LOAN AGREEMENT
This Agreement is dated this 3rd day of June, 1997, by and between FLEET
NATIONAL BANK, a national banking association with an office at 000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx, 00000 (the "LENDER") and ZYGO CORPORATION, X.X. Xxx 000,
Xxxxxxxxxxx, Xxxxxxxxxxx 00000-0000 ("Borrower").
SECTION 1. Definitions. For purposes of this Agreement, the following terms
shall have the meanings specified below:
a. "Affiliate" means (i) any person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Borrower or any other obligor of the
Obligations, as the case may be (including, without limitation,
any respective director or officer of the Borrower or any other
obligor of the Obligations, as the case may be), and (ii) any
corporation or other organization of which the Borrower owns
more than fifty percent (50%) of the voting securities of such
entity.
b. "Capital Assets" means assets that in accordance with GAAP are
required or permitted to be depreciated or amortized on the
Borrower's balance sheet.
c. "Capital Leases" means capital leases, conditional sales contracts
and other title retention agreements relating to the purchase or
acquisition of Capital Assets.
d. "Code" means the Internal Revenue Code of 1986, as amended, or any
successor federal tax code, and any reference to any provision shall
be deemed to include a reference to any successor provision or
provisions.
e. "Current Assets" means current assets as determined in accordance
with GAAP.
f. "Current Liabilities" means current liabilities as determined in
accordance with GAAP.
g. "Current Ratio" means Current Assets divided by Current
Liabilities.
h. "Date of Closing" means the date on which this Agreement and the
Note are executed by Borrower.
i. "Debt" means the Total Liabilities of the Borrower.
j. "Environmental Laws" means any and all applicable federal, state and
local environmental, health or safety statutes, laws, regulations,
rules, ordinances, guidances, policies and rules or common law
(whether now existing or hereafter
-1-
enacted or promulgated), of all governmental agencies, bureaus or
departments which may now or hereafter have jurisdiction over
Borrower or Borrower's property and all applicable judicial and
administrative and regulatory decrees, judgments and orders,
including common law rulings and determinations, relating to injury
to, or the protection of, real or personal property or human health
or the environment, including, without limitation, all requirements
pertaining to reporting, licensing, permitting, investigation,
remediation and removal of emissions, discharges, releases or
threatened releases of Hazardous Materials, chemical substances,
pollutants or contaminants whether solid, liquid or gaseous in
nature, into the environment or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of such Hazardous Materials, chemical
substances, pollutants or contaminants.
k. "ERISA" means the Employee Retirement Income Security Act of 1974
and all rules and regulations promulgated pursuant thereto, as the
same may from time to time be supplemented or amended.
l. "Event of Default" shall have the meaning assigned in Section 6
hereof.
m. "GAAP" means generally accepted accounting principles in the United
States of America, as from time to time in effect.
n. "Hazardous Material" means any substance: (i) the presence of
which requires or may hereafter require notification,
investigation, monitoring or remediation under any Environmental
Law; (ii) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "toxic
substance" or "pollutant" or "contaminant" under any present or
future Environmental Law or amendments thereto including,
without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.)
and any applicable local statutes and the regulations
promulgated thereunder; (iii) which is toxic, explosive,
corrosive, reactive, ignitable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is or becomes
regulated by any governmental authority, agency, department,
commission, board, agency or instrumentality of any foreign
country, the United States, any state of the United States, or
any political subdivision thereof to the extent any of the
foregoing has or had jurisdiction over Borrower or of Borrower's
property; or (iv) without limitation, which contains gasoline,
diesel fuel or other petroleum products, asbestos or
polychlorinated biphenyls.
o. "Indebtedness" of an entity means such entity's (i) obligations
for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in
the ordinary course of such entity's business on terms customary
in the trade, (iii) obligations, whether or not assumed, secured
by a lien on, or payable out of the proceeds or production from,
property now or hereafter
-2-
owned or acquired by such entity, (iv) obligations which are
evidenced by bonds, debentures, notes, acceptances, or other
instruments and (v) Capital Lease obligations.
p. "IRS" means the United States Internal Revenue Service.
q. "Loan" means the Loan evidenced by the Note.
r. "Loan Documents" shall have the meaning assigned in Section 3.3
hereof
s. "Net Worth" means Total Assets less Total Liabilities.
t. "Note" means promissory note of Borrower dated the same date as
this Agreement in the original principal amount of $3,000,000.
u. "Obligations" means and includes all loans, advances, interest,
indebtedness, liabilities, obligations, guaranties, covenants and
duties at any time owing by the Borrower to Lender of every kind and
description, whether or not evidenced by any note or other
instrument, whether or not for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, including, but not limited to, the
Loan and all other indebtedness, liabilities and obligations arising
under this Agreement and the other Loan Documents and all costs,
expenses, fees, charges and attorneys', paralegals' and professional
fees incurred in connection with any of the foregoing, or in any way
connected with, involving or relating to the preservation,
enforcement, protection or defense of, or realization under this
Agreement, the Note, any of the other Loan Documents, any related
agreement, document or instrument and the rights and remedies
hereunder or thereunder, and in connection with any "workout" or
default resolution negotiations involving legal counsel or other
professionals and any re-negotiation or restructuring of any of the
Obligations.
v. "PBGC" shall have the meaning assigned in Section 5.21a.
w. "Plan" means any employee benefit plan or other plan maintained for
employees of Borrower or any related entity covered by Title I of
ERISA.
x. "Property" shall have the meaning assigned in Section 5.5 hereof.
y. "Total Assets" means total assets determined in accordance with
GAAP.
z. "Total Liabilities" means all liabilities determined in accordance
with GAAP.
-3-
SECTION 2. The Loan Transaction.
2.1. The Loan. Lender shall lend to the Borrower the sum of
$3,000,000. The Borrower's obligations to repay the Loan are as
contained in this Agreement and the Note, a copy of which is
attached to this Agreement as SCHEDULE 2.1. The Borrower shall
pay an annual line of credit fee in the amount of $7,500 which
shall be payable in quarterly installments of $1,875 on the
first day of January, April, July and October of each year. The
Loan shall be payable upon DEMAND. There shall be no principal
amount outstanding on the Loan for a period of 30 consecutive days
in each fiscal year of Borrower. The Loan shall terminate on
November 26, 1997.
2.2. Advances. Lender shall make advances to Borrower under the Loan in
an aggregate amount not to exceed $3,000,000 provided no defaults
or Events of Default exist at the time of the advance.
2.3. Payments on the Loan.
a. Regularly Scheduled Payments. Regularly scheduled payments
on the Loan shall be made in accordance with the Note.
b. Additional Payments. If Lender shall deem applicable to
this Agreement, the Loan or the Note (including the
borrowed and the unused portion thereof) any requirement
of any law of the United States of America, any
regulation, order, interpretation, ruling or official
directive or guideline (whether or not having the force of
law) of the Board of Governors of the Federal Reserve
System, the Comptroller of the Currency, the Federal
Deposit Insurance Corporation or any other board or
governmental or administrative agency of the United States
of America which shall impose, increase, modify or make
applicable thereto or cause to be included in, any
reserve, special deposit, capital adequacy, calculation
used in the computation of regulatory capital standards,
assessment or other requirement which imposes on Lender or
any entity that controls Lender any cost that is
attributable to the maintenance thereof, then, and in each
such event, Borrower shall promptly pay Lender, upon its
demand, such amount as will compensate Lender for any such
cost, which determination may be based upon Lender's
reasonable allocation of the aggregate of such costs
resulting from such events. In the event any such cost is
a continuing cost, a fee payable to Lender may be imposed
upon Borrower periodically for so long as any such cost is
deemed applicable by Lender, in an amount determined by
Lender to be necessary to compensate Lender for any such
cost. The determination by Lender of the existence and
amount of any such cost shall, in the absence of manifest
error, be conclusive.
-4-
SECTION 3. Representations, Warranties and General Covenants. In order to
induce Lender to enter into this Agreement, Borrower represents, warrants
and covenants the following:
3.1. Organization and Qualification. It is and will continue to be a
corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation and is and will
continue to be duly qualified and licensed to do business in each
other state in which it is required to be so qualified and/or
licensed.
3.2. Corporate Records. The Certificate of Incorporation and all
amendments thereto of the Borrower have been duly filed and are in
proper order. All books and records of Borrower, including but not
limited to its bylaws, minute books and books of account, are
accurate and up to date and will be so maintained.
3.3. Power and Authority. Borrower has the power to execute, deliver
and carry out the terms of this Agreement, the Note, and all other
documents evidencing, securing and guarantying the Loan (the "Loan
Documents") and to incur the Obligations and each has taken all
necessary action to authorize the execution, delivery and
performance of the Loan Documents.
3.4. No Legal Bar. The execution and delivery of the Loan Documents
and compliance by Borrower with the terms and provisions
thereof will not violate any provision of any existing law or
regulation or any writ or decree of any court or governmental
instrumentality, or any agreement or instrument to which it is
a party or which is binding upon it or its assets, and will not
result in the creation or imposition of any lien, security
interest, charge or encumbrance of any nature whatsoever upon
or in any of its assets, except as contemplated by the Loan
Documents; and no consent of any other party, and no consent,
license, approval or authorization of or registration or
declaration with any governmental bureau or agency, is required
in connection with the execution, delivery, performance,
validity and enforceability of any of the Loan Documents.
3.5. Title. Borrower has good and marketable title to all of its
property and assets (the "Property").
3.6. No Material Litigation. There is no material litigation or
administrative proceeding of or before any governmental body which
is presently pending-or, to the knowledge of Borrower, threatened
against it or any of its Property.
3.7. No Default. Borrower is not in default with respect to the payment
or performance of any of its Obligations or in the performance of
any covenants or conditions to be performed by it pursuant to the
terms and provisions of any indenture, agreement or instrument to
which it is a party or by which it is bound, and Borrower has not
received a notice of default thereunder.
-5-
3.8. Compliance with Laws. Borrower has complied with and will continue
to comply with all applicable statutes and regulations of the
United States of America, and all states, counties, municipalities
and agencies of any governmental authority thereof.
3.9. Taxes. Borrower has filed or caused to be filed or obtained
extensions for the filing of, and will continue to file and
cause to be filed, all federal, state and local tax returns
required by law to be filed, and has paid and will continue to
pay all taxes shown to be due and payable on such returns or on
any assessment made against it, except if being contested in
good faith and adequate provision has been made therefor on
Borrower's books of account. No claims are being asserted with
respect to such taxes which are not reflected in the financial
statements which have been furnished by Borrower to Lender.
3.10. Financial Condition. Borrower has submitted to Lender various
financial statements and information as of September 30, 1996.
Borrower represents that all of such financial information is
true and correct; that such financial information fairly
presents the financial condition and results of operations of
Borrower as of the dates thereof and for the periods indicated
therein; that such financial statements have been prepared in
accordance with GAAP and practices consistently maintained
throughout the periods involved; and that, as of the date of
such financial information, there were no material unrealized
or anticipated losses from any unfavorable commitments of
Borrower and that there has been no material adverse change in
the business or Property or in the condition, financial or
otherwise, of Borrower from that set forth in such financial
statements. Since the date of such financial statements there
has not occurred any material adverse change in the condition,
financial or otherwise, business, operations, properties or
prospects of Borrower.
3.11. Accuracy of Representations. No representation, warranty or
statement by Borrower contained in any Loan Document or
certificate or other document furnished or to be furnished by
Borrower pursuant to this Agreement or in connection with the
transactions contemplated under this Agreement, contains, or at
the time of delivery will contain, any untrue statement of
material fact or omits or will omit to state a material fact
necessary to make it not misleading.
3.12. Trade Names. Borrower operates its business under its name as
set forth in this Agreement and has no other trade names.
3.13. Collective Bargaining Agreements. Borrower is not a party to
any collective bargaining agreements.
3.14. Saleable Value of Assets. The fair saleable value of the assets
of Borrower, after giving effect to the transactions
contemplated by the Loan Documents, will not be
-6-
in excess of its debts (including contingent, subordinated,
unmatured and unliquidated liabilities).
3.15. Sufficient Cash Flow. Borrower has, and after giving effect to
the transactions contemplated by the Loan Documents will have,
sufficient cash flow to continue to operate its business in the
ordinary course as heretofore conducted, make the payments
called for by the Loan Documents and pay all other debts,
including but not limited to payments under the Note, supplier
payments, pension and other employee benefit plan liabilities,
business expenses and taxes, as the same shall become due.
3.16. No Hindrance. Borrower has no intent to hinder, delay or
defraud any entity to which it is or will become indebted.
3.17. Ability to Pay Debts. Borrower, after giving effect to the
transactions contemplated by the Loan Documents, does not intend
to incur nor does it believe that it will incur debts beyond its
ability to pay as they become due.
3.18. Ownership of Property. Borrower does not have in its possession
any personal property of which it is not the actual owner,
except as described on SCHEDULE 3.19.
3.19. Subsidiaries and Affiliates. Borrower has no subsidiaries or
affiliates except as described on SCHEDULE 3.20 attached hereto.
3.20. Pension Plans.
a. No event, including but not limited to any "reportable
event", as that term is defined in Section 4043 of ERISA
exists in connection with any of its Plans and any
entities related to it under Section 414(b,), (c), (m),
(n) or (o) of the Code has occurred which might constitute
grounds for termination of any such Plan by the Pension
Benefit Guaranty Corporation (the "PBGC"), or for the
appointment by the appropriate United States District
Court of a trustee to administer any such Plan. A list of
all of its Plans are attached hereto on SCHEDULE 3.21a;
b. No "prohibited transaction" within the meaning of Section 406
of ERISA or Section 4975 of the Code exists or will exist upon
the execution and delivery of this Agreement and the other
Loan Documents, or the performance by the Borrower of its
duties and obligations hereunder and thereunder;
c. It has no unfunded liability in contravention of ERISA and the
Code;
-7-
d. Each of the Plans complies currently, and has complied in the
past, both as to form and operation, with its terms and with
the provisions of the Code and ERISA, and all applicable
regulations thereunder and all applicable rules issued by the
Internal Revenue Service, U.S. Department of Labor and the
PBGC and as such, is and remains a "qualified" plan under the
Code;
e. No actions, suits or claims are pending (other than routine
claims for benefits) against any Plan or the assets of any
Plan;
f. It has performed all obligations required to be performed by
it under any Plan set forth in SCHEDULE 3.21a and it is not in
default or in violation of any Plan, and has no knowledge of
any such default or violation by any other party to any such
Plans;
g. It has incurred no liability to the PBGC or to participants or
beneficiaries on account of any termination of a Plan subject
to Title IV of ERISA, no notice of intent to terminate a Plan
has been filed by (or on behalf of) it pursuant to Section
4041 of ERISA and no proceeding has been commenced by the PBGC
pursuant to Section 4042 of ERISA;
h. It is not subject to any reporting or disclosure provisions of
the Securities Act of 1933 or the Securities Exchange Act of
1934 with respect to any Plan
3.21. Environmental Matters. Except as described on SCHEDULE 3.22
attached hereto:
a. It has obtained all permits, licenses and other
authorizations which are required under all Environmental
Laws. It is in compliance with the terms and conditions of
all such permits, licenses and authorizations, and is, to
the best of its knowledge, also in compliance with all
other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and
timetables contained in any applicable Environmental Law
or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered,
promulgated or approved thereunder.
b. No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint
has been filed, no penalty has been assessed and no
investigation or review is pending or threatened by any
governmental or other entity with respect to any alleged
failure by it to have any permit, license or authorization
required in connection with the conduct of its business or
with respect to any Environmental Laws, including without
limitation, Environmental Laws relating to the
-8-
generation, treatment, storage, recycling, transportation,
disposal or release of any Hazardous Materials.
c. There are no liens or encumbrances arising under or pursuant
to any Environmental Laws on any of the property or
properties owned by it, and no governmental actions have been
taken or are in process which could subject any of such
properties to such liens or encumbrances or, as a result of
which it would be required to place any notice or restriction
relating to the presence of Hazardous Materials at any
property owned by it in any deed to such property.
SECTION 4. Affirmative Covenants. Borrower covenants and agrees that, so long
as any of the Obligations shall remain outstanding, it will perform and
observe each and all of the covenants and agreements herein set forth.
4.1. Payments Under this Agreement and the other Loan Documents. It will
make punctual payment of all monies and will faithfully and fully
keep and perform all of the terms, conditions, covenants and
agreements contained on its part to be paid, kept or performed
hereunder, and will be bound in all respects as debtor under this
Agreement and the other Loan Documents.
4.2. Information Access to Books, and Inspection. It will furnish to
Lender such information regarding its business affairs and financial
condition as Lender may reasonably request and give any
representative of Lender access during normal business hours to, and
permit him/her to examine and copy, and make extracts from, any and
all books, records and documents in its possession relating to its
affairs and to inspect any of the Property.
4.3. Payment of Liabilities. It will pay and discharge at or before their
maturity all taxes, assessments, rents, claims, debts and charges,
except where the same may be contested in good faith and will
maintain, in accordance with GAAP, appropriate reserves for the
accrual of any of the same.
4.4. Existence, Properties, Insurance. It will do or cause to be done
all things necessary to preserve and keep in full force and
effect its corporate or partnership existence, as the case may
be, its rights and franchises, and will comply with all laws
applicable thereto; and will at all times maintain, preserve and
protect all franchises, patents, and trade names and will
preserve all of the remainder of its Property used or useful in
the conduct of its business and will keep the same in good
condition and repair (normal wear and tear and obsolescence
excepted), and from time to time will reasonably make, or cause
to be made, all needful and proper repairs, renewals,
replacements, betterments and improvements thereto, and will pay
or cause to be paid, except when the same may be contested in
good faith, all rent due on premises where any Property is held
or may be held, so that the
-9-
business carried on in connection therewith may be continuously
conducted. Borrower will have and maintain insurance at all times
with respect to all Property against risks of fire (including
so-called extended coverage), theft and such risks as Lender may
reasonably require containing such terms, in such form, and for
such periods, and written by such companies as may reasonably be
satisfactory to Lender, such insurance to be payable to Lender and
Borrower as their interests may appear; each policy of insurance
shall have a loss payee endorsement providing:
a. That, if the policy is cancelled at any time by the insurance
carrier, in such case the policy shall continue in force for
the benefit of Lender for not less than thirty (30) days after
written notice of cancellation to Lender from the insurance
carrier; and
b. That the policy will not be reduced or cancelled at the
request of the insured nor will said loss payee endorsement be
amended or deleted without thirty (30) days' prior written
notice to Lender from the insurance carrier.
Borrower will furnish Lender with certificates or other evidence
satisfactory to Lender of compliance with the foregoing insurance
provisions. Borrower will also at all times maintain necessary
workers' compensation insurance and such other insurance as may be
required by law or as may be reasonably required in writing by
Lender.
4.5. Notices. It will promptly give notice in writing to Lender of:
(a) the occurrence of any event which constitutes or which with
notice or lapse of time, or both, would constitute an Event of
Default under this Agreement or any of the other Loan Documents;
(b) the occurrence of any material adverse change in its
business, properties or its condition or operations, financial or
otherwise, setting forth a description of such material adverse
change; and (c) any court or governmental orders, notices,
claims, investigations, litigation and proceedings received by it
in which the aggregate amount involved is $250,000 or more and
not covered by insurance, and of any material dispute which may
exist between it and any governmental regulatory body or any
other party.
4.6. Financial Statements; Notice of Default. The Borrower shall
deliver or cause to be delivered to Lender
a. as soon as available and in any event within forty-five (45)
days after the end of each of its first, second and third
fiscal quarters, a balance sheet of the Borrower as of the
close of each such fiscal quarter and statements of income and
retained earnings for that portion of the fiscal year-to-date
then ended, which shall be prepared in conformity with GAAP,
applied on a
-10-
basis consistent with that of the preceding period, and which
shall be certified by the president or Chief Financial
Officer of the Borrower as being accurate and fairly
presenting the financial condition of the Borrower.
b. as soon as available and in any event within ninety (90)
days after the close of each fiscal year of the Borrower,
audited financial statements including a balance sheet as
of the close of such fiscal year and statements of income
and retained earnings and source and application of funds
for the year then ended, all on a comparative basis with
corresponding statements for the preceding fiscal year and
prepared in conformity with generally accepted accounting
principles, applied on a basis consistent with that of the
preceding year, and accompanied by an unqualified opinion
of such accountants and a written statement from such
accountants stating that they have reviewed such financial
statements and the financial covenants set forth herein and
have found no evidence of an Event of Default having
occurred or of an event which with passage of time and/or
giving of notice would constitute an Event of Default
having occurred.
c. together with the statements referred to in sub-paragraphs (i)
and (ii) above, a written statement from the President or
Chief Financial Officer of the Borrower certifying that there
exists no Event of Default by Borrower in the performance of
any obligations to Lender under the Loan Documents.
d. from time to time, promptly upon Lender's written request,
such other information about the financial condition and
operations of Borrower as Lender may reasonably request.
e. promptly on becoming aware of any Event of Default, or any
event but for the giving of notice or the passage of time
would constitute an Event of Default, notice thereof, in
writing.
4.7. Pension Plans. It shall do all acts, including, but not limited to,
making all contributions necessary to maintain compliance with ERISA
and the Code, and agrees not to terminate any such Plan in a manner
or do or fail to do any act which could result in the imposition of
a lien on any of its properties pursuant to Section 4068 of ERISA;
4.8. Reports. Borrower shall deliver to Lender:
a. as soon as available and in any event within forty-five (45)
days after the end of each fiscal quarter of the Borrower, a
report, in form satisfactory to Lender, setting forth the
calculations of, and information as to compliance
-11-
with, the financial covenants of the Borrower contained in
SECTION 5.8 of this Agreement, certified by the President or
Chief Financial Officer of the Borrower to be complete and
correct;
b. as soon as available and in any event within a reasonable time
after the close of each fiscal year of Borrower, copies of the
portions of any and all auditors' letters, if any, to Borrower
regarding any material changes in the accounting practices and
control procedures used by Borrower;
SECTION 5. Negative Covenants. So long as any Obligations remain outstanding
and unpaid, Borrower covenants and agrees that it will not without the
express written consent of Lender:
5.1. Limitation on Liens. Incur or permit to exist any liens, mortgages,
security interests, pledges, charges or other encumbrances against
any of its property or assets, whether now owned or hereafter
acquired (including, without limitation, any lien or encumbrance
relating to any response, removal or clean-up of any toxic
substances or hazardous wastes) which in the aggregate exceed
$250,000, except: (a) liens, mortgages, security interests, charges
or other encumbrances in favor of Lender or specifically permitted
in writing by Lender; (b) pledges or deposits in connection with or
to secure workers' compensation or unemployment insurance; and (c)
tax liens which are being contested in good faith with the prior
written consent of Lender and against which, if requested by
Lender, Borrower shall maintain reserves in amounts and in form
(book, cash, bond or otherwise) satisfactory to Lender.
5.2. Covenant to Secure Equally and Ratably. Permit any other
indebtedness incurred before or after the date hereof to be secured
by any asset of Borrower without Lender's prior written consent,
except liens securing indebtedness to any seller incurred in
connection with the purchase of personal property for the business
of such Borrower which is secured only by the property so financed.
5.3. Financial Covenants. Unless Lender otherwise consents in writing:
a. Current Ratio. Borrower shall not permit its Current Ratio
to be less than 1.00 to 1.00 at any time.
b. Ratio of Total Liabilities to Net Worth. Borrower shall not
permit the ratio of its Total Liabilities to Net Worth to
exceed .75 to 1.0 at any time.
c. Net Worth. Borrower shall not permit its Net Worth to be less
than $25,000,000 at any time.
-12-
d. The financial covenants contained above shall be calculated in
accordance with generally accepted accounting standards.
SECTION 6. Default.
6.1. The occurrence of any of the following events will constitute an
Event of Default under this Agreement:
a. The failure to pay any installment of principal and/or
interest due under the Loan or any fee when due and payable.
b. The failure to pay taxes, if any, due on any indebtedness
under the Loan or any tax or assessment upon any collateral
securing the Obligations, on or before the same shall become
due and payable.
c. The failure by Borrower to observe or perform any other
covenant contained in this Agreement or in any of the other
Loan Documents.
d. The occurrence of an Event of Default under any of the other
Loan Documents.
e. The filing by or against Borrower of any petition,
arrangement, reorganization, or the like under any
insolvency or bankruptcy law, or the adjudication of
Borrower as a bankrupt (and if such filing is involuntary,
the failure to have same dismissed within sixty (60) days
from the date of filing), or the making of an assignment
for the benefit of creditors, or the appointment of a
receiver for any part of Borrower's properties or the
admission in writing by Borrower of its inability to pay
its debts as they become due.
f. The breach in any material respect of any warranty or the
untruth or inaccuracy in any material respect of any
representation of Borrower contained in the Loan Documents or
made or deemed made in connection with the making of the Loan
hereunder.
g. The occurrence of a default beyond any applicable grace period
under or demand for the payment of any other note or
obligation of Borrower.
h. The failure by Borrower to make payment on any obligation for
borrowed money or for the deferred purchase price of property
or services due to any party other than Lender, beyond any
grace period provided with respect thereto, or upon demand, or
the failure to perform any other term, condition, or covenant
contained in any agreement under which any such
-13-
obligation is created, the effect of which default is to
cause such obligation to become due and payable prior to its
date of maturity.
i. The dissolution or termination of existence of Borrower.
j. The passage or enforcement of any federal, state, or local
law or the rendition of a final decision of any court (other
than a law or decision with respect to a tax upon the
general revenues of Lender) in any way directly changing or
affecting the Loan or lessening the net income thereon in a
fashion which is not corrected or reimbursed by Borrower.
k. The passage or enforcement of any federal, state, or local
law or the rendition of a final decision of any court in any
way impairing Lender's ability to charge and collect the
interest stated in the Note, including without limitation,
the ability to vary the interest payable under the Note in
accordance with its terms.
l. A judgment or judgments for the payment of money aggregating
more than $250,000 or more shall be rendered against
Borrower and any such judgment shall remain unsatisfied and
in effect for a period of thirty (30) consecutive days
without a stay of execution.
m. The occurrence of a material adverse change in any business,
properties or the condition or operations, financial or
otherwise, of Borrower.
6.2. Acceleration. Upon the happening of any Event of Default
specified above, at Lender's option, the entire unpaid balance
owed under the Loan, the Note and the Loan Documents and under
any other note or other documents evidencing the same, plus any
other sums owed hereunder, shall, at Lender's option, become
and shall thereafter be immediately due and payable without
presentment, demand, protest, notice of protest, or other
notice of dishonor of any kind, all of which are hereby
expressly waived by Borrower. Failure to exercise such option
shall not constitute a waiver of the right to exercise the same
in the event of any subsequent default. Upon the occurrence of
any Event of Default, without in any way affecting Lender's
other rights and remedies, or after maturity or judgment, the
interest rate applicable to the Loan shall automatically change
without notice to a floating rate per annum equal to two
percentage points (2%) above the otherwise then applicable rate.
6.3. Rights of Lender. In the event of the occurrence of an Event of
Default (a) Lender will have the right to enforce all of its
rights under the Loan Documents and (b) Lender shall have, in
addition to all other rights provided herein, the rights and
remedies provided by law and (c) Lender shall make no further
advances under the Note. Failure by Lender to exercise any right,
remedy or option under this
-14-
Agreement or any of the other Loan Documents or in any other
agreement between Borrower and Lender, or delay by Lender in
exercising the same will not operate as a waiver by Lender.
Neither Lender nor any party acting as Lender's attorney pursuant
to this Agreement shall be liable for any error of judgment or
mistake of fact or law. Lender's rights and remedies under this
Agreement will be cumulative and not exclusive of any other right
or remedy which Lender may have.
SECTION 7. Miscellaneous.
7.1. Indemnification. In consideration of Lender's execution and
delivery of this Agreement and Lender's making of the Loan
hereunder and in addition to all other obligations of Borrower
under this Agreement, Borrower hereby agree to defend, protect,
indemnify and hold harmless Lender, its successors, assigns,
officers, directors, employees and agents (including, without
limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Indemnitee")
from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages
and expenses in connection therewith (irrespective of whether
any such Indemnitee is a party to any action for which
indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "Indemnifiable
Liabilities") incurred by the Indemnitee or any of them as a
result of; or arising out of, or relating to (i) the execution,
delivery, performance or enforcement of this Agreement and the
other Loan Documents and any instrument, document or agreement
executed pursuant hereto to any of the Indemnitee; (ii) Lender's
status as lender to, or creditor of, Borrower; (iii) the
operation of Borrower's business from and after the date
hereof; or (iv) the enforcement of Lender's rights under the
Loan Documents and/or the collection of the Obligations,
provided that Borrower shall not be required to indemnify
Indemnitee for any Indemnifiable Liabilities resulting from the
gross negligence or willful misconduct of Lender or any of the
other Indemnities in the collection of the Loan and in the
liquidation of the collateral thereafter. To the extent that
the foregoing undertaking by Borrower may be unenforceable for
any reason, Borrower shall make the maximum contribution to the
payment and satisfaction of each of the Indemnifiable
Liabilities which is permissible under applicable law.
7.2. Setoff. In addition to and not in limitation of the above,
with respect to any deposits or Property of Borrower in
Lender's possession or control, now or in the future,
Lender shall have the right, following the occurrence of an
Event of Default, to setoff all or any portion thereof; at
any time, against any Obligations hereunder, even though
unmatured, without prior notice or demand to Borrower.
-15-
7.3. WAIVER OF RIGHT TO PREJUDGMENT REMEDY NOTICE AND HEARING. BORROWER
ACKNOWLEDGES THAT LENDER MAY HAVE RIGHTS AGAINST IT, NOW OR IN
THE FUTURE, IN ITS CAPACITY AS CREDITOR OR IN ANY OTHER CAPACITY.
SUCH RIGHTS MAY INCLUDE THE RIGHT TO DEPRIVE BORROWER OF OR AFFECT
THE USE OF OR POSSESSION OR ENJOYMENT OF BORROWER'S PROPERTY; AND
IN THE EVENT LENDER DEEMS IT NECESSARY TO EXERCISE ANY OF SUCH
RIGHTS PRIOR TO THE RENDITION OF A FINAL JUDGMENT AGAINST
BORROWER, OR OTHERWISE, BORROWER MAY BE ENTITLED TO NOTICE AND/OR
HEARING UNDER THE CONSTITUTION OF THE UNITED STATES AND/OR STATE
OF CONNECTICUT, CONNECTICUT STATUTES (TO DETERMINE WHETHER OR NOT
LENDER HAS PROBABLE CAUSE TO SUSTAIN THE VALIDITY OF LENDER'S
CLAIM), OR THE RIGHT TO NOTICE AND/OR HEARING UNDER OTHER
APPLICABLE STATE OR FEDERAL LAWS PERTAINING TO PREJUDGMENT
REMEDIES, PRIOR TO THE EXERCISE BY LENDER OF ANY SUCH RIGHTS. TO
THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER EXPRESSLY WAIVES ANY
SUCH RIGHT TO PREJUDGMENT REMEDY NOTICE OR HEARING TO WHICH
BORROWER MAY BE ENTITLED. THIS SHALL BE A CONTINUING WAIVER AND
REMAIN IN FULL FORCE AND EFFECT SO LONG AS BORROWER ARE OBLIGATED
TO LENDER.
7.4. Waiver of Trial by Jury. Borrower hereby waives trial by jury in
any court and in any suit, action, or proceeding on any matter
arising in connection with, or in any way related to, this
Agreement or the other Loan Documents and/or the enforcement of
the Lender's rights and remedies hereunder or thereunder,
including, without limitation, tort claims.
7.5. Additional Waivers. Borrower unconditionally waives to the fullest
extent permitted by law (a) any requirement of diligence, (b))all
defenses which may now or hereafter exist by virtue of any statute
of limitations, stay, valuation, moratorium or similar law, except
the sole defense of payment, (c) any and all claims and
counterclaims for consequential and/or special damages, and (d)
all demands upon Borrower and all other formalities the omission
of any of which, or delay in the performance of which, might, but
for the provisions of this section, by rule of law or otherwise,
constitute grounds for relieving or discharging the Borrower in
whole or in part from any of the Obligations, it being the
intention of the Borrower that its Obligations shall not be
discharged, except by performance and then only to the extent of
such performance.
7.6. Waivers Made Knowingly. Borrower acknowledges that it makes all
waivers contained in this Agreement and the other Loan Documents
knowingly, voluntarily, without duress and only after
consideration of the ramifications of
-16-
these waivers with its attorneys. Borrower further acknowledge
that Lender has not agreed with or represented to it that the
provisions of these waivers will not be fully enforced in all
instances.
7.7. Consent to Jurisdiction. Borrower agree to submit to jurisdiction
in the State of Connecticut in any action or proceeding arising
out of this Agreement or any of the other Loan Documents, and in
furtherance of such agreement, Borrower hereby agrees and consents
that without limiting other methods of obtaining jurisdiction,
jurisdiction over the Borrower in any action or proceeding may be
obtained within or without the jurisdiction of any court located
in the State of Connecticut and that any process or notice of
motion or other application to any such court in connection with
any such action or proceeding may be served upon the Borrower by
registered or certified mail to the last known address of the
Borrower, whether such address is within or without the
jurisdiction of any such court.
7.8. No Waiver. No course of dealing between Borrower and Lender and no
failure to exercise or delay in exercising on the part of Lender
any right, power or privilege under the terms of this Agreement or
the other Loan Documents shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further
privilege. The rights and remedies provided herein or in any other
agreement are cumulative and not exclusive or in derogation of any
rights or remedies provided in and thereof, by law or otherwise.
7.9. Cross-Default. Borrower acknowledge and agree that a default under
any one of the Loan Documents shall constitute a default under
each of the other Loan Documents.
7.10. Survival of Agreements. All agreements, representations and
warranties made herein, in any agreement and in any statements,
notices, invoices, certificates, schedules, documents or other
instruments delivered to Lender in connection with this Agreement
or any other agreement shall survive the making of the Loan and
advances hereunder.
7.11. Further Documents. Borrower agrees that, at any time or from time
to time upon written request of Lender, it will execute and
deliver such further documents and do such other acts and things
as Lender may reasonably request in order to fully effect the
purposes of this Agreement and the other Loan Documents.
7.12. Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement of the parties and may not
be amended orally and shall be construed and interpreted in
accordance with the laws of the State of Connecticut, including
its conflict of laws principles.
-17-
7.13. Successors. All rights of Lender hereunder shall inure to the
benefit of its successors and assigns, and all Obligations of
Borrower shall bind its successors and assigns.
7.14. Payments. The acceptance of any check, draft or money order
tendered in full or partial payment of any Obligation hereunder is
conditioned upon and subject to the receipt of final payment in
cash.
7.15. Schedules. All schedules referred to herein and annexed hereto are
hereby incorporated into this Agreement and made a part hereof.
7.16. Acknowledgment of Copy, Use of Proceeds. Borrower acknowledges
receipt of copies of the Note and attests, represents and warrants
to Lender that advances made under the Loan are to be used for
general commercial purposes and that no part of such proceeds will
be used, in whole or in part, directly or indirectly, for the
purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are defined in Regulation U of the Board of
Governors of the Federal Reserve System.
7.17. Descriptive Headings. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and
shall not be deemed to affect the meaning or construction of any
of the provisions hereof.
7.18. Notices. Any written notice required or permitted by this
Agreement may be delivered by depositing it in the U.S. mail,
postage prepaid, or by telegraph, charges prepaid, or facsimile
addressed to Borrower or Lender at the addresses set forth at the
beginning of this Agreement. If any notice is sent to Lender
pursuant to this paragraph, it should be sent to the attention of:
Xxxxxx Xxxxxxx.
7.19. Severability. If any provision of this Agreement or application
thereof to any person or circumstance shall to any extent be
invalid, the remainder of this Agreement or the application of
such provision to persons, entities or circumstances other than
those as to which it is held invalid, shall not be affected
thereby and each provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
7.20 Commitment Fee. Borrower agrees to pay to Lender a commitment fee
payable on a quarterly basis equal to .25% of the amount of the
Loan.
-18-
In Witness Whereof, the parties have caused this Agreement to be duly executed
and delivered by the proper and duly authorized officers as of the date and year
first above written.
WITNESS:
--------------------------- FLEET NATIONAL BANK
/s/ XXXXX XXXXXXXX By: /s/ XXXX XXXXXXX
--------------------------- -----------------------------
Title: Vice President
/s/ XXXXXXX X. XXXXXXXXX ZYGO CORPORATION
---------------------------
By: /s/ XXXX X. XXXXXX
-----------------------------
Title: Vice President
---------------------------
STATE OF CONNECTICUT )
)ss.:
COUNTY OF HARTFORD )
The foregoing instrument was acknowledged before me this 4th day of June, 1997,
by Xxxxx Xxxxxxxx, a employee of FLEET NATIONAL BANK, a national banking
association, on behalf of the Lender.
/s/ XXXXX XXXXXXXX
----------------------------------
Commissioner of the Superior Court
Notary Public
My Commission Expires: January 31, 0000
XXXXX XX XXXXXXXXXXX )
)ss.:
COUNTY OF HARTFORD )
The foregoing instrument was acknowledged before me this 3rd day of June,
1997, by Xxxx X. Xxxxxx, Vice President of ZYGO
CORPORATION, a Delaware corporation, on behalf of the corporation.
/s/ XXXXX X. XXXXXXXX
----------------------------------------
Commissioner of the Superior Court
Notary Public
My Commission Expires: December 31, 2001
-19-
PROMISSORY NOTE
---------------
$3,000,000.00 Hartford, Connecticut
June 4, 1997
FOR VALUE RECEIVED, the undersigned, ZYGO CORPORATION, a Delaware corporation
located at Xxxxxx Xxxxx Xxxx, Xxx 000, Xxxxxxxxxxx, Xxxxxxxxxxx 00000-0000 (the
"Borrower"), hereby promises to pay to the order of FLEET NATIONAL BANK, a
national banking association, (the "Lender"), at its office at 000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000 or at such other place as the holder hereof may
designate, ON DEMAND the principal amount advanced hereunder and remaining
unpaid, up to a maximum amount of THREE MILLION AND NO/100 DOLLARS
($3,000,000.00) (the "Principal Amount") in lawful money of the United States,
together with interest on the Principal Amount, beginning on the date hereof,
before and after maturity or judgment, at a per annum rate determined as
provided below.
1. Interest Rate: Each advance under this Note (each a "Loan Advance")
shall bear interest at a per annum rate equal to either (a) a floating rate
equal to Lender's Prime Rate (as hereinafter defined) or (b) a fixed rate equal
to sixty (60) basis points above the LIBOR Rate (as determined for each Interest
Period applicable thereto) for available Interest Periods of thirty (30), sixty
(60) or ninety (90) days. The Borrower shall elect either option (a) or (b) as
provided below.
2. Requests for Advances: Whenever Borrower desires an advance, Borrower
shall notify Lender (which notice shall be irrevocable) by telephone, facsimile
or in writing, of the desired borrowing. Such notice (the "Notice of Borrowing")
shall specify the date of the proposed borrowing, the amount requested, whether
the advance shall be a Prime Rate Loan or a LIBOR Rate Loan, and, if a LIBOR
Rate Loan, the duration of the initial available Interest Period. Each Notice of
Borrowing for advances which are Prime Rate Loans must be received by Lender no
later than 11:00 a.m., Hartford, Connecticut time on the day such borrowing is
requested, and each Notice of Borrowing for advances which are LIBOR Rate Loans
must be received by Lender no later than 10:00 a.m., Hartford, Connecticut time
at least three (3) Business Days' prior to the day such borrowing is requested.
Any Notice of Borrowing that is not in writing shall be followed by a written
confirmation by the Borrower, provided that if such written confirmation differs
in any respect from the action taken by Lender, the records of Lender shall
control, absent manifest error. Lender shall enter each Loan Advance as a debit
on a loan account maintained by Borrower with Lender (the "Loan Account").
Lender may also record in the Loan Account, in accordance with customary banking
procedures, all fees, accrued and unpaid interest, late fees, usual and
customary bank charges for the maintenance and administration of accounts
maintained by Borrower and other fees and charges which are properly chargeable
to Borrower in connection with the Loan Advances and all payments, subject to
collection, made by Borrower on account of or to Lender. Borrower may repay and
reborrow advances that are made under this Note, subject, however, to the
prepayment terms contained below. Borrower shall not have more than three (3)
LIBOR Rate Loans outstanding at any
one time. Borrower's right to request advances under this Note shall terminate
on the Termination Date. Advances that are LIBOR Rate Loans shall be in the
minimum amount of $l00,000 each.
3. Election and Continuation of Interest Periods. Any Prime Rate Loan shall
continue as a Prime Rate Loan until the Borrower elects to convert it to a LIBOR
Rate Loan as provided below. Any LIBOR Rate Loan may be continued as such upon
the expiration of the then current Interest Period by the Borrower giving
irrevocable written notice to Lender of the duration of the next available
Interest Period to be applicable to any such LIBOR Rate Loan not less than three
(3) Business Days prior to the last Business Day of the then current Interest
Period with respect to such LIBOR Rate Loan, provided that no LIBOR Rate Loan
may be continued as such: (i) at a time when any Event of Default (or event or
condition which would constitute an Event of Default but for the giving of
notice or passage of time or both) has occurred and is continuing and (ii) after
the date that is thirty (30) days prior to the Termination Date. Unless Borrower
elects to convert to a different interest rate as provided below, if a LIBOR
Rate Loan is not continued as a LIBOR Rate Loan, all as provided above, then any
such loan shall automatically be converted to a Prime Rate Loan on the last day
of the then expiring Interest Period.
4. Conversion of Loans to a Different Interest Rate. The Borrower may elect
from time to time to convert (a) a LIBOR Rate Loan to a Prime Rate Loan or (b) a
Prime Rate Loan to a LIBOR Rate Loan as provided in this section. Borrower shall
exercise such election by giving the Lender not less than three (3) Business
Days prior irrevocable written notice of such election; provided that any such
conversion of a LIBOR Rate Loan to a Prime Rate Loan shall only be made on the
last Business Day of the then current Interest Period with respect thereto. Any
such notice of conversion to a LIBOR Rate Loan shall specify the length of the
available Interest Period applicable thereto.
5. Payments of Interest. Interest on this Note shall be calculated on the
basis of a 360 day year and the actual number of days elapsed. Monthly payments
of interest shall be due and payable in arrears on the first day of each month
immediately following each and every month in which a Prime Rate Loan is
outstanding and on the last day of each Interest Period for each and every LIBOR
Rate Loan until this Note is paid in full.
6. Payments of Principal. If not sooner paid, the aggregate outstanding
Principal Amount of this Note, together with all accrued and unpaid interest
thereon and any other fees or charges then due, shall be due and payable on
demand of the Lender but if not so demanded, all such amounts shall be due and
payable on the Termination Date.
7. Definitions. As used in this Note and not defined elsewhere in this
Note, the following terms shall have the following meanings:
a. "Business Day" means any day other than a day on which commercial
banks in Hartford, Connecticut are required or permitted by law to close.
-2-
b. "Interest Period" means with respect to advances bearing interest
at the LIBOR Rate, an available period of thirty (30), sixty (60) or ninety
(90) days, provided that:
(1) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall end on the immediately
preceding Business Day;
(2) any Interest Period that begins on the last Business 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 Business Day of a calendar month; and
(3) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date.
c. "LIBOR Rate" means, with respect to any LIBOR Rate Loan for each
applicable Interest Period, the rate per annum determined by the Lender to
be equal to the quotient of (a) the London Interbank Offered Rate for such
LIBOR Rate Loan for such Interest Period, divided by (b) one (1) minus the
Reserve Percentage for such Interest Period, expressed as follows:
LIBOR Rate = London Interbank Offered Rate
-----------------------------
1 - Reserve Percentage
d. "LIBOR Rate Loan" means an advance that bears interest at a rate
equal to the LIBOR Rate plus sixty (60) basis points.
e. "London Interbank Offered Rate" means, with respect to any
applicable Interest Period for a LIBOR Rate Loan, the rate per annum at
which the Eurodollar office of the Lender is offered, in the London
interbank Dollar deposits market, at or about 11:00 a.m. London time, two
(2) business days prior to the first day of such Interest Period, Dollar
deposits, for a period, and in an amount, comparable to such Interest
Period and principal amount of the LIBOR Rate Loan which shall be made by
the Lender and outstanding during such Interest Period.
f. "Prime Rate" means the rate of interest announced from time to time
by Lender at its office in Hartford, Connecticut as its prime rate. Such
Prime Rate may not be the lowest or best rate that is made available by
Lender to its commercial borrowers.
g. "Prime Rate Loan" means an advance that bears interest at a rate
equal to Lender's Prime Rate. The interest rate on each Prime Rate Loan
shall change, without notice to Borrower, each time that Lender's Prime
Rate changes so that the rate of interest on a Prime Rate Loan is at all
times equal to Lender's Prime Rate.
h. "Reserve Percentage" means the maximum marginal percentage as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirement for Lender in respect of
eurodollar deposits having a maturity equal to the
-3-
Interest Period as the Borrower may elect pursuant to the terms of this Note.
With respect to the LIBOR Rate, any change in the interest rate because of a
change in the Reserve Percentage shall become effective, without notice or
demand, on the date on which such change in the Reserve Percentage becomes
effective.
i. "Termination Date" means November 26, 1997.
8. Illegality. Notwithstanding any other provisions hereof, if any
applicable law or governmental regulation, guideline, order or directive, or any
change therein or in the interpretation or application thereof by any
governmental authority charged with the interpretation or the administration
thereof (whether or not having the force of law) shall make it unlawful for the
Lender to make or maintain LIBOR Rate Loans as contemplated by this Note: (i)
the obligation of the Lender to continue LIBOR Rate Loans shall forthwith be
cancelled, and (ii) such amounts then outstanding shall be automatically
converted, without notice, to Prime Rate Loans on the last day of the then
current Interest Period or within such earlier time as required by law. If any
such conversion of LIBOR Rate Loans is made on a day that is not the last
Business Day of the then current Interest Period applicable thereto, Borrower
shall pay the Lender such amount or amounts required pursuant to Section 13
below.
9. Basis for Determining LIBOR Inadequate or Unfair. In the event that the
Lender shall have determined (which determination, absent manifest error, shall
be conclusive and binding upon Borrower) that (i) by reason of circumstances
affecting the Interbank LIBOR market, adequate and reasonable means do not exist
for determining the LIBOR Rate, or (ii) Dollar deposits in the relevant amount
and for the relevant maturity are no longer available to the Lender in the
Interbank LIBOR market, or (iii) the continuation of LIBOR Rate Loans has been
made impractical or unlawful by the occurrence of a contingency that materially
and adversely affects the Interbank LIBOR market, or (iv) the LIBOR Rate will
not adequately and fairly reflect the cost to the Lender of maintaining LIBOR
Rate Loans, or (v) the LIBOR Rate shall no longer represent the effective cost
to the Lender of U.S. Dollar deposits in the relevant market for deposits in
which it regularly participates, the Lender shall give the Borrower notice of
such determination as soon as practicable. If such notice is given all LIBOR
Rate Loans shall be automatically converted, without notice, to Prime Rate Loans
effective on the last Business Day of the then current Interest Period
applicable thereto. Until such notice has been withdrawn, the LIBOR Rate shall
not be continued.
10. Costs and Expenses. The Borrower shall pay all taxes levied or assessed
on this Note or the debt evidenced hereby against the Lender, together with all
costs, expenses and attorneys' and other professional fees incurred in any
action to collect and/or enforce this Note or to enforce the Loan Agreement
between Borrower and Lender dated the same date as this Note (the "Loan
Agreement") or any other agreement relating to this Note or the Loan Agreement
or any other agreement or in any litigation or controversy arising from or
connected with the Loan Agreement or any other agreement, or this Note.
-4-
11. Increased Costs. In the event that applicable law, treaty or regulation
or directive from any government, governmental agency or regulatory authority,
or any change therein or in the interpretation or application thereof, or
compliance by the Lender with any request or directive (whether or not having
the force of law) from any central bank or government, governmental agency or
regulatory authority, shall:
a. subject the Lender to any tax of any kind whatsoever (except taxes
on the overall net income of the Lender) with respect to the Loan
Agreement, this Note or any of the loans made by it, or change the basis of
taxation of payments to the Lender in respect thereof (except for changes
in the rate of tax on the overall net income of the Lender);
b. impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirements 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 Lender, including (without limitation) pursuant to Regulations of
the Board of Governors of the Federal Reserve System; or
c. in the opinion of the Lender, cause this Note, any loan made under
this Note or under the Loan Agreement to be included in any calculations
used in the computation of regulatory capital standards; or
d. impose on the Bank any other condition;
and the result of any of the foregoing is to increase the cost to the Lender, by
an amount that the Lender deems to be material, of making, converting into,
continuing and/or maintaining the loans made pursuant to this Note (the "Loans")
or to reduce the amount of any payment (whether of principal, interest or
otherwise) in respect of any of such Loans, then, in any case, the Borrower
shall promptly pay the Lender, upon its demand, such additional amounts
necessary to compensate the Lender for such additional costs or such reduction
in payment, as the case may be (collectively the "Additional Costs"). The Lender
shall certify the amount of such Additional Costs to the Borrower, and such
certification, absent manifest error, shall be deemed conclusive.
12. Capital Adequacy Protection. If, after the date hereof, the Lender
shall have determined that the adoption of any applicable law, governmental
rule, regulation or order regarding capital adequacy of banks or bank holding
companies, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by the Lender with any request or directive regarding capital adequacy (whether
or not having the force of law and whether or not failure to comply therewith
would be unlawful, so long as the Lender believes in good faith that such has
the force of law or that the failure to so comply would be unlawful) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on any of the Lender's capital as a consequence of
the Lender's obligations hereunder to a level below that which the Lender could
have achieved but for such adoption, change or compliance
-5-
(taking into consideration the Lender's policies with respect to capital
adequacy immediately before such adoption, change or compliance and assuming
that the Lender's capital was fully utilized prior to such adoption, change or
compliance) by an amount deemed by the Lender in its judgment to be material,
then, promptly upon demand, the Borrower shall immediately pay to the Lender,
from time to time as specified by the Lender, such additional amounts as shall
be sufficient to compensate the Lender for such reduced return, together with
interest on each such amount from the date of such specification by the Lender
until payment in full thereof at the highest rate of interest (other than the
default rate of interest) due on the Loans. A certificate of the Lender setting
forth the amount to be paid to the Lender shall, in the absence of manifest
error, be deemed conclusive. In determining such amount, the Lender shall use
any reasonable averaging and attribution methods. The Borrower may, however,
avoid paying such amounts for future rate of return reductions if, within the
maximum borrowings permitted herein, the Borrower borrows such amounts as will
cause the Lender to avoid any such future rate of return reductions which would
otherwise be caused by such changed capital adequacy requirements or the
Borrower agrees to a reduction in the Loans to achieve the same result.
13. Indemnity. The Borrower agrees to indemnify the Lender and to hold the
Lender harmless from any loss (including any of the additional costs referred to
above and any lost profits) or expense that it may sustain or incur as a
consequence of (i) a default by the Borrower in the payment of the principal of
or interest due on this Note, or (ii) the making of a prepayment of the
Principal Amount bearing interest at the LIBOR Rate on a day which is not the
last day of the then current Interest Period applicable thereto, including, but
not limited to, in each case any such loss or expense arising from the
reemployment of funds obtained by it or from fees, interest or other amounts
payable to terminate the deposits from which such funds were obtained. The
Lender shall prepare a certificate as to any additional amounts payable to it
pursuant to this Section 13, which certificate shall be submitted by the Lender
to the Borrower and shall, absent manifest error, be deemed conclusive.
14. Lawful Interest. Notwithstanding any provisions of this Note, it is the
understanding and agreement of the Borrower and Lender that the maximum rate of
interest to be paid by the Borrower to the Lender shall not exceed the highest
or the maximum rate of interest permissible to be charged by a commercial lender
such as the Lender to a commercial borrower such as the Borrower under the laws
of the State of Connecticut. Any amount paid in excess of such rate shall be
considered to have been payments in reduction of principal.
15. Late Charge. Without limiting the Lender's rights and remedies with
respect to the Event of Default that will have occurred, the Borrower hereby
agrees to pay a "late charge" equal to five percent (5%) of any installment of
interest or other amount due to the Lender which is not paid within fifteen (15)
days of the due date and is not due to the Lender's failure to debit Borrower's
account on a timely basis. Thereof to defray the extra expense involved in
handling such delinquent payment.
-6-
16. Prepayments.
a. The Borrower may, at its option and upon two (2) Business Days'
prior written notice (which notice shall be irrevocable), prepay the
Principal Amount of a LIBOR Rate Loan or a Prime Rate Loan on the following
conditions: (a) the Borrower shall pay all accrued interest on the
Principal Amount being paid to the date of the prepayment and, in the case
of prepayments in full, all fees, charges, costs, expenses and other
amounts then due hereunder; and (b) such Principal Amount of a LIBOR Rate
Loan shall only be prepaid on the last Business Day of the then current
Interest Period with respect thereto. In its notice, the Borrower shall
specify the date and amount of the prepayment. In the event that any
prepayment of the Principal Amount of a LIBOR Rate Loan is required or
permitted on a date other than the last Business Day of the then current
Interest Period with respect thereto, the Borrower shall indemnify the
Lender therefore as provided in this Note.
b. In the event that Borrower makes a prepayment and does not
specify in its notice of prepayment whether the prepayment is to be applied
to a LIBOR Rate Loan or a Prime Rate Loan, then Lender shall apply such
prepayment in such order as Lender in its sole discretion shall determine.
17. Events of Default. The Borrower agrees that the occurrence of an Event
of Default under the Loan Agreement shall constitute an Event of Default under
this Note. Reference is hereby made to the Loan Agreement for the other terms
and conditions relating to the loan evidenced by this Note which are
incorporated in this Note by reference. Upon demand of the amounts due hereunder
by the Lender or upon the occurrence of any Event of Default, the availability
of advances hereunder shall, at the option of the Lender, be automatically
terminated and the Lender, at its option, may declare all advances outstanding
hereunder, together with accrued interest thereon and all applicable late
charges, other amounts due under this Note and all other liabilities and
obligations of the Borrower to the Lender to be immediately due and payable,
whereupon the same shall become immediately due and payable; all of the
foregoing without demand, presentment, protest or notice or any kind, all of
which are hereby expressly waived by the Borrower. Failure to exercise such
option shall not constitute a waiver of the right to exercise the same in the
event of any subsequent default. Upon the occurrence of any Event of Default,
without in any way affecting the Lender's other rights and remedies, or after
maturity or judgment, the interest rate applicable to the outstanding principal
balance of this Note shall automatically change without notice to a floating per
annum rate equal to two percentage points (2.0%) above the otherwise applicable
rate.
18. Lien and Right of Setoff. The Borrower hereby gives the Lender a right
of setoff for all liabilities arising hereunder upon and against all the
deposits, credits and property of Borrower now or hereafter in the possession,
custody, safekeeping or control of the Lender or in transit to it. Lender may,
upon the occurrence of an Event of Default, without notice and without first
resorting to any collateral which may now or hereafter secure this Note, apply
or set off the same, or any part thereof, to any liability of the Borrower, even
though unmatured.
-7-
19. No Waiver. Failure by the Lender to insist upon the strict performance
by Borrower of any terms and provisions herein shall not be deemed to be a
waiver of any terms and provisions herein, and the Lender shall retain the right
thereafter to insist upon strict performance by the Borrower of any and all
terms and provisions of this Note or any agreement securing the repayment of
this Note.
20. Governing Law. This Note shall be governed by the laws of the State of
Connecticut.
21. Prejudgment Remedy and Other Waivers. THE BORROWER ACKNOWLEDGES THAT
THE LOAN EVIDENCED BY THIS NOTE IS A COMMERCIAL TRANSACTION AND WAIVES ITS RIGHT
TO NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, OR
AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT
REMEDY WHICH LENDER MAY DESIRE TO USE, AND FURTHER, WAVES DILIGENCE, DEMAND,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST,
AND NOTICE OF ANY RENEWALS OR EXTENSIONS OF THIS NOTE, AND ALL RIGHTS UNDER ANY
STATUTE OF LIMITATION. THE BORROWER ACKNOWLEDGES THAT IT MAKES THIS WAIVER
KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER CONSIDERATION OF THE
RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
22. Jury Waiver. THE BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY COURT AND
IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN
ANY WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS NOTE IS A PART
AND/OR THE ENFORCEMENT OF ANY OF THE LENDER'S RIGHTS AND REMEDIES, INCLUDING
WITHOUT LIMITATION, TORT CLAIMS. THE BORROWER ACKNOWLEDGES THAT IT MAKES THIS
WAIVER KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER CONSIDERATION OF
THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
this 4th day of June, 1997.
ZYGO CORPORATION
By /s/ XXXX X. XXXXXX
-----------------------
Title: Vice President
-8-
