Exhibit 10.38
MKS INSTRUMENTS, INC.
NINTH AMENDMENT
TO LOAN AGREEMENT
This Ninth Amendment (the "Amendment") dated as of July 31, 2001
concerns the Loan Agreement dated as of October 31, 1995 (the "Loan Agreement"),
between MKS Instruments, Inc. (the "Borrower") and Fleet National Bank (f/k/a
BankBoston, N.A. and The First National Bank of Boston, the "Lender"), as
amended on February 23, 1996, February 4, 1997, February 3, 1998, January 28,
1999, January 1, 2000, September 1, 2000, January 1, 2001 and April 30, 2001.
Capitalized terms used herein but not otherwise defined shall have the meanings
assigned to them in the Loan Agreement.
WHEREAS, the Loan Agreement was previously amended to provide for terms
consistent with those set forth in the First Amended and Restated Loan Agreement
among the Borrower, the Lender and The Chase Manhattan Bank, which is now being
replaced by a new Credit Agreement (the "Credit Agreement"); and
WHEREAS, the Lender and the Borrower are willing to amend the Loan
Agreement to make its terms consistent with the terms in the Credit Agreement;
NOW, THEREFORE, the Lender and the Borrower agree as follows:
Section 1. Amendment of the Loan Agreement.
(A) Article I of the Loan Agreement is hereby amended by the deletion
of all subsection numbers at the beginnings of the definitions, the deletion of
the definitions of "Base Rate", "Cash Flow Ratio", "Consolidated Debt Service",
"Debt-to-New Worth Ratio", "Indebtedness", and "Sub S Dividends", and the
addition of the following definitions in alphabetical order:
"Accounts" shall mean, at any time, all accounts receivable
of Borrower and its subsidiaries on a consolidated basis determined in
accordance with GAAP appearing on the Borrower's consolidated balance
sheet.
"Adjustment Date" shall mean the first day of the month
immediately following the month in which a Compliance Certificate is
to be delivered by the Borrower pursuant to Section 6.1(c).
"Applicable Margin" shall mean for each period commencing on
an Adjustment Date through the date immediately preceding the next
Adjustment Date, the applicable margin set forth below with respect to
the Debt-To-Tangible Net Worth Ratio, as determined for the most
recent fiscal quarter for which the Borrower has delivered its
financial statements pursuant to Section 6.1(a) or (b) and Compliance
Certificate pursuant to Section 6.1(c):
DEBT-TO-TANGIBLE APPLICABLE MARGIN
NET WORTH RATIO FOR LIBOR LOANS
Greater than or equal to 2.00%
0.50:1.00
Less than 0.50:1.00 but 1.50%
greater than or equal to
0.25:1.00
Less than 0.25:1.00 1.25%
"Base Rate" shall mean the higher of (a) the annual rate of
interest announced from time to time by Lender at Lender's office at
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, as its "base rate" or (b)
one-half of one percent (1/2%) above the Federal Funds Effective Rate.
For the purposes of this definition, "Federal Funds Effective Rate"
shall mean, for any day, the rate per annum equal to the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Lender from three funds brokers of
recognized standing selected by the Lender.
"Change in Control" shall be deemed to have occurred at such
time after the date hereof that any person (other than, in the case of
clause (ii) below, Xxxx X. Xxxxxxxx, together with its affiliates and
associates (as defined in Rule 12b-2 under the Securities Exchange Act
of 1934 (the "Exchange Act") or any successor rule thereto):
(i) shall file with the Securities and Exchange
Commission and deliver to the Borrower a report under or in
response to Schedule 13D or 14D-1 (or any successor schedule,
form or report) pursuant to the Exchange Act disclosing that
such person has become the beneficial owner (as defined in
Rule 13D-3 under the Exchange Act, or any successor
provisions) of more than 25% of the total voting power of all
classes of voting stock of the Borrower or
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(ii) shall succeed in having a sufficient number of
its nominees elected to the board of directors of the Borrower
such that such nominees so elected (whether new or continuing
as directors) shall constitute a majority of the board of
directors of the Borrower.
"Consolidated Current Liabilities" shall mean, at any time,
all current liabilities of Borrower and its subsidiaries on a
consolidated basis that in accordance with GAAP are properly
classified as current liabilities plus all other indebtedness for
borrowed money except such indebtedness that is subordinated to the
payment of the Obligations pursuant to an agreement in form and
substance acceptable to the Lender ("Subordinated Debt").
"Consolidated Quick Assets" shall mean, at any time, the sum
of the cash, Accounts, Short Term Investments and Long Term Fixed
Income Investments of the Borrower and its Subsidiaries, provided the
sum of Long Term Fixed Income Investments shall not exceed 25% of the
amount of the Borrower's cash..
"Consolidated Total Liabilities" shall mean, at any time, all
liabilities of the Borrower and its Subsidiaries on a consolidated
basis that in accordance with GAAP are properly classified as
liabilities on the Borrowers' consolidated balance sheet plus the sum
of (i) the face amount of outstanding Letters of Credit, (ii) sales of
receivables described in clause (f) of the definition of
"Indebtedness" below and (iii) Synthetic Leases. In computing such
aggregate liabilities, the "amount" of the liability with respect to
any such sale of receivables shall be the amount of unrecovered
capital or principal investment of the purchaser (other than the
Borrower or any of its wholly-owned Subsidiaries) thereof, excluding
amounts representative of yield or interest earned on such investment,
and the "amount" of any Synthetic Lease shall be the stipulated loss
value, termination value or other equivalent amount.
"ERISA" shall have the meaning set forth in Section 4.12.
"GAAP" shall mean generally accepted accounting principles.
"Indebtedness" shall mean, for any Person,
(a) all obligations of any other Person the payment
or collection of which such Person has guaranteed (except by
reason of endorsement for collection in the ordinary course of
business) or in respect of which such Person is liable,
contingently or otherwise, including, without limitation,
liable by way of agreement to purchase, to provide funds for
payment, to supply funds to or otherwise to invest in such
other Person, or otherwise to assure a creditor against loss,
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(b) all obligations of any other Person for borrowed
money or for the deferred purchase price of property or
services secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise,
to be secured by) any mortgage, or other encumbrance upon or
in property (including, without limitation, accounts and
contract rights) owned by such Person, whether or not such
Person has assumed or become liable for the payment of such
indebtedness or obligations,
(c) Financing Lease Obligations of such Person,
(d) every reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or
similar facilities issued for the account of such Person,
(e) every obligation of such Person under any
Synthetic Lease,
(f) all sales by such Person of (i) accounts or
general intangibles for money due or to become due, (ii)
chattel paper, instruments or documents creating or evidencing
a right to payment of money or (iii) other receivables
(collectively "receivables"), whether pursuant to a purchase
facility or otherwise, other than in connection with the
disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for
collection and not as a financing arrangement, and together
with any obligation of such Person to pay any discount,
interest, fees, indemnities, penalties, recourse, expenses or
other amounts in connection therewith,
(g) every obligation of such Person to purchase,
redeem, retire or otherwise acquire for value any shares of
capital stock of any class issued by such Person, any
warrants, options or other rights to acquire any such shares,
or any rights measured by the value of such shares, warrants,
options or other rights, and
(h) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing
agreement or arrangement (including, without limitation, caps,
floors, collars and similar agreements), the value of which is
dependent upon interest rates, currency exchange rates,
commodities or other indices.
"Loan Documents" shall mean each of this Agreement, the Note
and any other document or instrument executed by the Borrower or any
of its Affiliates in favor of the Lender in connection with the
transactions contemplated hereby.
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"Long Term Fixed Income Investments" shall mean investment
grade bonds with long-term debt ratings of A- or A3 or higher by at
least one nationally recognized rating agency and maturities of three
years or less.
"Material Subsidiary" shall mean each domestic Subsidiary of
the Borrower (other than Massachusetts securities corporations) with
gross revenues in excess of 5% of the total gross revenues of the
Borrower and its Subsidiaries, determined on a consolidated basis, or
assets in excess of 5% of the total assets of Borrower and its
Subsidiaries, determined on a consolidated basis, in each case as of
the end of Borrower's last fiscal quarter.
"Quick Ratio" shall have the meaning set forth in Section
7.11.
"Short Term Investments" shall mean short term investments as
determined in accordance with GAAP.
"Subordinated Debt" shall have the meaning set forth in the
definition of Consolidated Current Liabilities set forth above
"Synthetic Lease" shall mean any lease that is treated as an
operating lease under GAAP and as a loan or financing for U.S. income
tax purposes.
"Total Liabilities-to-Tangible Net Worth Ratio" shall have the
meaning set forth in Section 7.10.
(B) Section 2.2.1 of the Loan Agreement is hereby deleted in its
entirety and replaced by the following:
2.2.1. Borrower agrees to pay interest in respect of the
unpaid principal amount of the Term Loan from the date of this
Agreement until paid in full as follows. The Term Loan shall bear
interest at the Base Rate unless the Borrower desires to pay interest
on all or a portion of the Term Loan at the LIBOR Rate plus the
Applicable Margin; provided, however, that the Applicable Margin shall
not be less than 1.5% prior to the first day of the month following the
month in which the Borrower shall deliver to the Lender the financial
statements required by Section 6.1(b) for the year ended December 31,
2001 and related Compliance Certificate.
(C) Section 6.1 of the Loan Agreement is hereby deleted in its
entirety and replaced by the following:
6.1 Reporting Requirements. The Borrower shall furnish to the
Lender:
(a) As soon as available and in any event within
forty-five days after the end of each of the first three quarters of
each fiscal year of the Borrower and its Subsidiaries, (i) an
unaudited consolidated and consolidating balance sheet of the
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Borrower and its Subsidiaries as of the end of such quarter and (ii)
unaudited consolidated and consolidating statements of operations, cash
flows and stockholders' equity of the Borrower and its Subsidiaries for
the period commencing at the end of the previous fiscal year and ending
with the end of such quarter, all in reasonable detail and duly
certified by the chief financial officer or treasurer of the Borrower
as having been prepared in accordance with generally accepted
accounting principles consistently applied (subject to addition of
notes and ordinary year-end audit adjustments), together with a
certificate of the chief financial officer or treasurer of the Borrower
stating that no Default or Event of Default has occurred and is
continuing or, if a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action that
the Borrower proposes to take with respect thereto;
(b) As soon as available and in any event within
ninety days after the end of each fiscal year of the Borrower, the
audited consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such fiscal year and the audited consolidated
statements of operations, cash flows and stockholders' equity of the
Borrower and its Subsidiaries for such fiscal year, in each case
accompanied by the unqualified opinion with respect thereto of the
Borrower's independent public accountants and a certification by such
accountants stating that they have reviewed this Agreement and whether,
in making their audit, they have become aware of any Default or Event
of Default and if so, describing its nature, along with the related
unaudited consolidating balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal year and the unaudited
consolidating statements of operations, cash flows and stockholders'
equity of the Borrower and its Subsidiaries for such fiscal year;
(c) Concurrent with, and no later than the required
date for delivery of the financial information outlined in Sections
6.1(a) and (b), a certificate signed by the chief financial officer or
treasurer of the Borrower substantially in the form of Exhibit D
hereto (the "Compliance Certificate");
(d) Not later than forty-five days after the end of
each fiscal year of the Borrower, the Borrower's representative
forecast for the next fiscal year on a consolidated basis, including,
at a minimum, projected statements of profit and loss and projected
cash flow, prepared in accordance with generally accepted accounting
principles consistently applied;
(e) Promptly upon receipt thereof, one copy of each
other report submitted to the Borrower or any Subsidiary by
independent accountants in connection with any annual, interim or
special audit made by them of the books of the Borrower or any
Material Subsidiary;
(f) Promptly after the commencement thereof, notice
of all actions, suits and proceedings before any court, arbitration
tribunal or governmental regulatory authority, commission, bureau,
agency or public regulatory body that, if determined adversely to the
Borrower or any Subsidiary of the Borrower, would be reasonably likely
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to have a material adverse effect on the consolidated financial
condition or results of operations of the Borrower and its
Subsidiaries taken as a whole;
(g) As soon as possible, and in any event within five
days after the Borrower shall know of the occurrence of any Default or
Event of Default, the written statement of the chief financial officer
or treasurer of the Borrower setting forth details of such Default or
Event of Default and action that the Borrower proposes to take with
respect thereto;
(h) As soon as possible, and in any event within five
days after the occurrence thereof, written notice as to any other
event of which the Borrower becomes aware that with the passage of
time, the giving of notice or otherwise, is reasonably likely to
result in a material adverse change in the consolidated financial
condition or results of operations of the Borrower and its
Subsidiaries taken as a whole;
(i) Promptly after Borrower becomes aware thereof,
written notice of any noncompliance with ERISA that with the passage
of time, the giving of notice or otherwise, is reasonably likely to
result in a liability to the Borrower in excess of $1,000,000; and
(j) Such other information respecting the business or
properties or the condition or operations, financial or otherwise, of
the Borrower as the Lender may from time to time reasonably request.
(D) Section 6.3(a) of the Loan Agreement is hereby deleted in its
entirety and replaced by the following:
(a) The Borrower will continue to engage in business
of the same general nature as the business currently engaged in by the
Borrower. The Borrower will at all times maintain, preserve and
protect all material franchises and trade names and preserve all the
Borrower's material tangible property used or useful in the conduct of
its business and keep the same in good repair, working order and
condition, ordinary wear and tear excepted, and from time to time make
all needful and proper repairs, renewals, replacements, betterments,
and improvements thereto so that the business carried on in connection
therewith may be conducted properly and advantageously at all times;
provided that nothing in this Section 6.3 shall prevent the Borrower
from discontinuing the operation and maintenance of any of its
properties or any of those of its Subsidiaries (including the
voluntary liquidation and dissolution of a Subsidiary other than a
Material Subsidiary) if such discontinuance is, in the judgment of the
borrower, desirable in the conduct of its or their business and does
not materially adversely affect the business of the Borrower and its
Subsidiaries on a combined basis.
(E) Article VI of the Loan Agreement is hereby further amended by the
addition of the following new Section 6.9:
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Guaranties. The Borrower shall cause any Subsidiary that
becomes a Material Subsidiary promptly thereafter to execute and
deliver a Guaranty to the Lender.
(F) Article VII of the Loan Agreement is hereby deleted in its entirety
and replaced by the following:
ARTICLE VII.
NEGATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that from the date of
execution of this Agreement and until the payment in full of the
principal of and interest upon the Notes and payment and performance
of all other Obligations, unless the Lender shall otherwise consent in
writing, the Borrower will not, and will not cause or permit any of
its Subsidiaries to:
7.1 Sale of Assets; Mergers, Etc.
(a) Sale of Assets. Except for sales in the ordinary
course of business, sell, transfer, or otherwise dispose of, to any
Person any assets (including the securities of any Subsidiary) other
than assets having an aggregate fair market value less than five
percent (5%) of Borrower's Consolidated Tangible Net Worth.
(b) Mergers, Etc. Consolidate with or merge into any
other Person or permit any other Person to consolidate with or merge
into it, or acquire all or substantially all of the capital stock or
assets of any Person, or sell, assign, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its assets to any Person, except that
(1) a Subsidiary may consolidate with or merge into,
or sell, assign, lease or otherwise dispose of any or all of
its assets to, the Borrower or another Subsidiary; and
(2) the Borrower or any of its Subsidiaries may
acquire all or substantially all of the capital stock or
assets of any Person or consolidate or merge with any Person
provided (i) such Person is engaged in a line of business
substantially similar to one or more of Borrower's existing
lines of business, (ii) the aggregate purchase price liability
incurred between the date hereof and the Revolver Termination
Date, including all contingent liabilities, when aggregated
with all such acquisitions and any Investments permitted under
Section 7.6(3) during such period shall not exceed
$20,000,000, and if 80% or more of the purchase price is paid
in
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capital stock of the Borrower, 20% of Consolidated Tangible
Net Worth as of the end of the most recent fiscal quarter,
(iii) based on a pro forma calculation of the ratios set forth
in Sections 7.9 - 7.11 as of the date such acquisition is
closed, assuming consolidation of the acquired business with
the Borrower for the four full fiscal quarters ended
immediately preceding such closing and pro forma debt and debt
service payments based on scheduled principal payments,
including acquisition borrowings, if any, and pro forma
interest on total debt at then prevailing borrowing rates,
Borrower is in compliance with the financial covenants set
forth in Sections 7.9 - 7.11, and (iv) all contingent
liability and contingent payment obligations incurred by
Borrower or any of its Subsidiaries in connection with such
transaction shall be reasonably acceptable to the Lender.
7.2. Liens and Encumbrances.
(a) Create incur, assume or permit to exist any of
its real or personal property, whether now owned or subsequently
acquired, to be subject to any Lien other than Liens described below
(which may herein be referred to as "Permitted Liens"):
(1) Liens securing the payment of taxes,
assessments or governmental charges or levies or the
demands of suppliers, mechanics, carriers,
warehousers, landlords and other like Persons, which
payments are not yet due and payable or (as to taxes)
may be paid without interest or penalty; provided,
that, if such payments are due and payable, such
Liens shall be permitted hereunder only to the extent
that (A) all claims that the Liens secure are being
actively contested in good faith and by appropriate
proceedings, (B) adequate book reserves have been
established with respect thereto to the extent
required by generally accepted accounting principles,
and (C) such Liens do not in the aggregate materially
interfere with the owning company's use of property
necessary or material to the conduct of the business
of the Borrower and its Subsidiaries taken as a
whole;
(2) Liens incurred or deposits made in the
ordinary course of business (A) in connection with
worker's compensation, unemployment insurance, social
security and other like laws, or (B) to secure the
performance of letters of credit, bids, tenders,
sales contracts, leases, statutory obligations,
surety, appeal and performance bonds and other
similar obligations, in each
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case not incurred in connection with the borrowing of
money, the obtaining of advances or the payment of
the deferred purchase price of property;
(3) Liens not otherwise described in Section
7.2(a)(1) or (2) that are incurred in the ordinary
course of business and are incidental to the conduct
of its business or ownership of its property, were
not incurred in connection with the borrowing of
money, the obtaining of advances or the payment of
the deferred purchase price of property and do not in
the aggregate materially detract from the value of,
or materially interfere with the owning company's use
of, property necessary or material to the conduct of
the business of the Borrower and its Subsidiaries
taken as a whole;
(4) Liens in favor of the Lender;
(5) Judgment liens or attachments that shall
not have been in existence for a period longer than
30 days after the creation thereof, or if a stay of
execution shall have been obtained, for a period
longer than 30 days after the expiration of such stay
or if such an attachment is being actively contested
in good faith and by appropriate proceedings, for a
period longer than 30 days after the creation
thereof;
(6) Liens existing as of the Closing Date
and disclosed on the Disclosure Schedule hereto;
(7) Liens provided for in equipment or
Financing Leases (including financing statements and
undertakings to file financing statements) provided
that they are limited to the equipment subject to
such leases and the proceeds thereof;
(8) Leases or subleases with third parties
or licenses and sublicenses granted to third parties
not interfering in any material respect with the
business of the Borrower or any Subsidiary of the
Borrower;
(9) Any Lien on any asset of any corporation
existing at the time such corporation is merged into
or consolidated with (or acquired in accordance with
Section 7.1(b) by) the Borrower or a Subsidiary of
the Borrower and not created in contemplation of such
event;
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(10) Any Lien existing on any asset prior to
the acquisition thereof by the Borrower or any
Subsidiary of the Borrower and not created in
contemplation of such event;
(11) Liens in respect of any purchase money
obligations for tangible property used in its
business, which obligations shall not at any time
exceed 5% of Consolidated Tangible Net Worth,
provided that any such encumbrances shall not extend
to property and assets of the Borrower or any
Subsidiary not financed by such a purchase money
obligation;
(12) Easements, rights of way, restrictions
and other similar charges or Liens relating to real
property and not interfering in a material way with
the ordinary conduct of its business; and
(13) Liens on its property or assets created
in connection with the refinancing of Indebtedness
secured by Permitted Liens on such property, provided
that the amount of Indebtedness secured by any such
Lien shall not be increased as a result of such
refinancing and no such Lien shall extend to property
and assets of the Borrower or any Subsidiary not
encumbered prior to any such refinancing.
(b) In case any property is subjected to a Lien in
violation of Section 7.2(a), the Borrower will make or cause
to be made provision whereby the Note will be secured equally
and ratably with all other obligations secured by such
property, and in any case the Note shall have the benefit, to
the full extent that the holder may be entitled thereto under
applicable law, of an equitable Lien equally and ratably
securing the Note. Such violation of Section 7.2(a) shall
constitute an Event of Default hereunder, whether or not any
such provision is made pursuant to this Section 7.2(b).
(c) None of the equity interests of the Borrower or
any Subsidiary in any Subsidiary is subject to any Lien
(including any Permitted Lien), and neither the Borrower nor
any Subsidiary will agree with any third party not to cause or
permit any of its real or personal property, whether now owned
or subsequently acquired, to be subject to Liens (with or
without exceptions).
(d) Cause or permit or (ii) agree or consent to cause
or permit in the future (upon the happening of a contingency
or otherwise), any of its equity interests in any Subsidiary
to be subject to any Lien (including any Permitted Lien).
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7.3 Sales and Leasebacks. Sell or transfer any of their
property and become, directly or indirectly, liable as the lessee under
a lease of such property (other than such transactions between the
Subsidiaries and transfers of capital equipment that will be leased
pursuant to Financing Leases).
7.4 Indebtedness. Create, incur or assume any Indebtedness
other than:
(1) Indebtedness to the Lender pursuant to this
Agreement and Indebtedness pursuant to the Credit Agreement;
(2) Financing Lease Obligations, not to exceed
$10,000,000 in the aggregate at any one time outstanding;
(3) Endorsements for collection, deposit or
negotiation and warranties of products or services, in each
case incurred in the ordinary course of business;
(4) Subordinated Debt:
(5) Indebtedness of the Borrower owing to
Subsidiaries not otherwise permitted by this Section 7.4 in an
aggregate principal amount at any time outstanding not to
exceed $5,000,000;
(6) Indebtedness of Subsidiaries owing to the
Borrower not otherwise permitted by this Section 7.4 in an
aggregate principal amount at any time outstanding not to
exceed $5,000,000;
(7) Indebtedness of any wholly-owned Subsidiary owing
to any other wholly-owned Subsidiary;
(8) Guarantees by Material Subsidiaries of the
Obligations;
(9) Indebtedness with respect to Investments
permitted by Section 7.6(3) so long as such entities remain
Subsidiaries or Affiliates of the Borrower; and
(10) Indebtedness not included above and listed on
the Disclosure Schedule.
7.5 Dividends and Distributions. Declare or pay, directly or
indirectly, any dividend (other than a dividend payable solely in the
Common Stock of the Borrower) or make any other distribution (by
reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, with respect to any shares of its
capital stock or, directly or indirectly, except to the extent
permitted by Section 6.2 hereof, redeem, purchase, retire or otherwise
acquire for value any shares of any class of its capital stock or set
aside any amount for any such
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purpose; provided, however, that any Subsidiary of the Borrower may
declare and pay dividends or make other distributions to the Borrower.
7.6 Investments. Except as permitted by Section 7.1, make or
maintain any investments, made in cash or by delivery of property or
assets, (a) in any Person, whether by acquisition of capital stock,
Indebtedness, or other obligations or securities, or by loan or capital
contribution, or otherwise, or (b) in any property, whether real or
personal, (items (a) and (b) being herein called "Investments") except
the following (but only with funds other than proceeds of Advances):
(1) Investments in direct obligations of, or
guaranteed by, the United States government, its agencies or
any public instrumentality thereof and backed by the full
faith and credit of the United States government with
maturities not to exceed (or an unconditional right to compel
purchase within) three years from the date of acquisition;
(2) Repurchase agreements collateralized by
securities of the U.S. Government and U.S. Government-
sponsored securities;
(3) Investments in or to any Subsidiary or other
Affiliate, provided Borrower remains in compliance with
Section 7.1(b);
(4) Investments and obligations issued by the United
States government, any agency thereof, any state of the United
States or any political subdivision of any such state or any
public instrumentality thereof with maturities not to exceed
(or an unconditional right to compel purchase within) three
years from the date of acquisition that are rated AA- or
higher by at least one nationally recognized rating agency;
(5) Investments and obligations issued by any company
(other than a bank) with maturities not to exceed three years
from the date of acquisition with a long-term debt rating of A
or higher or a short-term debt rating of A1 or P1 by at least
one nationally recognized rating agency;
(6) Investments in demand and time deposits with,
Eurodollar deposits with, certificates of deposit issued by,
or obligations or securities fully backed by letters of credit
issued by (x) any bank organized under the laws of the United
States, any state thereof, the District of Columbia or Canada
having combined capital and surplus aggregating at least
$500,000,000, or (y) any
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other bank organized under the laws of a state that is a
member of the European Economic Community (or any political
subdivision thereof), Japan, the Cayman Islands, or British
West Indies having as of any date of determination combined
capital and surplus of not less than $500,000,000 or the
equivalent thereof (determined in accordance with generally
accepted accounting principles);
(7) Shares of money market mutual funds registered
under the Investment Company Act of 1940, as amended;
(8) Foreign currency swaps and hedging arrangements
entered into in the ordinary course of business to protect
against currency losses, and interest rate swaps and caps
entered into in the ordinary course of business to protect
against interest rate exposure on Indebtedness bearing
interest at a variable rate;
(9) Investments in mutual funds (other than money
market mutual funds and short term bond funds with individual
maturities under three years and aggregate ratings of A- or A3
or higher by at least one nationally recognized rating agency)
that in the aggregate shall not exceed $5,000,000;
(10) Investments in the form of advances to employees
in the ordinary course of business for moving, entertainment,
travel and other similar expenses, but not more than
$1,000,000 in the aggregate outstanding at any time; and
(11) Other Investments existing on the Closing Date
and listed on the Disclosure Schedule.
7.7 Transactions with Affiliates. Enter into any transaction
(including the purchase, sale or exchange of property or the rendering
of any service) with any Affiliate except upon fair and reasonable
terms that are at least as favorable to the Borrower or the Subsidiary
as would be obtained in a comparable arm's-length transaction with a
non-Affiliate.
7.8 ERISA Compliance. Permit any employee pension benefit plan
(as such term is defined in Section 3 of ERISA) maintained by the
Borrower or any of its Subsidiaries or in which employees of the
Borrower or any of its Subsidiaries is entitled to participate to:
(a) engage in any "prohibited transaction" as
such term is defined in Section 4975 of the
Internal Revenue Code of 1986, as amended,
or described in Section 406 of ERISA;
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(b) incur any "accumulated funding deficiency"
as such term is defined in Section 302 of
ERISA, whether or not waived; or
(c) terminate under circumstances that could
result in the imposition of a Lien on the
property of the Borrower or any Subsidiary
of the Borrower pursuant to Section 4068 of
ERISA.
7.9 Tangible Net Worth Test. Permit the Consolidated Tangible
Net Worth as of the end of each fiscal quarter of the Borrower to be
less than the sum of (i) $292,000,000, plus (ii) 80% of Consolidated
Net Income (excluding losses), plus (iii) the net proceeds of any
equity securities sold by the Borrower after June 30, 2001, for each
consecutive fiscal quarter of the Borrower beginning with the quarter
ending September 30, 2001, on a cumulative basis.
7.10 Total Liabilities-to-Tangible Net Worth Ratio. Permit the
ratio ("Total Liabilities-to-Tangible Net Worth Ratio") of the
Consolidated Total Liabilities as of the end of each fiscal quarter of
the Borrower beginning with the fiscal quarter ending September 30,
2001 to its Consolidated Tangible Net Worth as of the end of each
fiscal quarter of the Borrower beginning with the fiscal quarter
ending September 30, 2001 to exceed 1 to 1.
7.11 Quick Ratio. Permit the ratio (the "Quick Ratio") of (i)
Consolidated Quick Assets to (ii) Consolidated Current Liabilities to
be less than 2.25 to 1.00.
7.12 Capital Expenditures. Make capital expenditures that in
the aggregate and on a consolidated basis exceed during each fiscal
quarter of the Borrower the sum of $7,000,000 plus the amount by which
such expenditures during the immediately preceding quarter, beginning
with the quarter ended September 30, 2001, were less than $7,000,000.
7.13 Contracts Prohibiting Compliance with Agreement. Enter
into any contract or other agreement that would prohibit or in any way
restrict the ability of the Borrower to comply with any provision of
this Agreement.
(G) Article VIII of the Loan Agreement is hereby amended by the
replacement of existing subsections 8.1(c), (d) (e), (f) and (m) with the
following:
(c) A final judgment or settlement for in
excess of $3,000,000 shall be rendered against or agreed to by
the
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Borrower or any of its Subsidiaries for the payment of money
that, after deducting the amount of any insurance proceeds
paid or payable to or on behalf of the Borrower or its
Subsidiary in connection with such judgment or settlement, as
the case may be, is in excess of $3,000,000, and such judgment
shall remain undischarged for a period of thirty (30) days,
during which period execution shall not effectively be stayed,
or such settlement shall remain unpaid for a period of thirty
days after the agreed payment date unless such delay has been
agreed to by the other party. If a dispute exists with respect
to the liability of any insurance underwriter under any
insurance policy of the Borrower or its Subsidiary, no
deduction under this subsection shall be made for the
insurance proceeds that are the subject of such dispute;
(d) The Borrower or any Subsidiary (except to
the extent explicitly permitted by this Agreement), shall (1)
voluntarily terminate operations or apply for or consent to
the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of such Person or
of all or a substantial part of the assets of such Person, (2)
admit in writing its inability, or be generally unable, to pay
its debts as the debts become due, (3) make a general
assignment for the benefit of its creditors, (4) commence a
voluntary case under the Federal Bankruptcy Code (as now or
hereafter in effect), (5) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of
debts, (6) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against
it in an involuntary case under the Federal Bankruptcy Code or
applicable state bankruptcy laws or (7) take any corporate
action for the purpose of effecting any of the foregoing;
(e) Without its application, approval or
consent, a proceeding shall be commenced, in any court of
competent jurisdiction, seeking in respect of the Borrower or
any domestic Subsidiary: the liquidation, reorganization,
dissolution, winding-up, or composition or readjustment of
debt, the appointment of a trustee, receiver, liquidator or
the like of such Person or of all or any substantial part of
the assets of such Person, or other like relief in respect of
such Person under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of
debts; and, if the proceeding is being contested in good faith
by such Person, the same shall continue undismissed, or
unstayed and in effect for any period of 45 consecutive days,
or an order for relief against such Person shall be
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entered in any case under the Bankruptcy Code or applicable
state bankruptcy laws;
(f) Any foreclosure or other proceedings
shall be commenced to enforce, execute or realize upon any
lien, encumbrance, attachment, trustee process, mortgage or
security interest for payment of an amount in excess of
$500,000 against the Borrower or any Subsidiary;
(m) There shall occur a Change in Control;
Section 2. Representations and Warranties. The Borrower hereby
represents and warrants as follows:
(a) The execution and delivery of this Amendment and the
performance of this Amendment, the Loan Agreement as amended hereby and each of
the other Loan Documents, and the transactions contemplated hereby and thereby,
have been authorized by all necessary corporate actions of the Borrower. This
Amendment, the Loan Agreement as amended hereby and each of the other Loan
Documents constitute the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms.
(b) The Borrower has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Amendment,
the Loan Agreement as amended hereby and each of the other Loan Documents.
Neither the authorization, execution, delivery or performance by the Borrower of
this Amendment nor the performance of the Loan Agreement as amended hereby or
any other Loan Document nor the performance of the transactions contemplated
hereby or thereby violates or will violate any provision of the corporate
charter or by-laws of the Borrower, or does or will, with the passage of time or
the giving of notice or both, result in a breach of or a default under, or
require any consent under or result in the creation of any lien, charge or
encumbrance upon any property or assets of the Borrower pursuant to, any
material instrument, agreement or other document to which the Borrower is a
party or by which the Borrower or any of its properties may be bound or
affected.
(c) The execution and delivery by the Borrower of this
Amendment and the performance by the Borrower of the Loan Agreement as amended
hereby and the Loan Documents do not and will not violate any provision of law
or regulation applicable to the Borrower, or any writ, order or decree of any
court or governmental or regulatory authority or agency applicable to the
Borrower.
(d) The representations and warranties contained in Article IV
of the Loan Agreement are true and correct, and the Borrower and its
Subsidiaries are in compliance with all covenants set forth in Article VII of
the Loan Agreement, provided that for this purpose that all references to the
"Disclosure Schedule" in such Articles IV and VII shall be deemed to mean the
Disclosure Schedule attached hereto, which is true and complete.
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Section 3. Loan Documents. This Amendment shall be a Loan Document for
all purposes.
Section 4. Conditions to Effectiveness. The effectiveness of this
Amendment is conditioned on the following:
(a) The Borrower and the Lender shall each have executed and
delivered a counterpart of this Amendment;
(b) The representations and warranties contained in Article IV
of the Loan Agreement shall be true and correct in all material respects as of
the date hereof as though made on and as of the date hereof;
(c) No Default or Event of Default under the Loan Agreement
shall have occurred and be continuing;
(d) The conditions set forth in Sections 5.2-5.5 of the Loan
Agreement shall have been met as of the date hereof, provided that for purposes
thereof and Section 4.5 of the Loan Agreement, the "Balance Sheet Date" shall
mean June 30, 2001 and the financial statements referred to therein shall mean
the unaudited statements for the period ended June 30, 2001, that have been
furnished to the Lender.
(e) The Lender shall have received a certificate of the clerk
of the Borrower as to the votes of Borrower's directors authorizing the
execution and delivery of this Amendment and the incumbency of the officers
authorized to execute this Amendment on behalf of the Borrower and a certificate
of the secretary of each of the Guarantors as to the votes of such Guarantor's
directors authorizing the execution and delivery of the Guaranty and the
incumbency of the officers authorized to execute the Guaranty on behalf of such
Guarantor.
Section 5. Miscellaneous.
(a) On and after the date hereof, each reference in the Loan
Agreement to "this Agreement" or words of like import shall mean and be deemed
to be a reference to the Loan Agreement as amended hereby.
(b) Except as amended and modified hereby, the Loan Agreement
is in all respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.
(c) This Amendment and the modifications to the Loan Agreement
set forth herein shall be deemed to be a document executed under seal and shall
be governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.
(d) This Amendment may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same document.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed as of the date and the year first above written.
MKS INSTRUMENTS, INC.
By: /s/ Xxxxxxx X Xxxxxx
---------------------------
Title: Treasurer
FLEET NATIONAL BANK
By: /s/ Xxxxxx X. Head Jr.
---------------------------
Title: Director
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