter or matters that is or are reasonably likely to
result in the payment of a Material Environmental Amount.
4. To the best knowledge of the Borrower, Materials
of Environmental Concern have not been transported or disposed of
from the Properties in violation of, or in a manner or to a
location which could reasonably be expected to give rise to
liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to
liability under, any applicable Environmental Law except insofar
as any such violation or liability referred to in this paragraph,
or any aggregation thereof, is not reasonably likely to result in
the payment of a Material Environmental Amount.
5. No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the
Borrower, threatened, under any Environmental Law to which the
Borrower or any subsidiary is or will be named as a party with
respect to the Properties or the Business, nor are there any
consent decrees or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business except insofar as
such proceeding, action, decree, order or other requirement, or
any aggregation thereof, is not reasonably likely to result in
the payment of a Material Adverse Amount.
6. There has been no release of Materials of
Environmental Concern at or from the Properties, or arising from
or related to the operations of the Borrower or any subsidiary in
connection with the Properties or otherwise in connection with
the Business, in violation of or in amounts or in a manner that
could give rise to liability under Environmental Laws except
insofar as any such violation or liability referred to in this
paragraph, or any aggregation thereof, is not reasonably likely
to result in the payment of a Material Environmental Amount.
<PAGE>
2.17 ERISA.
1. The present value of all benefits vested under all
"employee pension benefit plans", as such term is defined in
Section 3 of ERISA, maintained by the Borrower or any Guarantor,
or in which employees of the Borrower or any Guarantor are
entitled to participate, as from time to time in effect
(collectively, the "Pension Plans"), which Pension Plans are set
forth on the attached Schedule 2.17, did not, as of the last
annual valuation date, exceed the value of the assets of the
Pension Plans allocable to such vested benefits.
2. Neither the Borrower nor any Guarantor nor any of
the Pension Plans nor any trusts created thereunder, nor any
trustee or administrator thereof, has engaged in a "prohibited
transaction", as such term is defined in Section 4975 of the
Internal Revenue Code of 1986, as amended, or described in
Section 406 of ERISA, which could subject the Borrower, any
Guarantor, any of the Pension Plans, any such trust, or any
trustee or administrator thereof, or any party dealing with the
Pension Plans or any such trust to the tax or penalty on
prohibited transactions imposed by said Section 4975 or by
Section 502(i) of ERISA.
3. Neither of the Pension Plans nor any such trusts
have been terminated, and there have not been any "reportable
events", as that term is defined in Section 4043 of ERISA, during
the five year period prior to the date on which this
representation is made or deemed made.
4. Neither of the Pension Plans nor any such trusts
have incurred any "accumulated funding deficiency", as such term
is defined in Section 302 of ERISA (whether or not waived),
during the five year period prior to the date on which this
representation is made or deemed made.
5. Upon request, the Borrower shall deliver to the
Bank a complete and correct list of (i) all employee benefit
plans with respect to which the Borrower is a party in interest,
and (ii) all employee benefit plans with respect to which the
Borrower's or an Affiliate's securities are "employer securities"
within the meaning of Section 407(d) (I) of ERISA. As used in
this subsection (e) the terms "employee benefit plans" and "party
in interest" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
2.18 Pending Litigation.
Except as set forth in the attached Schedule 2.18,
there are no actions, suits, proceedings or investigations
pending, or to the knowledge of the Borrower, overtly threatened,
against or affecting the Borrower or any Guarantor or against any
of their properties, before any Governmental Authority which, if
adversely determined, would in any case or in the aggregate,
materially adversely affect the financial condition, operation,
properties or business or, to the knowledge of the Borrower,
prospects of the Borrower and the Guarantors taken as a whole or
the ability of the Borrower or the Guarantors to perform their
obligations under the Loan Documents.
<PAGE>
2.19 No Defaults.
No event has occurred and no condition exists which
would, upon the execution and delivery of this Agreement or any
of the Notes constitute an Event of Default or Default under this
Agreement. To its knowledge, neither the Borrower nor any
Guarantor is in material default, and no event has occurred and
no condition exists which constitutes, or which with the passage
of time or the giving of notice or both would constitute, a
default in the payment of any obligation for borrowed money, or
in the performance of any covenant or condition under any
material mortgage, indenture, contract or other instrument or
under any order of any court, governmental authority, arbitration
board or tribunal. The Borrower represents that it has not
received notice of any such default from any party.
2.20 Purpose of Loans.
The proceeds of the Loans shall be used by the Borrower
for working capital purposes in the ordinary course of business,
including, without limitation, the purchase of photomask
manufacturing equipment and software.
SECTION 3 CLOSING CONDITIONS
3.1 Condition to Initial Loan.
The obligation of the Bank to execute and deliver this
Agreement and make the initial Loan hereunder is subject to the
satisfaction of the following:
1. The Bank shall have received from counsel for the
Borrower, which counsel shall be satisfactory to the Bank, one or
more opinions, dated the Closing Date in substantially the form
set forth in Exhibit C.
2. The Bank shall have received the Revolving Credit
Note executed by a duly authorized officer of the Borrower.
3. The Bank shall have received copies of all
corporate action (in form and substance reasonably satisfactory
to the Bank) taken by the Borrower to authorize the execution,
delivery and performance of this Agreement and each of the Notes,
and the borrowings to be made hereunder certified by the
Secretary or Assistant Secretary of the Borrower as of the
Closing Date, together with true Copies of the Borrower's
Certificate of Incorporation and Bylaws and such other papers as
the Bank or its counsel may reasonably require.
4. The Bank shall have received the fees to be
received on the Closing Date referred to in Section 1.4.
<PAGE>
5. The Bank shall have received a certificate of a
duly authorized officer of the Borrower, dated the Closing Date,
stating that all representations and warranties set forth in
Section 2 of this Agreement shall be true and correct in all
material respects as of the Closing Date with the same effect as
though made on and as of such date.
6. The Bank shall have received a duly executed
Guaranty from each Guarantor and copies of all corporate action
(in form and substance reasonably satisfactory to the Bank) taken
by each such Guarantor to authorize the execution, delivery and
performance of its Guaranty certified by the Secretary or
Assistant Secretary of such Guarantor as of the Closing Date,
together with true copies of such Guarantor's Certificate of
Incorporation and Bylaws and such other papers as the Bank or its
counsel may reasonably require.
7. The Borrower shall have performed and complied
with, to the satisfaction of the Bank, all agreements and
conditions contained in this Agreement which are required to be
performed or complied with on or as of the date of this
Agreement.
8. All corporate and legal proceedings and all
instruments and agreements in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory
in form and substance to the Bank and its counsel and the Bank
shall have received any and all other information and documents
with respect to the Borrower which the Bank or its counsel may
reasonably request.
3.2 Conditions to Each Loan.
The obligation of the Bank to make any Loan hereunder
is subject to the satisfaction of the following conditions
precedent:
1. The representation and warranties made by the
Borrower and each Guarantor in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of
such date as if made on and as of such date, except that
Schedules 2.14 and 2.15 do not reflect transactions occurring
after the date hereof.
2. No Default or Event of Default shall have occurred
and be continuing on such date after giving effect to the Loans
requested to be made on such date.
Each borrowing by the Borrower hereunto shall
constitute a representation and warranty by the Borrower as of
the date of such Loan that the conditions contained in this
Subsection 3.2 has been satisfied.
<PAGE>
3.3 Additional Conditions to Term Loans.
The obligations of the Bank to make each Term Loan is
subject to the additional condition precedent that the Bank shall
have received a Term Note conforming to the requirements hereof
and executed by a duly authorized officer of the Borrower.
SECTION 4 AFFIRMATIVE COVENANTS
The Borrower covenants that, on and after the execution of
this Agreement and until each of the Notes and all other amounts
due under this Agreement are paid in full:
4.1 Financial and Other Information to be Supplied.
The Borrower shall:
1. Deliver to the Bank: (i) within forty-five (45)
days after the close of each of the first three quarters of each
fiscal year of the Borrower, unaudited consolidated and
consolidating balance sheets of the Borrower and its consolidated
subsidiaries as of the close of each quarter and unaudited
consolidated and consolidating statements of income and cash
flows for that portion of the fiscal year-to-date then ended,
prepared in the format of the Borrower's quarterly report to the
SEC on Form 10-Q prepared in conformity with GAAP, applied on a
basis consistent with that of the preceding period or containing
disclosure of the effect on the financial position or results of
operations of any change in the application of generally accepted
accounting principles during the period, and certified by the
chief executive officer, the chief operating officer or the chief
financial officer of the Borrower as being true and accurate to
the best of the officer's knowledge in the form of the attached
Exhibit D; and (ii) within ninety-five (95) days after the close
of each fiscal year of the Borrower, audited consolidated
financial statements in the form set forth in the Borrower's
annual report to the SEC on Form 10-K including consolidated and
consolidating balance sheets of the Borrower and its consolidated
subsidiaries as of the end of each fiscal year and consolidated
and consolidating statements of income and retained earnings and
cash flows for the year then ended, prepared in conformity with
GAAP, applied on a basis consistent with that of the preceding
period or containing disclosure of the effect on financial
position or results of operations of any change in the
application of generally accepted accounting principles during
the year and accompanied by a report thereon containing an
unqualified opinion of a firm of independent certified public
accountants selected by the Borrower and reasonably satisfactory
to the Bank (the "CPA Firm"), which opinion shall state that the
consolidated financial statements fairly present the consolidated
financial condition and results of operations of the Borrower and
its consolidated subsidiaries in accordance with GAAP, and a
statement from the CPA Firm in the form of the attached Exhibit
E.
<PAGE>
2. Within 5 days after the same are sent deliver to
the Bank copies of all financial statements and reports which the
Borrower sends to or delivers to its shareholders or stockholders
or sends to or files with the SEC.
3. Promptly upon receipt thereof, the Borrower will
deliver to the Bank a copy of any report as to material
inadequacies in accounting controls (including reports as to the
absence thereof) submitted by independent certified public
accountants in connection with any audit of the Borrower.
4. As soon as any officer of the Borrower becomes
aware that any Default or Event of Default exists or has occurred
under this Agreement or any other agreement for borrowed money
regardless of whether such other agreement has been entered into
with the Bank, the Borrower will immediately notify and
thereafter deliver to the Bank a written notice specifying the
nature and duration thereof, and what action the Borrower is
taking or proposes to take with respect thereof.
5. As soon as any officer of the Borrower becomes
aware of any material adverse litigation or material adverse
change in the Borrower's or any Guarantor's business or financial
condition, the Borrower will as soon as reasonably practicable
notify and thereafter deliver to the Bank a written notice
specifying the nature thereof, and what action the Borrower is
taking or proposes to take with respect thereto.
6. As soon as any officer of the Borrower becomes
aware of any "reportable event," as defined in Section 4043 of ERISA
with respect to any of the Pension Plans or trusts created
thereunder, the Borrower will as soon as reasonably practicable
notify and thereafter deliver to the Bank a written notice
setting forth in reasonable detail the nature thereof and
immediately upon receipt from, or delivery to, the Pension
Benefit Guaranty Corporation, the Department of Labor or the
Internal Revenue Service, deliver to the Bank copies of any
reports or correspondence delivered to or received from the
foregoing entities with respect to any such reportable event.
7. With reasonable promptness, the Borrower will, or
cause the Guarantors to, deliver to the Bank such other
information regarding the operations, business affairs and
financial condition of the Borrower or any Guarantor as the Bank
from time to time may reasonably request.
8. The Borrower will permit representatives of the
Bank, whether or not employed by the Bank, to visit and inspect
any of the properties of the Borrower or any Guarantor, to
examine all its books of account, records, reports and other
papers and to make extracts thereof, and to discuss its affairs,
finances and accounts with their respective officers, employees
and independent certified public accountants, all at such times
and as often as the Bank may reasonably request upon reasonable
prior notice.
<PAGE>
4.2 Certificates.
Simultaneously with each delivery of financial
statements pursuant to subsection 4.1(a)(ii) of this Agreement,
the Borrower will deliver to the Bank a certificate of its chief
financial officer, chief executive officer or chief operating
officer in the form set forth on the attached Exhibit D.
4.3 Timely Payments.
Each of Borrower and the Guarantors will make full and
timely payment of the principal of and interest and premium, if
any, on all of its debt, whether now existing or hereafter
arising, including, without limitation the Notes, except debt
which the Borrower is contesting in good faith for which it has
established reserves in accordance with GAAP.
4.4 Compliance with Laws.
Each of the Borrower and the Guarantors will comply
with all Requirements of Law applicable to it, provided, that it
shall not be required to comply with any such Requirements of Law
if such failure to comply would not have a material adverse
effect on the financial condition or operations of the Borrower
and the Guarantors taken as a whole.
4.5 Maintenance of Properties, Insurance and Corporate
Existence.
Each of the Borrower and the Guarantors shall:
1. Maintain its properties in good condition and in
accordance with reasonable business practice, reasonable wear and
tear excepted, and make all necessary renewals, replacements,
additions, betterments and improvements thereto;
2. Keep its properties and business insured against
fire and other hazards ("All Risk" coverage); maintain public
liability coverage, including, without limitation, coverage for
products liability and claims for personal injuries or death; and
maintain all worker's compensation, employment or similar
insurance as may be required by applicable law in amounts and
with companies reasonably satisfactory to the Bank to the same
extent and covering such risks as is customary in the same or a
similar business. The Borrower shall furnish to the Bank, upon
request, certificates or other satisfactory evidence of
compliance with the foregoing insurance provisions.
3. Comply with the requirements of the Foreign
Corrupt Practices Act of 1977 and keep true books of records and
accounts in which full and correct entries will be made of all
its business transactions, and reflect in its financial
statements adequate accruals and appropriations to reserves, all
in accordance with GAAP;
4. Maintain the principal nature of its business; and
5. Do or cause to be done all things necessary to
preserve and keep in full force and effect its existence,
material rights and material franchises.
<PAGE>
4.6 Tax and Other Liens.
Comply with all statutes and government regulations of
which it has constructive knowledge (except where the failure to
comply would not have a material adverse effect on the Borrower's
financial condition, business or operations taken as a whole) and
pay and discharge, in a manner consistent with reasonable
business practice, all taxes, assessments, governmental charges
or levies, or lawful claims for labor, supplies, rent and other
obligations made against it or its property which, if unpaid,
might become a lien or charge against the Borrower or any
Guarantor or their property, except liabilities being contested
in good faith and against which the Borrower or any such
Guarantor shall set up reserves in amounts and in form in
accordance with GAAP.
4.7 Litigation.
Promptly advise the Bank of the commencement or overt
threat of litigation, including arbitration proceedings and any
proceedings before any governmental agency against the Borrower
or any Guarantor, which is reasonably likely to have a materially
adverse effect upon its financial condition or operations or
otherwise or where the amount involved or claimed is $500,000 or
more with respect to any such claim or proceeding.
4.8 Notice of Certain Events.
Give prompt written notice to the Bank of:
1. any dispute that may arise between the Borrower or
any Guarantor and any Governmental Authority which, if resolved
adversely against the Borrower or such Guarantor, would have a
material adverse effect on its financial condition or operations
or its ability to perform under the Loan Documents;
2. any labor controversy resulting or likely to result
in a strike or work stoppage against the Borrower or any
Guarantor which would have a material adverse effect on its
financial condition or operations or its ability to perform under
the Loan Documents;
3. any proposal by any public authority to acquire the
assets or business of the Borrower or any Guarantor by eminent
domain, condemnation or like proceeding, if the Borrower has
notice thereof, which would have a material adverse effect on its
financial condition or operations or its ability to perform under
the Loan Documents;
4. any proposed or actual change of the Borrower's
name or corporate structure; and
5. any other matter which has resulted or is
reasonably likely to result in a material adverse change in the
Borrower's or any Guarantor's financial condition or operations.
<PAGE>
4.9 Subsidiary Guarantees.
Promptly notify the Bank of the formation of any
subsidiary if it is a Significant Subsidiary of the Borrower and
cause such Significant Subsidiary to execute and deliver to the
Bank a Guaranty in the form of Exhibit F, together with the
requisite board resolutions authorizing such Guaranty.
4.10 Environmental Laws.
1. Comply with, and ensure compliance by all tenants
and subtenants, if any, with, all applicable Environmental Laws
and obtain and comply in all material respects with and maintain,
and ensure that all tenants and subtenants obtain and comply in
all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by
applicable Environmental Laws except to the extent that failure
to do so could not be reasonably expected to have a material
adverse effect on the financial condition or operations of the
Borrower or any Guarantor;
2. Conduct and complete in all material respects all
investigations, studies, sampling and testing, and all remedial,
removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders
and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being
contested in good faith by appropriate proceedings and the
pendency of such proceedings could not be reasonably expected to
have a material adverse effect on the financial condition or
operations of the Borrower or any Guarantor; and
3. Defend, indemnify and hold harmless the Bank and
its employees, agents officers and directors, from and against
any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of,
or in any way relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the
operations of the Borrower, any of its subsidiaries or the
Properties, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without
limitation, attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation
expenses, except to the extent that any of the foregoing arise
out of the gross negligence or willful misconduct of the party
seeking indemnification therefor. The agreements in this
paragraph shall survive repayment of the Notes and all other
amounts payable hereunder.
<PAGE>
SECTION 5 NEGATIVE COVENANTS
The Borrower covenants and agrees that, on and after the
execution of this Agreement and until each of the Notes and all
other amounts due under this Agreement are paid in full:
5.1 Fundamental Changes.
The Borrower shall not (a) merge or consolidate with
any other entity, except that Borrower may consolidate with or
merge into any other entity if (i) the Borrower is the surviving
entity, and (ii) immediately after giving effect thereto no
Default or Event of Default shall have occurred or be continuing
or (b) except in the ordinary course of business, sell, lease,
transfer or otherwise dispose of all or a substantial portion of
its assets or sell any of its properties with the intention of
leasing it back, except with the Bank's approval, which shall not
unreasonably be withheld.
5.2 Liens.
The Borrower will not cause or permit any of its
properties, assets or revenues to be subject to any Lien, except:
1. Liens under or deposits in connection with or to
secure worker's compensation, unemployment, social security or
similar legislation other than ERISA;
2. Tax liens which are being contested in good faith
and in compliance with this Agreement;
3. Liens listed on Schedule 5.2 attached hereto or
any Lien in favor of the Bank;
4. Liens arising in the ordinary course of business
not incurred in connection with the borrowing of money or the
obtaining of advances; and
5. Liens arising in the ordinary course of business
in connection with the payment of a deferred purchase price of
any of its assets;
provided, that in the case of paragraphs (d) and (e) such Liens
may not in the aggregate materially impair the use or value of
the assets of the Borrower in the conduct of its business.
<PAGE>
5.3 Limitation on Indebtedness.
Neither the Borrower nor any Guarantor shall create,
incur, assume or suffer to exist any Indebtedness except:
1. Indebtedness of the Borrower under this
Agreement and any other Indebtedness of the Borrower to the Bank;
2. Indebtedness of the Borrower or any Guarantor
existing on the date of this Agreement and set forth on the
attached Schedule 5.3, which Indebtedness may not be renewed,
extended or refinanced;
3. Indebtedness of the Borrower which is subordinated
to the Indebtedness created hereunder, upon terms and conditions
satisfactory to the Bank in its sole discretion, as evidenced by
the Bank's prior written consent;
4. Indebtedness of the Borrower to any Guarantor and
of any Guarantor to the Borrower; and
5. Indebtedness incurred in the ordinary course of
the Borrower's business, including deferred purchase price
obligations.
5.4 Guaranteed Obligations.
Neither the Borrower nor any Guarantor shall assume,
guarantee, endorse or otherwise be or become directly or
contingently liable or responsible (including, but not limited
to, an agreement to purchase an obligation, stock, assets, goods
or services or to supply or advance any funds, assets, goods or
services, or an agreement to maintain or cause such person to
maintain a minimum working capital or net worth or otherwise to
assure the creditors of any Person against loss) for the
obligations of any Person except (a) guarantees by endorsement of
negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business or (b) guarantees
of obligations of its executive officers in an amount which,
together with any loans outstanding permitted pursuant to Section
5.5(d) hereof, do not to exceed $300,000 for any one officer and
not more than $500,000 in the aggregate for all executive
officers, provided that such guarantees are for the sole purpose
of the purchase by those officers of capital stock of the
Borrower or (c) guarantees made in the ordinary course of
business by the Borrower of obligations of any Guarantor or by
any Guarantor of obligations of the Borrower, which obligations
are otherwise permitted under this Agreement.
<PAGE>
5.5 Loans, Advances, Investments.
Neither the Borrower nor any Guarantor shall make or
permit to exist any loans or advances to, or purchase or
otherwise acquire any stock, or other securities or evidences of
indebtedness of, or make or permit to exist any investment, or
acquire any interest whatsoever, in any other Person, except for:
1. investments listed on the attached Schedule 5.5;
2. short term obligations of the United States
Government;
3. prime commercial paper and certificates of deposit
issued by a domestic commercial banking institution which has
capital and surplus in excess of $500,000,000 and certificates of
deposit not exceeding $500,000 in the aggregate issued by banks
with capital and surplus of less than $500,000,000;
4. loans to officers or employees of the Borrower which
are evidenced by promissory notes and which, together with any
guarantees outstanding permitted pursuant to Section 5.4(b)
hereof, do not exceed $300,000 for any one officer or employee
and not more than $500,000 in the aggregate at any time;
5. any municipal bonds, other tax exempt bonds, funds
and notes, preferred stock and securities of utility companies
(which utility securities shall not exceed $5,000,000 in the
aggregate); provided, that all such securities are rated at least
"Investment Grade" or better by Moody's Investors Service, Inc.
or Standard and Poor's Corporation (or an equivalent rating by
another nationally recognized credit rating agency of similar
standing);
6. investment and loans by the Borrower in the
Guarantors;
7. investment by the Borrower or any Guarantor in any
Person which investments in the aggregate do not exceed
$2,500,000; provided, that, such investments shall be valued at
the cost basis of such asset reduced by the amount of net cash
proceeds if any from the sale of any portion of any such
investment; and
8. money market mutual funds having assets in excess
of $2,000,000,000.
<PAGE>
5.6 Sale of Assets.
Neither the Borrower nor any Guarantor shall sell or
dispose of any of its assets, except for 1. obsolete or used
equipment or personal property in accordance with prior practice
and sales of inventory in the ordinary course of business and 1.
the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the
compromise or collection thereof and (c) sales of investments in
the ordinary course of business for fair value.
5.7 Fiscal Year.
The Borrower shall not permit the fiscal year to end on
a day other than October 31.
5.8 Prohibited Transactions.
The Borrower shall not enter into any transaction or
transfer, in any manner, either directly or indirectly, any cash,
property, or other assets to any of its Affiliates unless such
transaction is (a) otherwise permitted under this Agreement (b)
in the ordinary course of the Borrower's business and (c) upon
fair and reasonable terms no less favorable to the Borrower than
it would obtain in a comparable arm's-length transaction with a
Person which is not an Affiliate.
SECTION 6 FINANCIAL COVENANTS
The Borrower covenants and agrees that on and after the
execution of this Agreement and until each of the Notes and all
other amounts due under this Agreement are paid in full, it shall
not:
6.1 Consolidated Tangible Net Worth.
Permit Consolidated Tangible Net Worth of the Borrower
plus subordinated debt permitted under this Agreement to be less
than $63,800,000 plus the net cash proceeds received by the
Borrower from the issuance after October 31, 1994 of any common
or preferred stock; provided that in calculating Consolidated
Tangible Net Worth any investment in any persons permitted
pursuant to Section 5.5(g) shall be excluded.
6.2 Unsubordinated Liabilities to Tangible Net Worth.
Permit the Ratio of Consolidated Total Unsubordinated
Liabilities to Consolidated Tangible Net Worth plus subordinated
debt permitted under this Agreement to be greater than 1.0 to 1.0
at any time.
<PAGE>
6.3 Debt Service Coverage Ratio.
Permit the Debt Service Coverage Ratio to fall below
2.0 to 1 at any interim quarter end or fiscal year end; provided,
that such ratio shall be reduced to 1.75 to 1 if (i) all loans
outstanding to Chase Manhattan Bank N.A. ("Chase"), have been
repaid in full or (ii) the Second Amendment to Loan Agreement
dated December 20, 1991 between the Borrower and Chase is amended
to provide a Debt Service Coverage Ratio of 1.75 to 1.0 or less.
6.4 Losses.
Suffer a loss on a consolidated basis in any two
consecutive quarterly periods or in any fiscal year.
6.5 Quick Ratio.
Permit the Quick Ratio to be less than 1.5 to 1.0 at
any time.
SECTION 7 EVENTS OF DEFAULT
7.1 Events of Default.
Any of the following events shall be an "Event of
Default":
1. The Borrower shall fail to pay, when due or
payable, any principal of any Note when due in accordance with
the terms thereof or the Borrower shall fail to pay any interest
on any Note or any other amount payable hereunder, within 10 days
of when due and payable;
2. The Borrower shall (i) default in the observance or
performance of any agreement contained in Section 5 or 6 of this
Agreement or (ii) the Borrower shall default in the observance or
performance of any other agreement contained in this Agreement or
any Note (other than as provided in paragraphs a, b(i) and (c) of
this Section) and such default shall continue unremedied for a
period of 30 days; or
3. Any representation or warranty made by the Borrower
or any Guarantor under or in connection with any of the Loan
Documents which is contained in any certificate, document or
financial or other statement furnished at any time under or in
connection with this Agreement shall prove to be false or
misleading in any material respect when made or given or deemed
made or given;
4. (i) the Borrower or any Guarantor shall (A) fail to
pay Indebtedness (excluding the Notes) in an amount exceeding
$500,000 in the aggregate, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise)
and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating
to such Indebtedness, or (B) fail to perform or observe any term,
covenant or condition on its part to be performed or observed
under any agreement or instrument relating to such Indebtedness
or contained in any instrument or agreement evidencing, securing
or relating thereto when required to be performed or observed, if
the effect of such failure to perform or observe is to accelerate
or to permit the acceleration of, or to accelerate after the
giving of notice or passage of time, or both, if required, the
maturity of such Indebtedness; or (ii) any such Indebtedness
shall be declared to be due and payable, or required to be paid
(other than by a regularly scheduled required prepayment) prior
to the stated maturity thereof;
<PAGE>
5. The Borrower or any Guarantor shall (i) voluntarily
commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code or any other federal or state
bankruptcy, insolvency or similar law, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate
manner, any such proceeding or the filing of any such petition,
(iii) apply for or consent to the employment of a receiver,
trustee, custodian, requestor or similar official for it or for a
substantial part of its property, (iv) file an answer admitting
the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or
fail generally to pay its debts as they become due, or (vii) take
corporate action for the purpose of effecting any of the
foregoing;
6. An involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any
Guarantor or of a substantial part of its property under Title 11
of the United States Code or any other federal or state
bankruptcy, insolvency or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator or similar official
for the Borrower or any Guarantor or for a substantial part of
its property, or (iii) the winding-up or liquidation of the
Borrower or any Guarantor; and such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall continue unstayed and in
effect for 60 days;
7. The entering of a final judgment or judgments for
the payment of money in excess of $500,000 against the Borrower
or any Guarantor, which judgment is not bonded, stayed or
discharged within 30 days;
8. A "reportable event" (as defined in Section 4043 of
ERISA) having a material adverse effect on the business or
operations of the Borrower shall have occurred;
9. Either Constantine Macricostas or Michael J.
Yomazzo ceases to maintain effective day-to-day control of the
Borrower and a replacement acceptable to the Bank does not assume
such duties within 120 days of such cessation; or
10. There shall have occurred any material
misrepresentation, breach, default or event of default under any
Guaranty, which has not been cured within any applicable grace
period thereunder or any Guaranty ceases to be in full force and
effect.
7.2 Remedies.
If any Event of Default shall occur and be continuing,
the Bank may, (i) declare the Commitment to be terminated,
whereupon the same shall forthwith terminate, and (ii) declare
all amounts owing under this Agreement and the Notes (whether or
not such obligations shall be contingent or unmatured) to be
forthwith due and payable, whereupon all such amounts shall
become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that, in the
case of any Event of Default referred to in subsection 7.1(e) and
(f) above with respect to the Borrower, the Commitment shall be
immediately terminated, and the all such amounts shall be
immediately due and payable without notice, presentment, demand,
protest or other formalities of any kind, all of which are hereby
expressly waived by the Borrower.
<PAGE>
SECTION 8 DEFINITIONS
8.1 Definitions.
As used in this Agreement, the following terms shall
have the following meanings:
"Affiliate" shall mean as to any Person, any other
Person (other than a subsidiary) which, directly or indirectly,
is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of
a Person means the power, directly or indirectly, to direct or
cause the direction of the management and policies of such
Person, whether through ownership of voting securities, by
contract or otherwise.
"Agreement" shall mean this Revolving Credit and Term
Loan Agreement, as amended from time to time.
"Alternate Base Rate" shall mean for any day, a rate
per annum (rounded upwards, if necessary to the next 1/16 of 1%)
equal to the greatest of (a) the Prime Rate in effect on such
day, (b) the Base CD Rate in effect on such day plus 1-1/2% and
(c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the
rate of interest per annum publicly announced from time to time
by the Bank as its prime rate in effect at its principal office
in New York City (each change in the Prime Rate to be effective
on the date such change is publicly announced); "Base CD Rate"
shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which is
one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate; "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market
rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business Day,
the next preceding Business Day) by the Board of Governors of the
Federal Reserve System (the "Board") through the public
information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board,
be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not
be so reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Bank from three New York City
negotiable certificate of deposit dealers of recognized standing
selected by it; "C/D Assessment Rate" shall mean for any day the
net annual assessment rate (rounded upward to the nearest 1/100th
of 1%) determined by the Bank to be payable on such day to the
Federal Deposit Insurance Corporation ("FDIC") or any successor
for FDIC's insuring time deposits made in dollars at offices of
the Bank in the United States and "Federal Funds Effective Rate"
shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for the day of
such transactions received by the Bank from three federal funds
brokers of recognized standing selected by it. If for any reason
the Bank shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain
the Base CD Rate or the Federal Funds Effective Rate, or both,
for any reason, including the inability or failure of the Bank to
obtain sufficient quotations in accordance with the terms
thereof, the Alternate Base Rate shall be determined without
regard to clause (b) or (c), or both, of the first sentence of
this definition, as appropriate, until the circumstances giving
rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Three-
Month Secondary CD Rate or the Federal Funds Effective Rate shall
be effective on the effective day of such change in the Prime
Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate, respectively.
<PAGE>
"Alternate Base Rate Loans" shall mean Loans the rate
of interest applicable to which is based upon the Alternate Base
Rate.
"Availability Period" shall mean each of the following
periods: March 1, 1995 to and including February 29, 1996; March
1, 1996 to and including February 28, 1997: and March 1, 1997 to
and including February 28, 1998.
"Availability Termination Date" shall mean the last
day of an Availability Period.
"Available Revolving Credit Commitment" shall mean at
any time the Revolving Credit Commitment minus the aggregate
outstanding principal amount of Revolving Credit Loans.
"Borrowing Date" shall mean any Business Day specified
in a notice pursuant to subsection 1.3 or 1.8 as a date on which
the Borrower requests the Bank to make Loans hereunder.
"Business Day" shall mean a day other than a Saturday,
Sunday or other day on which commercial banks in New York City
are authorized or required by law to close.
"Carryover Amount" shall mean for each Availability
Period the lesser of (i) $3,000,000 or (ii) an amount equal to
the Available Revolving Credit Commitment as of the last day of
the immediately preceding Availability Termination Date.
"Closing Date" shall mean the date on which the
conditions in subsyection 3.1 are met.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" shall mean the obligation of the Bank to
make Loans to the Borrower in an aggregate principal amount not
to exceed U.S. $30,000,000, as such amount may be reduced from
time to time in accordance with this Agreement.
"Commitment Termination Date" shall mean February 28,
1998.
"Consolidated Current Liabilities" shall mean, at any
date all liabilities of the Borrower and its subsidiaries that
would be classified as current liabilities in accordance with
GAAP as in effect from time to time determined on a consolidated
basis at the date of determination thereof including, without
limitation, (i) all Indebtedness payable on demand or within one
year after the date on which the determination is made; (ii)
final maturities, installments, prepayments and sinking fund
payment of Indebtedness required to be made within one year after
which the determination is made; (iii) all Revolving Credit Loans
and the current portion of any Term Loans; and (iv) current
liabilities of any Person (other than the Borrower or its
subsidiaries) which are guaranteed by the Borrower or its
subsidiaries.
<PAGE>
"Consolidated Tangible Net Worth" of any Person shall
mean the total of the sum of amounts shown on the most recent
balance sheet of such person and its consolidated subsidiaries
determined on a consolidated basis in accordance with GAAP as (i)
the par or stated value of all outstanding capital stock of such
person plus (ii) paid in capital or capital surplus relating to
such capital stock plus (iii) any retained earnings or earned
surplus plus or minus any currency translation adjustment minus
(A) any deficit, (B) all assets which would be classified as
intangible assets under GAAP, including, without limitation,
goodwill, licenses, patents, trademarks, trade names, and
copyrights, and (C) treasury stock.
"Consolidated Total Unsubordinated Liabilities" shall
mean for any period, all of the indebtedness of the Borrower and
its subsidiaries determined on a consolidated basis in accordance
with GAAP in effect from time to time, other than subordinated
debt permitted by subsection 5.3 hereof.
"Debt Service Coverage Ratio" shall mean the ratio of
consolidated earnings before interest and taxes (excluding any
equity earnings from investments) for the preceding four fiscal
quarters to the sum of consolidated interest and the current
expense portion of long term debt for the four succeeding fiscal
quarters.
"Default" shall mean any of the events specified in
Section 7, whether or not any requirement for the giving of
notice, the lapse of time, or both, or any other condition, has
been satisfied.
"Environmental Laws" shall mean any and all foreign,
Federal, state, local or municipal laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, requirements
of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human
health or the environment, as now or may at any time hereafter be
in effect.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"Eurodollar Base Rate" shall mean with respect to each
day during each Interest Period pertaining to a Eurodollar Loan,
the rate per annum equal to the rate at which the Bank is offered
Dollar deposits at or about 10:00 a.m., New York City time, two
Working Days prior to the beginning of such Interest Period in
the interbank eurodollar market which the eurodollar and foreign
currency and exchange operations in respect of its Eurodollar
Loans are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein and
in an amount comparable to the amount of its Eurodollar Loan to
be outstanding during such Interest Period.
<PAGE>
"Eurodollar Loans" shall mean Loans the rate of
interest applicable to which is based upon the Eurodollar Rate.
"Eurodollar Rate" shall mean with respect to each day
during each Interest Period pertaining to a Eurodollar Loan, a
rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Reserve Requirements" shall mean for any
day as applied to a Eurodollar Loan, the aggregate (without
duplication) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves
under any regulations of the Board of Governors of the Federal
Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such
Board) maintained by a member bank of such System.
"Event of Default" shall mean any of the events
specified in section 7.1 provided that any requirement for the
giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"GAAP" shall mean generally accepted accounting
principles in the United States of America as in effect from time
to time, applied on a basis consistent with those utilized in
preparing the audited financial statements referred to in Section
2.5; provided, however, that if a change occurs in such
principles which has a significant effect on the covenants
contained in Section 6 hereof, the Bank and the Borrower agree to
discuss in good faith appropriate amendments to such covenants.
"Governmental Authority" shall mean any nation or
government, any state or other political subdivision thereof, any
other entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Guarantors" shall mean Photronics-Toppan Texas, Inc.,
Beta Squared, Inc., Photronics California, Inc. and Photronics
Financial Services, Inc.
"Guaranty" shall mean a Guaranty substantially in the
form of Exhibit F hereto delivered by a Guarantor.
"Hazardous Materials" shall mean any hazardous
materials, hazardous wastes, hazardous constituents, hazardous or
toxic substances, petroleum products (including crude oil or any
fraction thereof), defined or regulated as such in or under any
Environmental Law.
<PAGE>
"Indebtedness" of any Person at any date shall mean,
(a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices), (b)
any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations
of such Person under financing leases, (d) all obligations of
such Person in respect of acceptances issued or created for the
account of such Person and (e) all liabilities secured by any
Lien on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment
thereof.
"Interest Payment Date" (a) as to any Alternate Base
Rate Loan, the last day of each March, June, September and
December and (b) as to any Eurodollar Loan having an Interest
Period of three months or less, the last day of such Interest
Period, and (c) as to any Eurodollar Loan having an Interest
Period longer than three months, each day which is three months,
or a whole multiple thereof, after the first day of such Interest
Period and the last day of such Interest Period.
"Interest Period" with respect to any Eurodollar Loan:
1. Initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with
respect thereto; and
2. Thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to
the Agent not less than three Working Days prior to the last day
of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:
3. If any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day that is not a Working Day, such
Interest Period shall be extended to the next succeeding Working
Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Working
Day;
<PAGE>
4. Any Interest Period that would otherwise extend
beyond an Availability Termination Date or beyond the date final
payment is due on a Term Loan shall end on the Availability
Termination Date or such date of final payment, as the case may
be;
5. Any Interest Period pertaining to a Eurodollar
Loan that begins on the last Working Day of a calendar month (or
on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period) shall end
on the last Working Day of a calendar month; and
6. The Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan
during an Interest Period for such Loan.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement
of any kind or nature whatsoever (including, without limitation,
any conditional sale or other title retention agreement and any
financing lease having substantially the same economic effect as
any of the foregoing).
"Loan Documents" shall mean this Agreement, the Notes
and the Guarantees.
"Loans" shall mean any loans made by the Bank
hereunder.
"Material Environmental Amount" shall mean an amount
payable by the Borrower and/or its subsidiaries in excess of
$1,000,000 for remedial costs, compliance costs, compensatory
damages, punitive damages, fines, penalties or any combination
thereof.
"Materials of Environmental Concern" shall mean any
gasoline or petroleum (including crude oil or any fraction
thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, defined or regulated as such in
or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"Notes" shall mean the Revolving Credit Note and the
Term Notes.
"Pension Plan" shall have the meaning asigned in
Section 2.17.
"Person" shall mean an individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority
or other entity of whatever nature.
<PAGE>
"Properties" shall have the meaning assigned in Section
2.16.
"Quick Assets" shall mean at any date the sum of cash,
cash equivalents and accounts receivable of the Borrower and its
consolidated subsidiaries determined on a consolidated basis.
"Quick Ratio" shall mean the ratio of Quick Assets to
Consolidated Current Liabilities.
"Requirement of Law" shall mean with respect to any
Person, the Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of any
arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is
subject.
"Revolving Credit Commitment" shall mean for each
Availability Period $10,000,000 plus the Carryover Amount, if
any, for such Period, as such amount may be reduced from time to
time in accordance with this Agreement.
"Revolving Credit Loans" shall mean the meaning
assigned in subsection 1.1 hereof.
"Revolving Credit Note" shall mean the meaning assigned
in subsection 1.2.
"SEC" shall mean the Securities and Exchange
Commission.
"Significant Subsidiary" shall mean the meaning set
forth in Rule 1-02 of Regulation S-X promulgated by the
Securities and Exchange Commission.
"Subsidiary" shall mean with respect to any Person, a
corporation, partnership or other entity of which shares of stock
or other ownership interests having ordinary voting power (other
than stock or such other ownership interests having such power
only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned,
or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise qualified, all references to a
"subsidiary" or to "subsidiaries" in this agreement shall refer
to a subsidiary or subsidiaries of the Borrower.
"Term Loans" shall have the meaning assigned in
subsection 1.6.
<PAGE>
"Term Note" shall have the meaning assigned in
subsection 1.7
"Type" shall mean as to any Loan, its nature as an
Alternate Base Rate Loan or Eurodollar Loan.
"Working Day" means any Business Day on which dealings
in foreign currencies and exchange between banks may be carried
on in London, England.
8.2 Other Definitional Provisions.
1. Unless otherwise specified therein, all terms
defined in this Agreement shall have the defined meanings when
used in the Notes or any certificate or other document made or
delivered pursuant hereto.
2. As used herein and in the Notes, and any
certificate or other document made or delivered pursuant hereto,
accounting terms relating to the Borrower and its subsidiaries
not defined in subsection 8.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.
3. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and Section, Schedule and Exhibit references
are to this Agreement unless otherwise specified.
4. The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
SECTION 9 MISCELLANEOUS
9.1 Expenses and Taxes.
The Borrower will pay:
1. all reasonable out-of-pocket expenses of the Bank,
including, without limitation, all reasonable disbursements and
fees of counsel for the Bank, in connection with the preparation
and administration of this Agreement, the Notes, the Guarantees,
and the transactions contemplated hereunder, or any waiver or
amendment of any provision hereof;
2. all reasonable out-of pocket expenses of the Bank,
including, without limitation, all reasonable disbursements and
fees of counsel for the Bank, with respect to the enforcement or
preservation of any rights under this Agreement, the Notes or any
other Loan Document;
<PAGE>
3. all stamp and documentary taxes, assessment fees,
or other charges or levies of any Governmental Authority which
are incurred by or made against the Bank in connection with this
Agreement or any of the Notes or any modification thereof and
will save the Bank harmless from and against any and all
liabilities with respect to or resulting from any delay in paying
or omission to pay such taxes and fees.
4. to pay, indemnify and hold the Bank harmless from
and against any and all other liabilities, obligations, losses,
damages, penalties, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to
the execution, delivery, enforcement, performance and
administration of this Agreement, the Notes or any other Loan
Document; provided, that the Borrower shall have no obligation
hereunder to the Bank with respect to such indemnified
liabilities arising from the gross negligence or willful
misconduct of the Bank.
9.2 Survival.
All representations, warranties and covenants made by
the Borrower or any Guarantor in this Agreement, the Loan
Documents, or in any certificate or other instrument delivered by
the Borrower or any Guarantor or on their behalf in connection
with this Agreement, will be considered to have been relied on by
the Bank and will survive the execution and delivery of this
Agreement and the Notes.
9.3 Right of Setoff.
Upon the occurrence and during the continuance of any
Event of Default the Bank may, and is hereby authorized to, at
any time and from time to time, without notice to the Borrower
(any such notice being expressly waived by the Borrower) and to
the fullest extent permitted by law, set off and apply any and
all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by the Bank to or for the credit or the account of the Borrower
against any and all obligations of the Borrower now or hereafter
existing under any Loan Document, irrespective of whether or not
the Bank shall have made any demand hereunder or thereunder and
although such obligation may be contingent or unmatured. The
Bank agrees promptly to notify the Borrower after any such set-
off and application made by the Bank, provided that the failure
to give such notice shall not affect the validity of such set-off
and application. The rights of the Bank under this subsection
9.3 are in addition to the other rights and remedies (including,
without limitation, other rights of set-off) which the Bank may
have.
<PAGE>
9.4 Governing Law; Submission to Jurisdiction.
1. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.
2. The Borrower hereby irrevocably and
unconditionally
a. submits for itself and its property in any
legal action or proceeding relating to this Agreement and the
other Loan Documents to which it is a party, or for recognition
and enforcement of any judgment in respect thereof, to the non-
exclusive general jurisdiction of the courts of the State of New
York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
b. consents that any such action or proceeding
may be brought in such courts and waives any objection that it
may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or
claim the same;
c. agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to the Borrower at its address set
forth in subsection 9.11 or at such other address of which the
Bank shall have been notified pursuant thereto;
d. agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted
by law or shall limit the right to sue in any other jurisdiction;
and
e. waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this subsection any special,
exemplary, punitive or consequential damages.
9.5 Waiver of Jury Trial.
THE BORROWER AND THE BANK HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.6 Forbearance Not a Waiver.
Neither the failure to exercise or any delay on the
part of the Bank to exercise any right, remedy, power or
privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right remedy, power or
privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
<PAGE>
9.7 Modifications; Severability.
This Agreement shall become effective upon execution by
the parties hereto. No modification or amendment hereof shall be
effective unless same shall be in writing and signed by the Bank
and the Borrower. To the extent any provision of this Agreement
is not enforceable under applicable law, such provision shall be
deemed null and void and shall have no effect on the remaining
provisions of this Agreement.
9.8 Transfer of Bank's Interest.
The Borrower hereby agrees that the Bank, in its sole
discretion, may freely sell, assign, participate or otherwise
transfer to any financial or lending institution or any Federal
Reserve Bank any rights hereunder or other interests in all or
any portion of the indebtedness, liabilities or obligations
arising in connection with or in any way related to the financing
transactions of which this Agreement is a part. In the event of
any such transfer, the transferee may, in the Bank's sole
discretion, have and enforce all the rights, remedies and
privileges of the Bank. The Borrower consents to the release by
the Bank to any potential transferee, so long as such transferee
is a financial institution, of any and all information
(including, without limitation, financial information) pertaining
to the Borrower as the Bank, in its sole discretion, may deem
appropriate. If such transferee so participates with the Bank in
making loans or advances hereunder or under any other agreement
between the Bank and the Borrower, the Borrower hereby grants to
such transferee and such transferee shall have and is hereby
given a continuing lien and security interest in any money,
securities or other property of the Borrower in the custody or
possession of such transferee, including the right of setoff, to
the extent of such transferee's participation in the obligations
of the Borrower to the Bank.
9.9 Binding Effect/Assignment.
This Agreement is entered into for the benefit of, and
shall be binding upon the parties hereto and their respective
successors and assigns. This Agreement may not be assigned by
Borrower without the prior written consent of the Bank.
9.10 Entire Agreement; Counterparts.
This Agreement and the other Loan Documents represent
the entire agreement between the parties and supersedes and
rescinds all prior agreements relating to the subject matter
hereof unless otherwise indicated herein and cannot be changed or
terminated orally. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered
shall be an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one
such counterpart.
<PAGE>
9.11 Notices.
Any notice provided for under this Agreement to be
effective shall be in writing and unless otherwise expressly
provided herein shall be deemed to have been duly given or made
when delivered by hand or five days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed to such party at the address set forth below;
provided, that, any notice, request or demand upon the Bank
pursuant to Section 1 shall not be effective until received. Any
party and any representative designated below may, by notice to
the other in the manner provided herein, change its address for
receiving such notices. All notices and consents on behalf of
any party hereto shall be signed by a corporate officer of such
party and shall be sent to:
If to the Borrower:
15 Secor Road
Brookfield, CT 06804
Attention: Mr. Robert Bollo
With copy to:
Photronics, Inc.
15 Secor Road
Brookfield, CT 06804
Attention: General Counsel
If to the Bank:
270 Park Avenue
New York, NY 10017
Attention: Chemical Connecticut - Credit Deputy
With copies to:
Chemical Connecticut Corporation
Three Landmark Square
Stamford, CT 06901
Attention: Laura A. Mahoney
and
Day, Berry & Howard
One Canterbury Green
Stamford, CT 06901
Attention: F. Lee Griffith
<PAGE>
9.12 Headings.
The paragraph and subparagraph headings herein are for
convenience of reference only and do not modify or amend the
terms and provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on March 1, 1995, to be effective as of the date first
above written.
PHOTRONICS, INC.
By:____ROBERT J. BOLLO_______
Its: Vice President/Finance
CHEMICAL BANK
By:______JOSEPH SACHS________
Its: Vice President
PLAB\LOAN.EDG/p
