RF POWER PRODUCTS, INC.
----------------------------------------
____________________________("Borrower")
has requested Mellon Bank, N.A.
---------------
__________________("Bank") to make loans (the "Loans") to Borrower from time
to time during the period set forth below (the "Commitment Period") in an
aggregate principal amount outstanding at any one time not to exceed Bank's
commitment set forth below (the "Commitment Amount") and, subject to the terms
and conditions set forth herein and in the Note and other Credit Documents
(hereinafter defined) and, relying upon the representations and warranties
herein and therein set forth, Bank is willing to make such Loans.
Commitment From the date hereof to but not
Period:
including May , 1998.
------------------ --
Commitment The lesser of (i) $ 4,000,000.00
Amount: ----------------,
or (ii) the sum of 80 % of Eligible
----
Accounts (as hereinafter defined)
and N/A % of Eligible Inventory
-----
(as hereinafter defined).
Within the limits of time and amount set forth above and subject to the terms
and conditions set forth herein and in the Note and the other Credit Documents,
Borrower may borrow, repay and reborrow hereunder. Borrower may at any time
from time to time reduce the Commitment Amount to an amount not less than the
sum of the unpaid principal amount of the Loans then outstanding plus the
principal amount of all Loans not yet made as to which notice has been given by
Borrower under Section 2 hereof, by providing not less than five days' prior
written notice (which notice shall be irrevocable) to such effect to Bank. If
Bank allows Loans above Commitment Amount, all the terms and conditions set
forth herein and in the Note and the other Credit Documents will apply to such
Loans.
The obligation of Borrower to repay the Loans, to pay interest thereon and pay
fees, if any, with respect to the Commitment Amount shall be evidenced by one or
more promissory notes, note and security agreements, letter of credit
applications, of other instruments or documents (collectively, the "Note"),
which together with this Agreement, including any Supplement hereto, and any
security agreements, instruments and other documents executed by Borrower in
connection herewith are sometimes referred to herein as the "Credit Documents".
In consideration of the foregoing and intending to be legally bound, Xxxxxxxx
agrees with Bank as follows:
1. Representations and Warranties. In addition to the representations and
warranties contained in the Note and any other Credit Documents, Borrower hereby
makes the following representations and warranties which shall be true and
correct on the date hereof and shall continue to be true and correct at the time
of the creation of any of the Loans and until the Loans shall have been paid in
full, or of there are no Loans outstanding so long as the Commitment Period has
not expired:
(a) Organization-Corporation and Partnership. If Borrower is a corporation
or a partnership, Borrower is duly organized, validly existing, and in good
standing under the laws of the jurisdiction in which Borrower is incorporated or
was formed; Borrower has the power and authority to own its properties and
assets, to carry on its businesses as now being conducted and is qualified to do
business in every jurisdiction in which it is required to qualify to do
business.
(b) Validity and Binding Nature. Xxxxxxxx has the power to execute,
deliver, and perform this Agreement, the Note and all other Credit Documents,
and when executed and delivered, this Agreement, the Note and all other Credit
Documents will be valid and binding obligations of Borrower, enforceable in
accordance with their terms; provided, however, that this representation with
respect to enforceability is limited by bankruptcy, insolvency, or other laws of
general application relating to or affecting the enforcement of creditors'
rights.
(c) Due Authorization-Corporation and Partnership. The execution, delivery
and performance of this Agreement, the Note and all other Credit Documents have
been duly authorized by all corporate or partnership action required for the
lawful creation and issuance and performance thereof and will not violate any
provision of law, any order of any court or governmental agency, the charter
documents and by-laws of, or partnership agreement of Borrower.
(d) Conflicting Instruments. The execution, delivery and performance of
this Agreement, the Note and all other Credit Documents will not violate any
provisions of any indenture, agreement, or other instrument to which Borrower or
any of Borrower's properties or assets are bound, and will not be in conflict
with, result in a breach of, or constitute (with due notice and/or lapse of
time) a default under any such indenture, agreement, or other instrument, or
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of Borrower.
(e) Authorization and Consents. No authorization, consent, approval,
license or exemption of, and no registration, qualification, designation,
declaration or filing with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, is necessary to
the valid execution, delivery and performance of this Agreement, the Note or any
other Credit Document.
(f) Financial Condition. The most recent financial statements of Xxxxxxxx
delivered to the Bank are true and correct and represent fairly its financial
position as of the date thereof; and the results of its operations for the
period or periods indicated; and as required by GAAP, show all known
liabilities, direct or contingent, of Borrower as of the date thereof. Since the
date of such financial statements, there has been no material adverse change in
the condition, financial or otherwise, of Borrower or in the operations,
business, prospects or properties of Borrower and, since such date, Borrower has
not incurred, other than in the ordinary course of business, any indebtedness,
liabilities, obligations or commitments, contingent or otherwise, other than
indebtedness created hereunder.
(g) Compliance with Laws. Neither the Borrower nor any subsidiary is in
violation of or subject to any contingent liability on account of any law or any
order or regulation issued by any court or governmental authority, state or
federal, including but not limited to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), the Internal Revenue Code of 1986, as
amended (the "Code"), any applicable occupational and health or safety law,
environmental protection or pollution control law or hazardous waste or toxic
substances management, handling or disposal law which would have an adverse
effect on the Borrower in excess of $100,000.
(h) Litigation. Except as previously disclosed in writing to Bank prior to
the date of this Agreement, there is no action, suit or proceeding at law or in
equity or by or before any governmental instrumentality or other agency now
pending, or to the knowledge of Borrower, threatened by or against or affecting
Borrower or any of the properties or rights of Borrower which, if adversely
determined, would impair the right of Borrower to carry on its business
substantially as now conducted or would adversely affect the financial
condition, business or operations of Borrower in an amount in excess of
$100,000.
(i) Misrepresentation. Neither this Agreement, the Note, the other Credit
Documents, nor any other document, statement, financial statement, or
certificate furnished to Bank by or on behalf of Borrower in connection
herewith, contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained therein not misleading
and, insofar as Borrower can now foresee, there is no event or condition which
may in the future materially adversely affect the financial condition,
operations or properties of Borrower which has not been set forth in this
Agreement or in a document, statement, financial statement, or certificate
furnished to Bank in connection herewith.
2. Conditions. The obligation of Bank to make any Loan hereunder is subject to
the performance by Borrower of its obligations to be performed hereunder and
under the Note and the other Credit Documents on or before the date of
--------------------------------------------------------------------------------
such Loan and to the satisfaction of the following further conditions:
(a) The representations and warranties contained herein, in the Note and
in the other Credit Documents shall be true on and as of the date of each
Loan hereunder with the same effect as though made on and as of each such
date; on each such date no "Event of Default" under and as defined in the
Note and no event, act or condition which with notice or the passage of
time or both would constitute such an Event of Default shall have occurred
and be continuing or exist or shall occur or exist after giving effect to
the Loan to be made on such date; and any request for borrowing under
Section 2.(b) below shall constitute a certification by Borrower to both
such effects.
(b) Borrower shall have provided Bank with written notice (or telephonic
notice confirmed in writing) of the proposed Loan specifying the principal
amount thereof and the proposed date thereof, which notice shall be
received by Bank at its designated office no later than 1:00 p.m., local
time at the place where the proposed Loan is to be payable, on the date
(which shall be a day on which Bank is opened for business) of such
proposed Loan. Such notice shall contain a certification as to the amounts
of the then current Eligible Accounts and Eligible Inventory. In the event
Bank receives telephonic notice, Bank may act in reliance upon such
telephonic notice, provided Xxxx has acted in good faith.
(c) The conditions, if any, specified in any Supplement hereto and in the
Note or any Credit Document shall have been met to the satisfaction of
Bank.
(d) All legal details and proceedings in connection with the transactions
contemplated by this Agreement shall be satisfactory to Bank and Bank shall
have received all such counterpart originals or certified or other copies
of such documents and records of proceedings in connection with such
transactions, in form and substance satisfactory to Bank, as Bank may from
time to time request.
3. General Covenants. In addition to the covenants contained in the Note and
the other Credit Documents, Borrower hereby covenants and agrees that, so long
as any of the Loans are outstanding, or if there are no Loans outstanding so
long as the Commitment Period has not expired, Borrower shall, except as Bank
may otherwise agree in writing:
(a) Financial Statements-Annual. Furnish to Bank, within
-----------------
days after the end of each fiscal year of Borrower, a financial statement
of Borrower's profit and loss and surplus for such fiscal year and a
balance sheet as of the end of such fiscal year, in each case setting forth
in comparative form the corresponding figures for the preceding fiscal
year, all in reasonable detail and
----------------------------------------
See Supplement to Revolving Line of Credit Agreement
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---------------------------------------------------------------------------
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(b) Accounts Receivable and Inventory Reporting. Furnish to Bank, on or
before the day of each calendar month, a report, as at the end of the
------
preceding calendar month, containing Borrower's account receivable aging
and a description of raw material and finished goods inventory, including a
listing of Eligible Accounts and Eligible Inventory, all in reasonable
detail and in form and content satisfactory to Bank.
(c) Financial Statements-Other. Furnish to Bank each financial statement
required to be delivered to Bank by any supplement, addendum or amendment
hereto, and such other information concerning the financial or business
affairs of Borrower as may be requested by Bank from time to time.
(d) Property. Maintain and keep all its property in good repair, working
order and condition and make or cause to be made all necessary or
appropriate repairs, renewals, replacements, substitutions, additions,
betterments and improvements thereto so that the efficiency of all such
properties shall at all times be properly preserved and maintained.
(e) Taxes and Assessments. Duly pay and discharge all taxes, assessments
and governmental charges levied upon or assessed against it or against its
properties or income prior to the date on which penalties are attached
thereto, unless and except to the extent only that such taxes, assessments
and charges shall be contested in good faith and by appropriate proceedings
diligently conducted by Borrower (unless and until foreclosure, distraint,
sale or other similar proceedings shall have been commenced) and provided
that such reserve or their appropriate provisions, if any, as shall be
required by generally accepted accounting principles shall have been made
therefor.
(f) Litigation. Promptly give notice in writing to Bank of the occurrence
of any material litigation, arbitration or governmental proceeding
affecting Borrower, and of any governmental investigation or labor dispute
pending or, to the knowledge of Borrower, threatened which could reasonably
be expected to interfere substantially with normal operations of the
business of Borrower or materially adversely, affect the financial
condition, business, or operations of Borrower.
(g) Books and Records. Maintain and keep proper records and books of
account in conformance with generally accepted accounting principles
applied on a consistent basis in which full, true and correct entries shall
be made of all its dealings and business affairs.
(h) Access to Properties, Books and Records. Permit any of the officers,
employees or representatives of Bank to visit and inspect any of the
properties of Borrower and to examine its books and records and discuss the
affairs, finances and accounts of Borrower with representatives thereof,
during normal business hours, and as often as Bank may request.
(i) Financial Information-Guarantors. Cause any third party guarantor of
the Loans to submit annually or at any time there is a material change in
their financial position, personal or business financial statements
containing such financial information as may be requested by Bank from time
to time.
(k) Continuance of Business. Not engage in any line of business other than
those in which it is actively engaged in on the date hereof.
(l) Compliance with Laws. Comply, and shall cause any subsidiary to
comply, with all laws, and all regulations or orders issued pursuant
thereto, including but not limited to ERISA, the Code, any applicable
occupational, and health or safety law, environmental protection or
pollution control law or hazardous waste or toxic substances management,
handling or disposal law.
(m) Sale of Assets. Except for sales or other dispositions of inventory in
the ordinary course of business, not sell, lease, transfer, or otherwise
dispose of in a single transaction, or a series of related transactions,
all or a substantial part of the property and assets of Borrower, whether
now owned or hereafter acquired, to any person, firm or corporation.
(n) Acquisition of Assets. Not purchase or otherwise acquire all or
substantially all of the operating assets of any other person, firm or
corporation and, if Borrower is a corporation, not merge or consolidate
with or into any other person, firm or corporation, or permit any other
person, firm or corporation to merge with or into it, or acquire all or
substantially all of the property or assets of any other person, firm or
corporation.
(o) Selling Accounts Receivable. Not sell, assign or discount any of its
accounts receivable or any promissory note held by it, with or without
recourse, other than the discount of such receivables or notes in the
ordinary course of business for collection.
(p) Payments on Outstanding Stock. Pursuant to or in contemplation of
termination, liquidation, dissolution or winding up of Borrower, not
purchase, redeem or retire or make any dividend on or distribution on account
of, if Borrower is a corporation, any shares of the capital stock of Borrower
or if Borrower is a partnership, any capital account of any partner of such
partnership.
(q) Affiliated Entities. Not establish any partnership, subsidiary,
corporation, joint venture or other form of business combination without
providing prior written notice to Bank.
(r) Insurance. Keep all insurable property, real and personal, now owned or
hereafter acquired, insured at all times against loss or damage by fire and
extended coverage risks and other hazards of the kinds customarily insured
against and in amounts customarily carried by businesses engaged in
comparable businesses and comparably situated; effect all such insurance
under valid and enforceable policies issued by insurers of recognized
responsibility not unacceptable to Bank, and, promptly from time to time upon
request of Bank, deliver to Bank a summary schedule indicating all insurance
then in effect.
(s) Investments. Not purchase, own, invest in or otherwise acquire, directly
or indirectly, any stock or other securities, or make or permit to exist any
investment or capital contribution or acquire any interest whatsoever in any
other person , firm or corporation or permit to exist any loans or advances
for such purposes except for investments in direct obligations of the United
States of America or any agency thereof, obligations guaranteed by the United
States of America, certificates of deposit issued by a bank or trust company,
organized under the laws of the United States, or any state thereof, or
marketable securities which are publicly traded on a nationally recognized
market.
(t) Patents. Preserve and protect its patents, franchises, licenses,
trademarks, trademark rights, tradenames, tradename rights, and copyrights
used or useful in the conduct of its business.
(u) Guarantees and Contingencies. Not endorse, assume, guarantee, become
surety for, or otherwise become or remain liable in connection with the
obligations of any person, firm or corporation, except Borrower may endorse
negotiable or other instruments for deposit or collection or similar
transactions in the ordinary course of its business.
(v) Transactions with Affiliates. Not enter into any transaction, including,
without limitation, the purchase, sale, leasing or exchange of property, real
or personal, or the rendering of any service, with any person, firm or
corporation affiliated with Borrower, except in the ordinary course of and
pursuant to the reasonable requirements of Borrower's business and upon fair
and reasonable terms no less favorable to Borrower than would be obtained in
a comparable arm's-length transaction with any other person, firm or
corporation not affiliated with Borrower.
(w) Modifications to Other Agreements. Not amend or modify any existing
agreement with any person, firm or corporation in any manner materially
adverse to Borrower.
(x) Notice of Event of Default. Promptly give notice in writing to Bank of
the occurrence of any Event of Default under and as defined in the Note, and
of any condition, event, act or omission which, with the giving of notice
of the lapse of time or both, would constitute such an Event of Default.
4. General Provisions.
(a) Waivers. The provisions of this Agreement may from time to time be waived
in writing by Bank in its sole discretion. Any such waiver of any kind on the
part of Bank of any breach or default under this Agreement or any waiver of
any provision or condition of this Agreement must be in writing and shall be
effective only to the extent set forth in such writing. No delay by Bank in
exercising any right or remedy hereunder shall operate as a waiver thereof.
(b) Financial Covenants. Compliance or non-compliance with all financial
covenants of Borrower contained herein, or in any supplement, addendum or
amendment hereto, shall be determined in accordance with generally accepted
accounting principles applied on a consistent basis. All financial statements
of Borrower required to be delivered to Bank hereby, or by any written
supplement now or hereafter executed by Borrower in which reference to this
Agreement is made, shall be prepared on the basis of generally accepted
accounting principles applied on a consistent basis.
(c) Binding Nature. The rights and privileges of Bank contained in this
Agreement shall inure to the benefit of its successors and assigns, and the
duties of Borrower shall bind all heirs, personal representatives,
successors, and assigns. "Borrower" refers individually and collectively to
all signers of this Agreement, including, in the case of any partnership, all
general partners of such partnership individually and collectively, whether
or not such partners sign below. Each of the signers shall be jointly and
severally bound by the terms hereof, and with respect to any partnership
executing this Agreement, each general partner shall be bound hereby both in
such general partner's individual and partnership capacities.
(d) Governing Law. Time of performance hereunder is of the essence of this
Agreement. This Agreement and any written supplement hereto executed by
Borrower in which reference to this Agreement is made shall in all respects
be governed by the laws of the state where the Note is payable (except to the
extent that federal law governs).
(e) Severability. If any provision hereof shall for any reason be held
invalid or unenforceable, no other provision shall be affected thereby, and
this Agreement shall be construed as if the invalid or unenforceable
provision had never been a part of it. The descriptive headings hereof are
for convenience only and shall not in any way affect the meaning or
construction of any provision hereof.
(f) Definitions. i) "Eligible Accounts" shall be defined as trade accounts
receivable created or acquired by Borrower in the ordinary
course of business which are and at all times continue to be
acceptable to Bank and in which Bank has a Prior Security
Interest at all times. Standards of acceptability shall be
fixed and may be revised from time to time solely by Bank in
its exclusive judgment. As of the date hereof, accounts
receivable aged less than 90 days from the date of invoice
shall be acceptable as Eligible Accounts.
ii) "Eligible Inventory" shall be defined as Borrower's
inventory excluding work in process, of saleable raw
materials and finished goods manufactured or acquired by
Borrower in the ordinary course of business, in its sole
possession or control, stored in a location or locations and
in a manner acceptable to Bank, valued at the lower cost or
market value, which inventory is an at all times continues
to be acceptable to Bank and in which Bank has a Prior
Security Interest at all times. Standards of acceptability
shall be fixed and may be revised from time to time solely
by Bank in its exclusive judgment.
iii) "Prior Security Interest" shall be defined as an
enforceable, perfected security interest (under the Uniform
Commercial Code), which interest is senior and prior to all
liens (including without limitation all security interests,
pledges, bailments, leases, mortgages, conditional sales and
title retention agreements, charges, claim encumbrances,
judgments, levies and all other types of liens whatsoever.
5. Loans Above Commitment Amount. Notwithstanding any other provision of this
Agreement, the Note or the other Credit Documents, if, in Bank's sole
determination, the principal balance of the Loans hereunder shall at any time
exceed the Commitment Amount, Borrower shall pay such excess to Bank on
demand.
--------------------------------------------------------------------------------
6. Special Covenants. In addition to the covenants contained herein and in the
Note and the other Credit Documents, Borrower hereby agrees that, so long as any
of the Loans are outstanding, or if there are no Loans outstanding so long as
the Commitment Period has not expired, Borrower shall, except as Bank may grant
its prior written consent, comply with the special provisions or covenants set
forth in any written supplement, now or hereafter executed by Borrower, in which
reference to this Agreement is made.
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Signatures
--------------------------------------------------------------------------------
Witness the due execution hereof intending to be legally bound this 24th day of
May, 1996.
--------------------------------------------------------------------------------
Witness: Individual:
x x (Seal)
------------------------------------- -------------------------------------
Address
------------------------------------- -------------------------------------
Witness Individual:
x x (Seal)
------------------------------------- -------------------------------------
Address
-------------------------------------
Corporation or Other Entity
RF POWER PRODUCTS, INC.
------------------------------------- -------------------------------------
Attest/Witness: By: (Signature and Title)
Xxxxxxx Xxxxxx, CFO
x x /s/ Xxxxxxx Xxxxxx - VP+CFO (Seal)
------------------------------------- -------------------------------------
By: (Signature and Title)
x (Seal)
-------------------------------------
Business Address
(Corporate Seal) 000 Xxxxxxxxx-Xxxxxxx Xxxx
-------------------------------------
Voorhees, NJ 08043
MELLON BANK N.A.
--------------------------
-------------------------------------
By: (Signature and Title)
Xxxxxxx X. XxXxxxx, V.P.
x /s/ Xxxxxxx X. XxXxxxx
-------------------------------------
Office Address
Plymouth Meeting Executive Campus
-------------------------------------
000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
SUPPLEMENT TO REVOLVING LINE OF CREDIT AGREEMENT
------------------------------------------------
The following constitutes the special provisions and/or special covenants
and/or modifications referred to in the Revolving Line of Credit Agreement dated
May 24th, 1996 (the "Credit Agreement") covering the Borrowings (as that term is
defined in the Credit Agreement) of the undersigned (the "Borrower") from Mellon
Bank, N.A. ("Bank"). The following shall supercede any special provision or
covenant contained in any prior Supplement to Revolving Line of Credit Agreement
and shall be applicable to all Borrowings in existence on the date hereof or
incurred hereafter.
1. The provisions of this Supplement shall, as of the date hereof, be
deemed to be fully incorporated by reference in, constitute a part of, and
supplement the provisions of, the Credit Agreement, which, except as
supplemented hereby, shall continue in full force and effect in accordance with
its terms and conditions.
2. The Borrower hereby covenants and decrees that, so long as any
Borrowings are outstanding, the Borrower shall, except as Bank may grant its
prior written consent:
(a) Financial Statements-Annual. Furnish to Bank, within ninety
---------------------------
(90) days after the end of each fiscal year of the Borrower, the annual
consolidated financial statements of the Borrower, audited and certified without
material qualification by an independent certified public accountant acceptable
to Bank.
(b) Financial Statements-Quarterly. Furnish to Bank, within
------------------------------
forty-five (45) days after the end of each quarter of each fiscal year of the
Borrower, a statement of the Borrower's profit and loss, a statement of cash
flow and a balance sheet as of the end of such period, in each case setting
forth in comparative form the corresponding figures from the corresponding
period of the preceding fiscal year and comparative year-to-date presentations,
all in reasonable detail and in a form acceptable to Bank, and prepared on an
unaudited basis.
(c) Borrowing Base. Furnish to Bank, within fifteen (15) days after
--------------
the end of each month of the Borrower, an accounts receivable aging and a
borrowing base certificate, each in reasonable detail and in a form acceptable
to Bank.
(d) Compliance Certificate. Together with the quarterly and annual
----------------------
financial statements, furnish to Bank an Officer's Compliance Certificate,
signed by the Chief Financial Officer of the Borrower, certifying that no
default or Event of Default has occurred as of the date of such certificate and
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the applicable requirements of the
financial covenants hereof, on the date of such financial statement.
(e) Certain Other Reports and Information. Promptly upon their
-------------------------------------
becoming available to the Borrower, the Borrower shall deliver to Bank a copy
of (i) all regular or special reports, registration statements and amendments to
the foregoing which the Borrower shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange, (ii) all
reports, proxy statements, financial statements and other information
distributed by the Borrower to its stockholders, bondholders or the financial
community generally, and (iii) all accountants' management letters pertaining
to, all other reports submitted by accountants in connection with any audit of,
and all other material reports from outside accountants with respect to, the
Borrower.
(f) Negative Pledge. Not incur, create, assume or permit to exist,
---------------
any mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever
on any of the assets of the Borrower, whether now or hereafter owned, other than
(i) security interests granted in favor of Bank, (ii) pledges or deposits under
workers' compensation, unemployment insurance and social security laws, or to
secure the performance of bids, tenders, contracts (other than for the repayment
of borrowed money) or leases or to secure statutory obligations or surety or
other similar bonds used in the ordinary course of business, (iii) tax liens
which are being contested in good faith and by appropriate proceedings
diligently conducted (unless and until foreclosure, sale or other similar
proceedings have been commenced) and provided that such reserve or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made therefor, and (iv) any unfiled materialmen's, mechanic's, workmen's and
repairmen's liens (provided, that if such a lien shall be perfected, it shall
be discharged of record immediately by payment, bond or otherwise).
(g) Additional Indebtedness. Not create or incur any additional
-----------------------
indebtedness except loans from Bank and any term loans from the New Jersey
Economic Development Authority which in aggregate do not exceed $500,000.
(h) Financial Covenants. Comply with the following financial
-------------------
covenants which shall be tested on the Borrower on a quarterly basis and in
accordance with GAAP:
(i) Leverage Ratio. The Borrower's ratio of (a) total
--------------
liabilities, determined in accordance with GAAP, divided by (b) Tangible Net
----------
Worth, shall not exceed 1.25 to 1.00.
(ii) Cash Flow Ratio. The Borrower's ratio of (a) Cash Flow to
---------------
(b) current maturities on long term debt (including capitalized leases and as
determined in accordance with GAAP) which were reported on the balance sheet of
the Borrower for the period ending one year prior to the calculation date, plus
----
capital expenditures, as measured on a rolling four-quarter basis and as
determined in accordance with GAAP, shall not be less than 1.25 to 1.00 as
measured as of the fiscal quarters ending May 31, 1996,
-2-
August 31, 1996 and November 30, 1996, and shall not be less than 1.50 to 1.00
at any fiscal quarter end thereafter.
(i) Management. The Borrower shall retain capable executive
----------
management personnel at all times satisfactory to Bank, it being understood that
the management personnel of the Borrower as of the date hereof is satisfactory
to Bank.
3. Conditions to Initial Loans. The obligation of Bank to make loans on
---------------------------
the date hereof is subject to the satisfaction, immediately prior to or
concurrently with the making of any Borrowing, of the following conditions:
(a) All documentation, instruments, and proceedings shall be
satisfactory to Bank;
(b) No material adverse change shall have occurred in the business,
products or prospects of the Borrower;
(c) The Borrower shall provide Bank with evidence that the Borrower
has purchased and currently maintains policies of insurance, satisfactory to
Bank and designating Bank as the loss payee, to protect the personal property
pledged as collateral to Bank;
(d) No material adverse change shall have occurred in the financial
condition of the Borrower, as such financial condition was depicted in the
Borrower's financial statements dated November 30, 1995 and February 29, 1996.
(e) The Borrower will provide Bank with an option of counsel for the
Borrower regarding the execution, delivery, validity and enforceability of the
loan documents and the liens granted thereto.
4. Adoption of Certain Terms or Covenants. The Borrower shall give notice
--------------------------------------
in writing to Bank of the occurrence of any default under any debt instruments
or under any material contractual obligations or agreements with governmental
authorities, and of the incurrence of new or additional debt obligations and the
terms thereof, and of any change, whether by addition or modification in the
terms or covenants of any debt obligation. In the event that the terms or
covenants of any debt obligation of the Borrower existing on the date hereof or
incurred by the Borrower subsequent to the date hereof are more restrictive than
the terms and covenants of the Credit Agreement, such terms and covenants shall
be deemed to be incorporated into the Credit Agreement for the benefit of Bank
and shall be binding upon the Borrower and enforceable by Bank hereunder, at its
discretion, as if such more restrictive terms and conditions were herein fully
set forth.
5. Definitions. In addition to other words and terms defined elsewhere in
-----------
the Credit Agreement, as used herein, the following words and terms shall have
the following meanings:
-3-
(a) "Cash Flow" means net income minus dividends or withdrawals plus
--------- ----- ----
depreciation and amortization, as measured on a rolling four-quarter basis and
as determined in accordance with GAAP.
(b) "GAAP" means generally accepted accounting principals of the
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United States of America.
(c) "Tangible Net Worth" shall mean shareholders' equity less
------------------ ----
intangible assets, each determined in accordance with GAAP.
Witness the due execution hereof intending to be legally bound this 24th
----
day of May, 1996.
ATTEST: RF POWER PRODUCTS, INC.
/s/ Xxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------- --------------------------------
By: Xxxx X. Xxxx Xxxxxxx X. Xxxxxx
Title: Director Cost Accounting Chief Financial Officer
MELLON BANK, N.A.
Accepted by:
/s/ Xxxxxxx X. XxXxxxx
-----------------------------------
Xxxxxxx X. XxXxxxx
Vice President
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FIRST AMENDMENT TO REVOLVING LINE OF CREDIT AGREEMENT
-----------------------------------------------------
THIS FIRST AMENDMENT TO REVOLVING LINE OF CREDIT AGREEMENT (this
"Agreement") made as of this 17th day of January, 1997 between RF POWER
PRODUCTS, INC. a New Jersey corporation (the "Borrower"), and MELLON BANK, N.A.,
a national banking association (the "Bank").
W I T N E S S E T H:
WHEREAS, the Borrower and the Bank are parties to a Revolving Line of
Credit Agreement dated May 24th, 1996 (the "Credit Agreement"), pursuant to
which the Bank agreed to extend to the Borrower a Four Million Dollar
($4,000,000) revolving credit facility (capitalized terms used herein but not
defined in this Agreement shall have the meaning ascribed to them in the Credit
Agreement);
WHEREAS, the Borrower has requested that the Bank amend certain
provisions of the Credit Agreement in order to, among other things, gain
permission to obtain equipment financing in the amount of $500,000; and
WHEREAS, the Bank is willing to grant such request, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and intending to be legally bound, the Borrower and the Bank hereby
covenant and agree as follows:
1. Amendments. Upon the execution and delivery by the Borrower and
----------
the Bank of this Agreement and the First Amendment to Note and Security
Agreement dated of even date herewith, (the "Note Amendment"), the Credit
Agreement shall be amended as follows:
(a) The Supplement to Revolving Line of Credit Agreement (the
"Supplement") shall be amended by deleting Section 2(f) in its entirety and
replacing it with the following:
(f) Negative Pledge. Not incur, create, assume or permit to
---------------
exist, any mortgage, pledge, lien, charge or other encumbrance of any
nature whatsoever on any of the assets of the Borrower, whether now or
hereafter owned, other than (i) security interests granted in favor of
Bank, (ii) security interests granted in favor of the New Jersey
Economic Development Corporation to secure equipment purchases in an
amount not to exceed $500,000, (iii) pledges or deposits under workers'
compensation, unemployment insurance and social security laws, or to
secure the performance of bids, tenders, contracts (other than for the
repayment of borrowed money) or leases or to secure statutory
obligations or surety or other similar bonds used in the ordinary
course of business, (iv) tax liens which are being contested in good
faith and by appropriate proceedings diligently conducted (unless and until
foreclosure, sale or other similar proceedings have been commenced) and
provided that such reserve or other appropriate provisions, if any, as shall
be required by GAAP shall have been made therefor, and (v) any unfiled
materialmen's, mechanic's, workmen's and repairmen's liens (provided, that
if such a lien shall be perfected, it shall be discharged or record
immediately by payment, bond or otherwise).
(b) Section 2(h) of the Supplement, Financial Covenants, shall also be
--------- ---------
further amended by adding the following additional provision as Subsection
2(h)(iii):
(iii) Minimum Tangible Net Worth. The Tangible Net Worth of the
--------------------------
Borrower shall be greater than or equal to the following amounts as of the
following dates:
Fiscal Quarters Ending Tangible Net Worth
---------------------- ------------------
February 28, 1997 and $7,800,000
May 31, 1997
August 31, 1997 $8,000,000
November 30, 1997 $8,500,000
All times thereafter No requirement
(c) The Credit Agreement shall be amended to reflect that references in
the Credit Agreement to the "Note" shall be references to the Note and Security
Agreement as amended by the Note Amendment and as may be still further amended,
modified or supplemented from time to time.
2. One-Time Covenant Waiver. The Bank hereby agrees that it shall not
------------------------
measure the Cash Flow Ratio covenant set forth in Section 2(h)(ii) of the
Supplement for the fiscal quarters ending February 28, 1997, May 31, 1997,
August 31, 1997 or November 30, 1997. However, the Borrower specifically
acknowledges that the waiver of such covenant compliance represents a one-time
only, limited waiver and that the covenant shall be measured again beginning
with the fiscal quarter ending February 28, 1998, and shall not be less than
1.50 to 1.00 as of such date and as of each fiscal quarter thereafter.
3. Representations and Warranties. The Borrower hereby represents and
------------------------------
warrants to the Bank that the Borrower is not in default under the Note, the
Credit Agreement or any other document executed in connection therewith.
4. Other Terms Confirmed. All other terms and conditions of the Credit
---------------------
Agreement, including, without limitation, the Supplement attached thereto, are
hereby confirmed and shall remain in full force and effect without modification.
From and
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after the effectiveness of the amendments set forth in Section 1 hereof, all
references in any document or instrument to the Credit Agreement shall mean the
Credit Agreement as amended by this Agreement.
5. No New Indebtedness. The Borrower specifically acknowledges and
-------------------
agrees that this Agreement shall not represent in any way the extension of any
new credit by the Bank to the Borrower, or the satisfaction of any indebtedness
evidenced by the Credit Agreement as amended hereby or the Note.
6. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
7. Headings. The descriptive headings which are used in this Agreement
--------
are for convenience only and shall not affect the meaning of any provision of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
Attest: RF POWER PRODUCTS, INC.
[SIGNATURE APPEARS HERE] /s/ Xxxxxxx X. Xxxxxx
----------------------------- ------------------------------
Name: By: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
[Corporate Seal] MELLON BANK, N.A.
By: /s/ Xxxxxxx X. XxXxxxx
---------------------------
Xxxxxxx X. XxXxxxx
Vice President
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