SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)*
LASER POWER CORPORATION
(Name of Issuer)
Common Stock, par value $.001 per share
(Title of Class of Securities)
51806K 10 4
(CUSIP Number)
Ronald Basso
Buchanan Ingersoll Professional Corporation
One Oxford Centre, 20th Floor
301 Grant Street
Pittsburgh, PA 15219
412-562-3943
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 20, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(e), 13d-1(f) or 13d-1(g), check the following box .
---
Note: Schedules filed in paper format shall include a signed
original and five copies of the Schedule, including all exhibits.
See Rule 13d-7(b) for other parties to whom copies are to be
sent.
---------------------------
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
Page 2 of 8
1 NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS:
II-VI Incorporated
I.R.S. IDENTIFICATION NO: 25-1214948
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
---
(b)
---
3 SEC USE ONLY
4 SOURCE OF FUNDS
BK
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED TO ITEMS
2(d) OR 2(e)
---
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
Number of Shares 7 SOLE VOTING POWER
Beneficially Owned by 1,252,100
Each Reporting Person 8 SHARED VOTING POWER
With 0
9 SOLE DISPOSITIVE POWER
1,252,100
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,252,100 Shares
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
---
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.9%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
Page 3 of 8
This Amendment No. 6 to Schedule 13D (the "Amendment") amends the
Schedule 13D originally filed on September 29, 1999, and later
amended on October 7, 1999, February 3, 2000, June 5, 2000,
June 12, 2000 and June 15, 2000 by II-VI Incorporated, a Pennsylvania
corporation, with respect to its ownership of the common stock, par value
$.001 per share, of Laser Power Corporation, a Delaware corporation.
This Amendment No. 6 is being filed to amend Items 4 and 7 of the
Schedule 13D; however, Items 1 through 6 are restated in their
entirety for convenience.
Item 1. Interest In Securities Of The Issuer
This statement relates to the common stock, par value $.001 per
share (the "Laser Power Common Stock"), of Laser Power
Corporation, a Delaware corporation ("Laser Power"). The
principal executive offices of Laser Power are located at 36570
Briggs Road, Murrieta, California 92563.
Item 2. Identity And Background
This statement is being filed by II-VI Incorporated, a
Pennsylvania corporation (the "Reporting Person"). The Reporting
Person's principal executive offices and principal business are
located at 375 Saxonburg Boulevard, Saxonburg, Pennsylvania
16056.
The Reporting Person designs, manufactures and markets optics and
electro-optical components, devices and materials for infrared,
near-infrared, visible light, x-ray and gamma-ray
instrumentation. The Reporting Person's infrared products are
used primarily in high-power CO2 (carbon dioxide) lasers. These
lasers are used for industrial processing throughout the world.
The Reporting Person manufactures near-infrared and visible-light
products for industrial, scientific and medical applications and
solid-state (such as YAG and YLF) lasers. The Reporting Person
manufactures and markets solid-state x-ray and gamma-ray detector
products for the nuclear radiation detection industry. The
majority of the Reporting Person's revenues are attributable to
the sale of optical components for the industrial laser
processing industry.
The name, business address and present principal occupation or
employment of any corporation or other organization in which such
employment is conducted and the citizenship of each director and
executive officer of the Reporting Person is set forth in Annex
A, which is incorporated herein by reference.
Neither the Reporting Person nor, to the best knowledge of the
Reporting Person, any person listed in Annex A, has, during the
last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
Item 3. Source And Amount Of Funds Or Other Consideration
The Reporting Person purchased 1,250,000 shares of the Laser
Power Common Stock on September 21, 1999 for an aggregate
purchase price of $2,750,000. The Reporting Person borrowed 100%
of these funds from PNC Bank, National Association, under an
Page 4 of 8
existing credit facility. This credit facility was attached as
Exhibit 1 to the original Schedule 13D and is incorporated herein
by reference.
Item 4. Purpose Of Transaction
(a) through (i). The Reporting Person originally acquired
1,250,100 shares of Laser Power Common Stock to facilitate the
acquisition of control of Laser Power by the Reporting Person by
means of a negotiated merger, the election of a majority of Laser
Power's Board of Directors, a tender offer, or otherwise. While
the Reporting Person still desires to acquire control of Laser
Power, it has abandoned its previous intention to replace the
current Laser Power Board of Directors with its own nominees and
did not solicit proxies for the Laser Power 2000 annual meeting
of stockholders.
By way of a press release dated June 20, 2000, a copy of which
is attached as Exhibit 9 and is incorporated herein by
reference, the Reporting Person announced that it has revised its
offer to acquire Laser Power Corporation, increasing the cash component
of its offer to $2.89 per share. If the revised offer is accepted, the
stockholders of Laser Power would receive cash and common stock of the
Reporting Person in exchange for their Laser Power Common Stock and all
outstanding shares of Laser Power Common Stock would be cancelled. The
Reporting Person also announced by way of this press release that a
guaranteed floor for this transaction was set at $5.15 per share and
would be paid by the Reporting Person with a combination of cash and/or
common stock of the Reporting Person, at the Reporting Person's election,
if the volume weighted average trading price of the Reporting Person's
common stock is less than $43.46 per share for the 12 trading days prior
to the closing of the exchange offer. A ceiling for this transaction was
set at $5.65 per share.
The Reporting Person announced that the revised offer will expire at
11:59 p.m. E.D.T. on Wednesday, June 21, 2000. If, prior to its
expiration, Laser Power determines that the revised offer is
superior to Union Miniere's offer, the revised offer will
automatically be extended for two business days.
The Reporting Person also announced that financing of this proposed
transaction would be financed through a new $25 million credit facility
evidenced by an acceptance letter, a copy of which is attached as
Exhibit 10 and is incorporated herein by reference, with PNC Bank, along
with cash on hand and the current availability of over $10 million under
its existing credit facility.
If this revised offer is rejected by the Laser Power Board of
Directors or expires, the Reporting Person will evaluate whether
to continue its efforts to acquire control of Laser Power. If the
Reporting Person decides to continue its efforts to acquire control
of Laser Power, it may acquire additional securities of Laser Power
by tender offer, exchange offer or otherwise; provided that the
Reporting Person may dispose of all or any of the shares of Laser
Power Common Stock it owns at any time in the open market or in
private transactions, in any case, in compliance with applicable
securities laws. In any such acquisition of stock, the Reporting
Person would likely seek to acquire control of Laser Power, which
would likely result in changes to the directors and management of
Laser Power and which could cause the outstanding Laser Power
Common Stock to be delisted from Nasdaq.
Item 5. Interest In Securities Of The Issuer
(a) As of the date hereof, the Reporting Person
beneficially owns 1,252,100 shares, or 12.9% of the issued and
outstanding Laser Power Common Stock, based on 9,679,001 shares
of Laser Power Common Stock outstanding, as reported in the
Merger Agreement by and among Laser Power, Union Miniere USA
Inc., and ACEC, Inc. attached as Exhibit 2 to Laser Power's Form
8-K filed on June 2, 2000.
(b) The Reporting Person has the sole power to vote or
to direct the vote of, and sole power to dispose or direct the
disposition of, 1,252,100 shares of Laser Power Common Stock.
(c) On June 17, 1999, the Reporting Person purchased
100 shares of Laser Power Common Stock on the open market at a
price of $0.75 per share. On January 7, 2000, the Reporting
Person purchased an additional 2,000 shares of Laser Power Common
Stock on the open market for $2.75 per share. Both of these
transaction were effected through a broker-dealer.
Page 5 of 8
Other than these transaction and the transaction described in
Item 3 above, which item is incorporated herein by reference,
there have been no transactions with respect to Laser Power
Common Stock within the last 60 days by the Reporting Person.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
There are no contracts, arrangements, understandings or
relationships among the persons named in Item 2 or between such
persons and any other person with respect to any securities of
Laser Power except that Proxima Corporation ("Proxima"), which
was the seller of the shares of Laser Power Common Stock
purchased by the Reporting Person in the transaction described in
Item 3 hereof, was a party to a Registration Rights Agreement
dated June 13, 1997 with Laser Power and Union Miniere, Inc. (the
"Registration Rights Agreement"). Under the Registration Rights
Agreement, a copy of which is attached as Exhibit 4 and is
incorporated herein by reference, Proxima had certain
registration rights with respect to such shares. Pursuant to an
Assignment and Assumption Agreement dated as of September 21,
1999, a copy of which is attached hereto as Exhibit 5 and is
incorporated herein by reference, Proxima assigned its rights
with respect to such shares under the Registration Rights
Agreement to the Reporting Person in accordance with the terms of
the Registration Rights Agreement.
Item 7. Material To Be Filed As Exhibits
1. Amended and Restated Letter Agreement, dated March 26,
1999, by and between PNC Bank, National Association and
II-VI Incorporated for Committed Line of Credit and
Japanese Yen Term Loan.*
2. Letter dated September 22, 1999 from Francis J. Kramer,
President and Chief Operating Officer of II-VI
Incorporated to Robert G. Klimasewski, Chairman of Laser
Power Corporation.*
3. Letter dated September 22, 1999 from Robert G.
Klimasewski, Chairman of Laser Power Corporation, to
Francis J. Kramer, President and Chief Operating Officer
of II-VI Incorporated.*
4. Registration Rights Agreement dated as of June 13, 1997
by and among Laser Power Corporation, Proxima
Corporation and Union Miniere Inc.*
5. Assignment and Assumption Agreement dated as of
September 21, 1999 by and between Proxima Corporation
and II-VI Incorporated.*
6. Letter dated June 5, 2000, from Carl J., Johnson,
Chairman and Chief Executive Officer of the Reporting
Person, to Dick Sharman, Chairman of Laser Power.**
7. Press Release of II-VI Incorporated dated June 12, 2000
entitled "II-VI Incorporated Extends Deadline for Offer
to Laser Power Corporation's Board; Offer of .052 Shares
of II-VI Stock Plus $2.32 Cash for each Share of Laser
Power Stock with Minimum Price of $4.05 per Share
to Expire at 11:59 p.m. EDT on Wednesday, June 14, 2000".***
8. Press Release of II-VI Incorporated dated June 15, 2000
entitled "II-VI Advised by Laser Power's Board that
II-VI's Offer is Superior to Union Miniere's Offer".****
9. Press Release of II-VI Incorporated dated June 20, 2000
entitled "II-VI Incorporated Makes Revised Offer to Acquire
Laser Power Corporation; Increases Cash Component of Offer to
$2.89 pr Share; Raises Floor Price to $5.15 per Share and
Ceiling to $5.65 per Share; Transaction Valued at $5.36 per
Share."
10. Letter Agreement, dated June 6, 2000 and accepted June 20, 2000,
by and between PNC Bank, National Association and II-VI
Incorporated for $25 Million Credit Facility.
Page 6 of 8
--------------
* Previously filed as an Exhibit to the Schedule 13D
filed by the Reporting Person on September 29, 1999 and
incorporated herein by reference.
** Previously filed as an Exhibit to the Schedule 13D filed
by the Reporting Person on June 5, 2000 and incorporated
herein by reference.
*** Previously filed as an Exhibit to the Schedule 13D filed
by the Reporting Person on June 12, 2000 and incorporated
herein by reference.
**** Previously filed as an Exhibit to the Schedule 13D filed
by the Reporting Person on June 15, 2000 and incorporated
herein by reference.
Page 7 of 8
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: June 20, 2000 /s/ James Martinelli
James Martinelli
Chief Financial Officer
Page 8 of 8
ANNEX A
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF
II-VI INCORPORATED
The following table sets forth the name, business address and
principal occupation or employment at the present time for each
director and executive officer of II-VI Incorporated. Unless
otherwise noted, each person is a citizen of the United States.
In addition, unless otherwise noted, each person's business
address is II-VI Incorporated, 375 Saxonburg Boulevard,
Saxonburg, Pennsylvania 16056.
DIRECTORS OF II-VI INCORPORATED
Carl J. Johnson Chairman and Chief Executive Officer
of II-VI Incorporated.
Francis J. Kramer President and Chief Operating Officer
of II-VI Incorporated.
Thomas E. Mistler President & Chief Executive Officer of
Engineered Arresting System - ESCO
His business address is: Engineered
Arresting System - ESCO, 2550 Market
Street, Aston, PA 19014.
Richard W. Bohlen Retired; formerly Senior Vice President,
Operations, Rockwell International
Corporation. His business address is:
3 East Arrowhead Circle, Santa Fe,
New Mexico 87501.
Duncan A.J. Morrison President of ARRI Canada Ltd.
Mr. Morrison is a Canadian citizen.
His business address is: ARRI Canada
Ltd., 26 Irwin Avenue, Toronto, Ontario,
M4Y 1L2 Canada.
Peter W. Sognefest President and Chief Executive Officer
of Xymox Technology, Inc. His business
address is: Xymox Technologies, Inc.,
9099 West Dean Road, Milwaukee,
Wisconsin 53224.
EXECUTIVE OFFICERS OF II-VI INCORPORATED
(WHO ARE NOT ALSO DIRECTORS)
Herman E. Reedy Vice President and General Manager of
Quality and Engineering
James Martinelli Treasurer and Chief Financial Officer
Exhibit 9
June 20, 2000
Jim Martinelli
Treasurer & Chief Financial Officer
(724) 352-4455
[email protected]
II-VI Homepage: www.ii-vi.com
II-VI Incorporated Makes Revised Offer to Acquire Laser Power Corporation;
Increases Cash Component of Offer to $2.89 per Share;
Raises Floor Price to $5.15 per Share and Ceiling to $5.65 per Share;
Transaction Valued at $5.36 per Share
Pittsburgh - June 20, 2000 - II-VI Incorporated (Nasdaq: IIVI) announced
today that it has revised its offer to acquire Laser Power Corporation
(Nasdaq: LPWR), increasing the cash component of its offer to $2.89 per
share and raising the guaranteed "floor" price to $5.15 per share. Under
II-VI's revised proposal, each share of Laser Power stock will receive
.052 shares of II-VI common stock and $2.89 in cash. Based on the closing
market price of II-VI common stock on June 19, 2000, the value of this
offer to Laser Power's stockholders is $5.36 per share and represents a
significant premium over the $4.40 per share offer made by Union Miniere.
The guaranteed price will be paid with a combination of cash and/or
II-VI stock, at its election, if the volume weighted average trading
price of II-VI common stock is less than $43.46 per share for the 12
trading days prior to the closing of the exchange offer. II-VI has also
provided a $5.65 ceiling on its offer.
Fran Kramer, President and Chief Operating Officer of II-VI, said "We
were surprised that Laser Power's Board so quickly concluded that Union
Miniere's offer of $4.40 per share was superior to our prior offer,
which had a value of $4.61 per share based on the closing market price
of II-VI common stock as of last Friday. There can be no question that
our revised offer is superior to Union Miniere's current proposal. Not
only does our offer represent substantially greater value on its face
than Union Miniere's proposal, it has a guaranteed floor which is
greater than the value of Union Miniere's offer. Our proposed transaction
is in the best interests of both Laser Power's and II-VI's stockholders.
With our revised offer, we continue to believe that the transaction
will be accretive in our fiscal year beginning July 1, 2000."
The offer contemplates that the transaction will be structured
as an exchange offer for Laser Power shares. Following the exchange
offer, II-VI and Laser Power would consummate a merger in which each
share of Laser Power common stock not tendered into the exchange offer
would be exchanged for the same consideration paid in the exchange offer.
The full text of the offer letter to Laser Power is as follows:
II-VI Incorporated
375 Saxonburg Boulevard
Saxonburg, PA 16056
June 20, 2000
Dick Sharman, Chairman
Laser Power Corporation
36570 Briggs Road
Murrieta, CA 92563-2347
Dear Dick:
II-VI Incorporated continues to be interested in acquiring Laser Power
Corporation. To that end, and in response to the revised agreement
with Union Miniere announced on June 19, 2000, we hereby make the
following offer:
* Exchange Consideration per .052 shares of II-VI common
Share of Laser Power Stock stock plus $2.89 in cash.
(assuming 9,678,001 shares
outstanding, plus existing
stock options for no more than
367,977 shares)
* Minimum Price $5.15 per share--if necessary,
II-VI will pay a combination
of cash and/or stock, at its
election, so that the
consideration paid for each share
of Laser Power stock has a value
of at least $5.15 per share,
based on the volume weighted
average trading price of II-VI
stock during the 12 trading days
prior to the closing of the
exchange offer.
* Maximum Price $5.65 per share---if necessary,
the number of II-VI shares to be
issued will be reduced so that
the consideration paid for each
share of Laser Power stock will
not have a value of more than
$5.65 per share, based on the
volume weighted average trading
price of II-VI stock during the
12 trading days prior to the
closing of the exchange offer.
* Structure The transaction will be structured
as an exchange offer, followed by
a merger in which those Laser Power
stockholders not tendering into the
exchange offer receive the same
consideration that was paid in the
exchange offer.
* Other Terms A copy of a proposed merger
agreement that we are prepared to
execute is attached.
Based on the closing market price of II-VI stock on June 19, 2000, our
offer has an implied value of $5.36 per share of Laser Power stock.
This reflects a premium of $0.96 per share over the Union Miniere offer
and makes our offer clearly superior to the terms of the Union Miniere
transaction. Not only does our offer have a higher indicated value
than the Union Miniere transaction, it gives Laser Power stockholders
the opportunity to participate in the upside opportunity created by the
combination of II-VI and Laser Power. This makes our offer compelling
from the point of view of Laser Power's stockholders.
As you well know, II-VI has been enthusiastic about acquiring Laser Power
for several years now. II-VI is a growing company and we think that Laser
Power can be an important component of our future. Our intentions with
respect to Laser Power remain the same under our revised proposal. Our
plans are to combine our businesses in a way that maintains the Laser
Power brand name and its role in the market place. We intend to maintain
and even grow Laser Power's Temecula, Mexican and Belgium manufacturing
facilities. These facilities fit well into our worldwide manufacturing
strategy. We intend to make your San Diego office our West Coast sales
and marketing headquarters and your office in Belgium will nicely
complement our global sales and marketing efforts. For these reasons, it
is important to us to retain all of Laser Power's key employees and we
intend to offer them an extremely competitive compensation package,
including II-VI stock options, to accomplish that.
Your Board's fiduciary duties under Delaware law require you to consider
this offer. We believe that if you evaluate this offer in accordance
with those duties you will conclude that it is superior to the terms of
your agreement with Union Miniere.
Our proposed transaction is conditioned upon, among other things, (i)
the tender into our exchange offer of not less than a majority of the
shares of Laser Power Corporation common stock outstanding (including
the shares of Laser Power stock owned by II-VI), (ii) the valid
termination of the merger agreement between Laser Power and Union
Miniere, with the payment by Laser Power to Union Miniere of any fees
or expenses in connection with such termination, (iii) the approval of
II-VI's exchange offer and its proposed merger by Laser Power's Board
of Directors, (iv) receipt of all required regulatory approvals, (v)
the redemption of the outstanding preferred stock purchase rights under
Laser Power's preferred stock purchase rights plan or the amendment of
the plan to make it inapplicable to II-VI's offer, and (vi) Laser Power
not taking any action that would impair II-VI's ability to acquire Laser
Power or otherwise diminish the value of Laser Power to II-VI.
Please note that our offer does not contain a financing condition. Our
funds will be obtained through a new $25 million credit facility with
our bank, PNC Bank, along with cash on hand and the current availability
of over $10 million under our existing credit facility.
This offer has been approved by II-VI's Board of Directors. As you can
appreciate, time is of the essence. Accordingly, if you do not respond
favorably to our proposal by 11:59 p.m., Eastern Time, on June 21, 2000,
it will automatically terminate and we will be forced to consider our
other alternatives. If, prior to its expiration, you determine this
offer to be superior to Union Miniere's offer, this offer will
automatically be extended for two business days.
Considering the extremely short time it took Laser Power to evaluate
Union Miniere's revised offer, I look forward to hearing from you
shortly and to working with you so that we may bring our clearly
premium proposal to a vote of your stockholders.
Sincerely,
/s/ Carl J. Johnson
Carl J. Johnson,
Chairman and CEO
****
If our offer is accepted by the Board of Directors of Laser Power,
we will prepare and file a registration statement with the Securities
and Exchange Commission. Laser Power stockholders would then be able
to obtain such materials for free at the Commission's Web site at
www.sec.gov. Laser Power stockholders are urged to carefully read
the complete terms and conditions of those materials prior to
making any decisions with respect to an actual offer.
This document contains forward-looking statements concerning the
financial condition, results of operations and business of II-VI
and its proposed acquisition of Laser Power, the anticipated
financial and other benefits of such proposed acquisition and the
plans and objectives of II-VI's management following such proposed
acquisition, including, without limitation, statements relating to:
(A) the likelihood of consummating the proposed acquisition, (B)
the cost savings expected to result from the proposed acquisition,
(C) anticipated results of operations of the combined company
following the proposed acquisition, (D) projected earnings per
share of the combined company following the proposed acquisition,
and (E) the restructuring charges estimated to be incurred in
connection with the proposed acquisition. Generally, the words
"will," "may," "should," "continue," "believes," "expects,"
"anticipates" or similar expressions identify forward-looking
statements. These forward-looking statements involve certain
risks and uncertainties. Factors that could cause actual results
to differ materially from those contemplated by the forward-
looking statements include, among others, the following factors:
(1) the proposed acquisition may not be consummated on the terms
being offered or at all, (2) cost savings expected to results from
the proposed acquisition may not be fully realized or realized
within the expected time frame; (3) operating results following
the proposed acquisition may be lower than expected; (4) competitive
pressures may increase significantly; (5) costs or difficulties
related to the integration of the businesses of II-VI and Laser
Power may be greater than expected; (6) general economic conditions,
whether nationally or in the markets in which II-VI and Laser
Power conduct business, may be less favorable than expected; (7)
legislation or regulatory changes may adversely affect the
businesses in which II-VI and Laser Power are engaged; or (8)
adverse changes may occur in the securities markets.
CONTACT: Jim Martinelli, Treasurer & Chief Financial Officer of
II-VI Incorporated, 724-352-4455,
Exhibit 10
June 6, 2000
Private and Confidential
II-VI Incorporated
375 Saxonburg Boulevard
Saxonburg, PA 16056
Attention: James Martinelli
Dear Jim:
You have advised us that II-VI, Incorporated (the "Company") proposes
to acquire Laser Power Corporation (the "Acquisition"). PNC Bank,
National Association (the "Bank") is pleased to confirm that the Bank
is prepared to provide up to $25 million in financing (the "Credit
Facility") to the Company for the Acquisition, subject to the terms
and conditions stated below.
The Credit Facility will be provided on a secured basis with such
terms and conditions as may be agreed by the Bank and the Company
after further discussions with the Company and due diligence with
respect to the target company, including management. The Bank's
obligations hereunder are subject to satisfactory completion of such
due diligence as the Bank believes appropriate. The Bank does not
warrant, promise or otherwise provide any assurances that the Credit
Facility will be closed.
The Bank's obligations are also subject to (a) preparation,
execution and delivery of definitive loan documentation acceptable
to the Company and the Bank, (b) no material adverse change in either
(i) the business, condition (financial or otherwise), operations,
performance or prospects of the Company or the target company or
(ii) loan syndication or financial or capital markets generally from
those currently in effect, and (c) our entering into a mutually
acceptable agreement regarding the payment of fees and reimbursement
of expenses to the Bank for providing the proposed financing.
This letter is for the Company's confidential use only and may not
be disclosed by the Company without the Bank's prior written consent
to any person (including any financial institution) other than your
accountants, attorneys and other advisors, and then only in connection
with the transactions contemplated hereby and on a confidential basis.
In addition, we understand and agree that the Company may provide a
copy of this letter to Laser Power Corporation in connection with
submission of its offer. This letter is solely for the benefit of the
Company and neither Laser Power Corporation nor any other person shall
obtain any rights hereunder or be entitled to rely or claim reliance
upon the terms and conditions hereof.
The Company hereby agrees to indemnify the Bank (and its directors,
officers, employees, agents and controlling persons) against any and
all claims, losses, damages, liabilities, costs and expenses (or
actions in respect thereof) (including without limitation fees and
expenses of counsel and expert witnesses) which may be incurred by any
of them in connection with any investigation, litigation or other
proceeding relating to, arising out of or in connection with or by
reason of the Acquisition, the proposed financing or this letter,
other than for their own gross negligence or willful misconduct.
The Company's obligations hereunder shall survive termination of
this letter. The Bank will in no event be responsible or liable for
any consequential damages that may be incurred or alleged by any
person as a result of this letter.
No modification or waiver of any of the terms and conditions of
this letter will be valid and binding unless agreed to in writing
by the Bank. When accepted, this letter constitutes the entire
agreement between the Bank and the Company concerning the Credit
Facility and replaces all prior understandings, statements and
negotiations.
The Bank's commitment hereunder will expire on June 30, 2000, unless
on or before that date the Company signs and returns the enclosed
copy of this letter along with the Fee Letter. Once accepted, the
Bank's commitment under this letter will expire on August 15, 2000,
if the Credit Facility has not been closed on or before that date.
The expiration date may only be extended in writing by the Bank.
Please indicate your agreement and acceptance of the terms of this
letter by signing the enclosed copy of this letter and returning
it to us. We are very much looking forward to working with you.
Sincerely,
PNC BANK, NATIONAL ASSOCIATION
/s/ Enrico A. Della Corna
Enrico A. Della Corna
Vice President and Senior Relationship Manager
Agreed to and accepted:
II-VI Incorporated
/s/ James Martinelli
By: James Martinelli
Title: Treasurer & Chief Financial Officer
