SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
Commission file number 1-5560
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Alpha Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware 04-2302115
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 Sylvan Road, Woburn, Massachusetts 01801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 935-5150
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at January 28, 1996
Common Stock, par value $.25 per share 9,671,771
Alpha Industries, Inc. and Subsidiaries ----------------------------------------
Table of Contents
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Page
Part 1 Financial Information
Item 1 - Financial Statements
Consolidated Balance Sheets - December 31, 1995 and April 2, 1995.... 3
Consolidated Statements of Income - Quarters and Nine Months Ended
December 31, 1995 and January 1, 1995................................ 4
Consolidated Statements of Cash Flows - Nine Months Ended
December 31, 1995 and January 1, 1995................................ 5
Notes to Consolidated Financial Statements........................... 6
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................ 7
Part 2 Other Information
Item 1 - Legal Proceedings............................................. 9
Item 6 - Exhibits and Reports on Form 8-K.............................. 9
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Statement of Fair Presentation
The financial information included herein is unaudited. In addition, the
financial information does not include all disclosures required under generally
accepted accounting principles because certain note information included in the
Company's annual report to shareholders has been omitted and such information
should be read in conjunction with the prior year's annual report. However, the
financial information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods. The Company considers the
disclosures adequate to make the information presented not misleading.
2
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Consolidated Balance Sheets
(In thousands except share and per share amounts)
Dec. 31, April 2,
1995 1995
(unaudited) (audited)
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Assets
Current assets
Cash and cash equivalents at cost (approximates market).................. $21,247 $ 3,510
Accounts receivable...................................................... 16,522 13,548
Inventories (Note 1)..................................................... 11,834 9,370
Prepayments and other current assets..................................... 816 756
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Total current assets.................................................. 50,419 27,184
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Property, plant and equipment, less accumulated depreciation and
amortization of $56,768 and $53,283....................................... 23,911 20,489
Other assets............................................................... 692 594
Property held for resale................................................... - 1,900
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$75,022 $50,167
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Liabilities And Stockholders' Equity
Current liabilities
Notes payable, bank...................................................... $ - $ 3,000
Current maturities of long-term debt..................................... 268 339
Current maturities of capital lease obligations.......................... 404 370
Accounts payable......................................................... 5,681 5,206
Payroll, commissions and related expenses................................ 5,304 4,777
Repositioning reserve.................................................... 238 991
Other accrued liabilities................................................ 1,700 1,518
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Total current liabilities............................................. 13,595 16,201
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Long-term debt............................................................. 2,709 4,744
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Long-term capital lease obligations........................................ 710 754
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Other long-term liabilities................................................ 933 794
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Commitments and contingencies (Note 4)
Stockholders' equity
Common stock par value $.25 per share: authorized
30,000,000 shares; issued 9,908,575 and 7,994,495 shares (Note 2)....... 2,477 1,999
Additional paid-in capital (Note 2)..................................... 53,195 27,921
Retained earnings (deficit).............................................. 1,894 (1,738)
Less - Treasury shares 246,053 and 262,886 shares at cost................ 311 330
Unearned compensation-restricted stock............................ 180 178
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Total stockholders' equity............................................ 57,075 27,674
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$75,022 $50,167
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The accompanying notes are an integral part of these financial statements.
3
Alpha Industries, Inc. and Subsidiaries ----------------------------------------
Consolidated Statements of Income
(Unaudited)
(In thousands except per share data)
Third Quarter Ended Nine Months Ended
Dec. 31, Jan. 1, Dec. 31, Jan. 1,
1995 1995 1995 1995
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Net sales.............................. $25,237 $19,359 $71,404 $56,287
Cost of sales........................ 16,684 13,494 47,572 39,407
Research and development expenses.... 2,366 924 6,281 2,722
Selling and administrative expenses.. 4,384 3,917 13,121 11,254
Repositioning credit................. - - (320) -
------- ------- ------- -------
Operating income....................... 1,803 1,024 4,750 2,904
Interest expense....................... (211) (170) (652) (555)
Interest income and other, net......... 98 (15) 175 46
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Income before income taxes............. 1,690 839 4,273 2,395
Provision for income taxes............. 253 65 641 359
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Net income............................. $ 1,437 $ 774 $ 3,632 $ 2,036
======= ======= ======= =======
Net income per share................... $ 0.16 $ 0.10 $ 0.43 $ 0.26
======= ======= ======= =======
Weighted average common shares and
common share equivalents (Note 3)..... 8,870 7,815 8,391 7,754
======= ======= ======= =======
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The accompanying notes are an integral part of these financial statements.
4
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Consolidated Statements Of Cash Flows
(Unaudited)
(In thousands)
Nine Months Ended
Dec. 31, Jan. 1,
1995 1995
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Cash flows from operating activities:
Net income......................................................... $ 3,632 $ 2,036
Adjustments to reconcile net income to net cash provided from
(used for) operations:
Depreciation and amortization of property, plant and equipment... 3,485 3,390
Contribution of treasury shares to Savings and Retirement Plan... 220 -
Amortization of unearned compensation - restricted stock, net.... 45 32
Repositioning credit............................................. (320) -
Increase in other liabilities and long-term benefits............. 139 314
Increase in other assets......................................... (349) (491)
Change in assets and liabilities:
Accounts receivable............................................ (2,974) (41)
Inventories.................................................... (2,464) (1,693)
Other current assets........................................... (60) 97
Accounts payable............................................... 475 (284)
Other accrued liabilities and expenses......................... 709 (133)
Repositioning reserve.......................................... (753) (730)
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Net cash provided from operations............................ 1,785 2,497
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Cash flows from investing activities:
Proceeds from sale of building..................................... 2,465 -
Additions to property, plant and equipment......................... (6,592) (3,407)
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Net cash used in investing activities........................ (4,127) (3,407)
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Cash flows from (used in) financing activities:
Proceeds from sale of common stock................................. 25,286 -
Proceeds from debt................................................. 624 2,016
Repayment of debt.................................................. (5,730) (246)
Deferred charges related to long-term debt......................... 6 (18)
Payments on capital lease obligations.............................. (325) (265)
Proceeds from sale of stock under stock purchase plan.............. 64 42
Exercise of stock options.......................................... 154 330
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Net cash from financing activities........................... 20,079 1,859
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Net increase in cash and cash equivalents............................ 17,737 949
Cash and cash equivalents, beginning of period....................... 3,510 1,691
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Cash and cash equivalents, end of period............................. $21,247 $ 2,640
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Supplemental Disclosures:
Capital lease obligations of $315 thousand were incurred during the nine months
ended December 31, 1995 when the Company entered into leases for new equipment.
The accompanying notes are an integral part of these financial statements.
5
Alpha Industries, Inc. and Subsidiaries ----------------------------------------
Notes To Consolidated Financial Statements
(unaudited)
Note 1 Inventories
Dec. 31, April 2,
Inventories consist of the following (in thousands): 1995 1995
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Raw materials .................................... $ 4,579 $ 3,186
Work-in-process .................................. 5,541 4,950
Finished goods ................................... 1,714 1,234
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$11,834 $ 9,370
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Note 2 Common Stock
During the quarter the Company successfully completed a secondary stock
offering, which raised $25.3 million net of expenses, on the sale of 1,840,000
shares of common stock.
Note 3 Earnings Per Share
Earnings per common share for the nine months ended December 31, 1995 and
January 1, 1995 were computed using the weighted average number of common shares
and common equivalent shares outstanding during the periods of 8,390,910 and
7,754,486 shares, respectively.
Note 4 Commitments and Contingencies
The Company is party to suits and claims arising in the normal course of
business. Management believes these are adequately provided for or will result
in no significant additional liability to the Company.
6
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PART I - ITEM 2
Management's Discussion And Analysis of Financial Condition And Results Of
Operations
Results of Operations
Sales for the nine months ended December 31, 1995 were $71.4 million, an
increase of 27% compared with $56.3 million for the comparable period last year.
Sales for the third quarter of fiscal 1996 totaled $25.2 million, an increase of
30% compared with sales of $19.4 million for the same period last year. The year
and quarter-to-date sales increases were attributable to increased shipments for
wireless communications products, particularly ceramic components, Gallium
Arsenide Monolithic Integrated Circuits (GaAs MMICs) and discrete
semiconductors.
New orders received for the third quarter of fiscal 1996 were $26.6 million, an
increase of 26% compared with $21.1 million for the comparable period last year.
Year-to-date orders totaled $79.1 million, an increase of 30% compared with
$60.7 million for the same period last year, with demand particularly strong in
the ceramic components, GaAs MMICs and discrete semiconductor product areas.
Gross profit for the first nine months of fiscal 1996 increased 41% to $23.8
million or 33.4% of sales as compared to $16.9 million or 30% of sales, for the
comparable period in fiscal 1995. Gross profit for the third quarter of fiscal
1996 increased 45.8% to $8.6 million or 33.9% of sales as compared to $5.9
million or 30.3% of sales, for the comparable period last year. The improvement
in gross profit is due mainly to higher capacity utilization at the Company's
Woburn, Massachusetts manufacturing facility.
While sales and profits have achieved substantial growth, there are indications
that this rate of growth may be slowed over the next one or two quarters. The
Company's ceramics operation continues to experience demand that outpaces its
ability to add capacity, due to equipment lead times and facility constraints.
However, the Company continues to invest heavily in capital equipment and people
and is moving ahead with a new 60,000 square foot manufacturing facility.
The Company's ability to improve operating margins by leveraging Gallium
Arsenide capacity is highly dependent on securing volume production design wins
and on the overall subscriber market demand. The Company's new GaAs MMIC designs
and prototypes are being well received by the Company's targeted customers, as
evidenced by year-to-date sales to the top four wireless original equipment
manufacturers (OEMs) and their suppliers having increased by approximately 75%
over last year, but the timing of the production ramp will not substantially
increase until early fiscal year 1997.
Research and development expenses increased 130.8% to $6.3 million, or 8.8% of
sales for the first nine months of fiscal 1996 as compared to $2.7 million or
4.8% of sales for the comparable period last year. For the third quarter ended
December 31, 1995, research and development expenses increased 156.1% to $2.4
million or 9.4% of sales as compared to $924 thousand or 4.8% of sales for the
comparable quarter last year. These increases in research and development are
due to continued investment by the Company in the ceramic and GaAs MMIC product
lines. The Company will continue to invest in product and process development in
order to address the demands of its targeted wireless markets.
Selling and administrative expenses increased 16.6% to $13.1 million or 18.4% of
sales for the first nine months of fiscal 1996, as compared to $11.3 million or
20.0% of sales for the comparable period last year. For the third quarter of
fiscal 1996 selling and administrative expenses increased 11.9% to $4.4 million
or 17.4% of sales as compared to $3.9 million or 20.2% of sales for the third
quarter last year. Selling and administrative expenses increased primarily as a
result of training and other costs related to the early phases of implementation
of a new
7
Alpha Industries, Inc. and Subsidiaries ----------------------------------------
manufacturing and management information system, as well as increased
commissions related to higher sales volume.
The Company recorded a $320 thousand repositioning credit during the first
quarter of fiscal 1996, which resulted from the reversal of certain accruals for
estimated carrying costs as a result of an earlier than expected disposition of
the Methuen, Massachusetts facility.
Interest expense increased $97 thousand for the first nine months of fiscal 1996
and $41 thousand for the third quarter due to the Company's increased short-term
borrowings. These short-term borrowings were repaid in the third quarter after
the Company successfully completed a secondary public offering which raised
$25.3 million, net of expenses, on the sale of 1,840,000 shares of common stock.
The proceeds are being used to fund further capital expansion and to retire
certain bank debt.
The Company's effective tax rate for the first nine months of fiscal 1996 was
15.0% compared to the current combined federal, state and foreign rate of
approximately 40%. This rate differed from statutory rates primarily as a result
of the utilization of net operating loss carryforwards. At December 31, 1995,
the Company had available net operating loss carryforwards of approximately $23
million which expire commencing in 2004.
Year-to-date net income at December 31, 1995, totaled $3.6 million or $0.43 per
share compared with $2.0 million or $0.26 per share, a 78% increase over the
same period last year. Net income for the third quarter was $1.4 million or
$0.16 per share compared with $774 thousand or $0.10 per share, a 86% increase
compared with the comparable quarter. Per share data reflects the stock offering
completed in the third quarter.
Financial Condition
At December 31, 1995, working capital totaled $36.8 million and included $21.2
million in cash and cash equivalents, compared with $11 million at the end of
fiscal 1995. Cash and cash equivalents increased $17.7 million during the first
nine months of fiscal 1996 largely as a result of funds received from the
Company's secondary public offering.
During the first nine months of fiscal 1996, the Company recorded $6.6 million
of capital expenditures primarily for the expansion of its ceramic manufacturing
facilities, further automation of its semiconductor wafer fab operations, and
various information technology equipment. The Company plans capital expansion of
approximately $9 million over the next nine to twelve months in order to service
the increasing requirements for its products in the wireless markets. In
addition to the proceeds from the offering, the Company also has two lines of
credit available for a total of $12.5 million of which $1.0 million has been
borrowed under a long-term equipment line of credit.
In July, 1995, the Company sold its Methuen, Massachusetts plant and received
net proceeds of $2.5 million. In connection with the sale, using the net
proceeds and $1 million borrowed under its line of credit, the Company retired
$3.5 million of related debt.
During the quarter, the Company successfully completed a surveillance audit to
renew its ISO 9001 certification of its Woburn, Massachusetts facility.
With the funds raised from the secondary offering and the lines of credit
available the Company believes it has adequate funds to support its current
operating needs. However, the Company will continue to evaluate other available
financing such as low interest financing for the capital expansion of its
ceramic manufacturing business and any other sources that may become available.
8
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PART II - OTHER INFORMATION
Item 1 Legal Proceedings
The Company does not have any material pending legal proceedings other than
routine litigation incidental to its business.
The Company has been notified by federal and state environmental agencies of its
potential liability with respect to the following two sites: the Spectron, Inc.
Superfund site in Elkton, Maryland; and the Seaboard Chemical Corporation site
in Jamestown, North Carolina. In each case several hundred other companies have
also been notified about their potential liability regarding these sites. The
Company continues to deny that it has any responsibility with respect to these
sites other than as a de minimis party. Management is of the opinion that the
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outcome of the aforementioned environmental matters will not have a material
effect on the Company's operations.
Item 6 Exhibits And Reports On Form 8-K
(a) Exhibits
(3) Certificate of Incorporation and By-laws.
(a) Restated Certificate of Incorporation (Filed as Exhibit 3 (a)
to Registration Statement on Form S-3 (Registration No. 33-
63857))*.
(b) Amended and restated By-laws of the Corporation dated April
30, 1992 (Filed as Exhibit 3(b) to the Annual Report on Form
10-K for the year ended March 29, 1992)*.
(4) Instruments defining rights of security holders, including
indentures.
(a) Specimen Certificate of Common Stock (Filed as Exhibit 4(a) to
Registration Statement on Form S-3 (Registration No. 33-
63857))*.
(b) Frederick County Industrial Development Revenue Bond, Deed of
Trust, Loan Agreement and Guaranty and Indemnification
Agreement dated June 17, 1982 (Filed as Exhibit 4(g) to the
Registration Statement on Form S-8 filed July 29, 1982)*. Bond
and Loan Document Modification Agreement dated December 9,
1993 (Filed as Exhibit 4(c) to the Quarterly Report on Form
10-Q for the quarter ended December 26, 1993)*.
(c) Amended and Restated Rights Agreement dated as of November 24,
1986, as amended and restated July 3, 1990 and as further
amended September 9, 1990 and September 24, 1990, between
Registrant and The First National Bank of Boston, as Rights
Agent (The July 3, 1990 restatement and the September 9, 1990
and September 24, 1990 amendments were filed as Exhibit 4 to
the Current Report on Form 8-K dated July 3, 1990 and Exhibits
4(a) and 4(b) to the Current Report on Form 8-K dated
September 18, 1990, respectively)*.
(d) Loan and Security Agreement dated December 15, 1993 between
Trans-Tech, Inc., and County Commissioners of Frederick County
(Filed as Exhibit 4(h) to the Quarterly Report on Form 10-Q
for the quarter ended July 3, 1994)*.
(e) Stock Purchase Warrant for 50,000 shares of the Registrant's
Common Stock issued to Silicon Valley Bank as of April 1, 1994
(Filed as Exhibit 4(i) to the Quarterly Report on Form 10-Q
for the quarter ended July 3, 1994)*.
(f) Credit Agreement dated September 29, 1995 between Alpha
Industries, Inc, and Trans-Tech Inc. and Fleet Bank of
Massachusetts, N.A. and Silicon Valley Bank. (Filed as Exhibit
4(j) to the Quarterly Report on Form 10-Q for the quarter
ended October 1, 1995)* and amended and restated promissory
notes dated as of October 31, 1995.
9
Alpha Industries, Inc. and Subsidiaries ----------------------------------------
(10) Material Contracts.
(a) Alpha Industries, Inc., 1986 Long-Term Incentive Plan as
amended (Filed as Exhibit 10(a) to the Quarterly Report on
Form 10-Q for the quarter ended October 2, 1994)*. (1)
(b) Alpha Industries, Inc., Employee Stock Purchase Plan as
amended October 22, 1992 (Filed as Exhibit 10(b) to the Annual
Report on Form 10-K for the fiscal year ended March 28,
1993)*. (1)
(c) SERP Trust Agreement between the Registrant and the First
National Bank of Boston as Trustee dated April 8, 1991 (Filed
as Exhibit 10(c) to the Annual Report on Form 10-K for the
fiscal year ended March 31, 1991)*. (1)
(d) Digital Business Agreement between Digital Equipment
Corporation and Registrant dated April 2, 1990. Master Lease
Addendum (Ref. No. 6260) to Digital Business Agreement No.
3511900 between Digital Equipment Corporation and Registrant
dated April 2, 1990 (Filed as Exhibit 10(g) to the Annual
Report on Form 10-K for the fiscal year ended March 29,
1992)*.
(e) Alpha Industries, Inc., Long-Term Compensation Plan dated
September 24, 1990 (Filed as Exhibit 10(i) to the Annual
Report on Form 10-K for the fiscal year ended March 29,
1992)*; amended March 28, 1991 (Filed as Exhibit 10 (a) to the
Quarterly Report on Form 10-Q for the quarter ended June 27,
1993)* and as further amended October 27, 1994 (Filed as
Exhibit 10(f) to the Annual Report on Form 10-K for the fiscal
year ended April 2, 1995)*. (1)
(f) Master Equipment Lease Agreement between AT&T Commercial
Finance Corporation and the Registrant dated June 19, 1992
(Filed as Exhibit 10(j) to the Annual Report on Form 10-K for
the fiscal year ended March 28, 1993)*.
(g) Employment Agreement dated October 1, 1990 between the
Registrant and Martin J. Reid, as amended March 26, 1992 and
amended January 19, 1993 (Filed as Exhibit 10(k) to the Annual
Report on Form 10-K for the fiscal year ended March 28, 1993)*
and amended August 10, 1993 (Filed as Exhibit 10(j) to the
Quarterly Report on Form 10-Q for the quarter ended July 3,
1994)*. (1)
(h) Employment Agreement dated October 1, 1990 between the
Registrant and George S. Kariotis, as amended May 15, 1991 and
amended January 22, 1993 (Filed as Exhibit 10(l) to the Annual
Report on Form 10-K for the fiscal year ended March 28, 1993)*
and amended August 10, 1993 (Filed as Exhibit 10(k) to the
Quarterly Report on Form 10-Q for the quarter ended July 3,
1994)*. (1)
(i) Employment Agreement dated October 1, 1990 between the
Registrant and Patrick Daniel Gallagher, as amended March 24,
1992 and amended by Second Amendment dated September 29, 1992
and Third Amendment dated January 20, 1993 (Filed as Exhibit
10(m) to the Annual Report on Form 10-K for the fiscal year
ended March 28, 1993)* and Fourth Amendment dated August 3,
1994 (Filed as Exhibit 10(l) to the Quarterly Report on Form
10-Q for the quarter ended October 2, 1994)*. (1)
(j) Employment Agreement dated April 28, 1994 between the
Registrant and Joseph J. Alberici. (Filed as Exhibit 10(o) to
the Annual Report on Form 10-K for the fiscal year ended April
3, 1994)*; and further amended August 3, 1994 (Filed as
Exhibit 10(n) to the Quarterly Report on Form 10-Q for the
quarter ended October 2, 1994)*. (1)
(k) Consulting Agreement dated August 13, 1992 between the
Registrant and Sidney Topol. (Filed as Exhibit 10(p) to the
Annual Report on Form 10-K for the fiscal year ended April 3,
1994)*. (1)
(l) Employment Agreement dated August 3, 1994 between the
Registrant and Thomas C. Leonard (Filed as Exhibit 10(p) to
the Quarterly Report on Form 10-Q for the quarter ended
October 2, 1994)*. (1)
10
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(m) Master Lease Agreement between Comdisco, Inc. and the
Registrant dated September 16, 1994 (Filed as Exhibit 10(q) to
the Quarterly Report on Form 10-Q for the quarter ended
October 2, 1994)*.
(n) Alpha Industries, Inc., 1994 Non-Qualified Stock Option Plan
for Non-Employee Directors (Filed as Exhibit 10(r) to the
Quarterly Report on Form 10-Q for the quarter ended October 2,
1994)*. (1)
(o) Alpha Industries Executive Compensation Plan dated January 1,
1995 and Trust for the Alpha Industries Executive Compensation
Plan dated January 3, 1995 (Filed as Exhibit 10(p) to the
Annual Report on Form 10-K for the fiscal year ended April 2,
1995)*. (1)
(p) Letter of Employment dated January 24, 1995 between the
Registrant and David J. Aldrich (Filed as Exhibit 10(q) to the
Annual Report on Form 10-K for the fiscal year ended April 2,
1995)*. (1)
(q) Alpha Industries, Inc. Savings and Retirement Plan dated March
31, 1995 (Filed as Exhibit 10(r) to the Annual Report on Form
10-K for the fiscal year ended April 2, 1995)*. (1)
(11) Statement re computation of per share earnings**.
(27) Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K were filed with the Securities and
Exchange Commission during the fiscal quarter ended December
31, 1995.
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* Not filed herewith. In accordance with Rule 12b-32 promulgated pursuant to
the Securities Exchange Act of 1934, as amended, reference is hereby made to
documents previously filed with the Commission, which are incorporated by
reference herein.
** Reference is made to Note 3 of the notes to Consolidated Financial Statements
on Page 6 of this Quarterly Report on Form 10-Q, which Note 3 is hereby
incorporated by reference herein.
(1) Management Contracts.
11
Signatures
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February 9, 1996
----------------
Alpha Industries, Inc. and Subsidiaries
---------------------------------------
Registrant
/s/ Martin J. Reid
-------------------------------------
Martin J. Reid
Chief Executive Officer
President and Director
/s/ Paul E. Vincent
-------------------------------------
Paul E. Vincent
Corporate Controller
Principal Accounting Officer
12
Exhibit 4(f)
AMENDED AND RESTATED PROMISSORY NOTE
(Working Capital Line of Credit Loans)
$4,500,000 Woburn, Massachusetts
As of October 31, 1995
(Originally dated as of
September 29, 1995)
For value received, the undersigned, ALPHA INDUSTRIES, INC., a Delaware
corporation and TRANS-TECH, INC., a Maryland corporation (each a "Borrowers" and
collectively the "Borrowers"), jointly and severally promise to pay to SILICON
---------
VALLEY BANK (the "Bank") at the office of the Bank located at 3000 Lakeside
----
Drive, P.O. Box 3762, Santa Clara, California 95054, or to its order, the lesser
of Four Million Five Hundred Thousand Dollars ($4,500,000) or the outstanding
principal amount hereunder, on August 1, 1997 (the "Maturity Date"), together
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with interest on the principal amount hereof from time to time outstanding at a
fluctuating rates per annum set forth in the Credit Agreement referred to below,
payable monthly in arrears on the first day of each calender month occurring
after the date hereof and on the Maturity Date.
Computations of interest shall be made by the Bank on the basis of a year
of 360 days for the actual number of days occurring in the period for which such
interest is payable.
This promissory note amends and restated the terms and conditions of the
obligations of the Borrowers under the promissory note dated as of September 29,
1995 by the Borrowers to the Bank in the original principal amount of $4,000,000
(the "Original Note"). This note is one of the Working Capital Notes referred to
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in the credit agreement of even date herewith between the Bank, Fleet Bank of
Massachusetts, N.A., and the Borrowers (together with all related schedules), as
the same may be amended, modified or supplemented from time to time (the "Credit
------
Agreement"), and is entitled to the benefits thereof and of the other Loan
- ---------
Documents referred to therein, and is subject to optional and mandatory
prepayment as provided therein. Except for the capitalized terms referred to
herein, the terms used in this Note shall have the respective meanings set forth
in the Credit Agreement. This note is secured inter alia by a Security
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Agreement dated of even date herewith by each Borrower in favor of the Bank as
Collateral Agent for the benefit of the Banks, as the same may be amended,
modified or supplemented from time to time.
Each reference in each Loan Document (as defined in the Credit Agreement)
to the Working Capital Note of the Bank, "thereof," "therein," "thereunder," or
words of like import referring to the Original Note, shall mean and be a
reference to the Original Note, as amended and restated hereby.
Upon the occurrence of any Event of Default under, and as defined in, the
Credit Agreement, at the option of the Bank, the principal amount then
outstanding of and the accrued interest on the advances under this note and all
other amounts payable under this note shall become immediately due and payable,
without notice (including, without limitation, notice of intent to accelerate),
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Borrowers.
The Bank shall keep a record of the amount and the date of the making of
each advance pursuant to the Credit Agreement and each payment of principal with
respect thereto by
-2-
containing a computerized record of such information and printouts of such
computerized record, which computerized record, and the printouts thereof, shall
constitute prima facie evidence of the accuracy of the information so endorsed.
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The undersigned agrees to pay all reasonable costs and expenses of the
Bank (including, without limitation, the reasonable fees and expenses of
attorneys) in connection with the enforcement of this note and the other Loan
Documents and the preservation of their respective rights hereunder and
thereunder.
No delay or omission on the part of the Bank in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Bank, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. The
Borrowers and every endorser or guarantor of this note regardless of the time,
order or place of signing waives presentment, demand, protest and notices of
every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral for this note, and to the additions or releases of any
other parties or persons primarily or secondarily liable.
THIS NOTE SHALL BE DEEMED DELIVERED TO THE BANK AND ACCEPTED BY THE BANK
IN THE STATE OF CALIFORNIA.
EACH BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY NOW OR HEREAFTER
HAVE TO A JURY TRIAL IN ANY SUIT, ACTION OR PROCEEDING WHICH ARISES OUT OF OR BY
REASON OF THIS NOTE, ANY LOAN DOCUMENT (AS DEFINED IN THE CREDIT AGREEMENT), OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
BY ITS EXECUTION AND DELIVERY OF THIS NOTE, EACH BORROWER ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS (AND IN THE EVENT THE BANK IS
FOR ANY REASON DENIED ACCESS TO THE COURTS OF MASSACHUSETTS, THEN SOLELY IN SUCH
CASE, CALIFORNIA) IN ANY ACTION, SUIT OR PROCEEDING OF ANY KIND AGAINST IT WHICH
ARISES OUT OF OR BY REASON OF THIS NOTE, ANY LOAN DOCUMENT (AS DEFINED IN THE
CREDIT AGREEMENT), OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ADDITION TO ANY
OTHER COURT IN WHICH SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT, IRREVOCABLY
AGREES TO BE BOUND BY ANY FINAL JUDGMENT RENDERED BY ANY SUCH COURT IN ANY SUCH
ACTION, SUIT OR PROCEEDING IN WHICH IT SHALL HAVE BEEN SERVED WITH PROCESS IN
THE MANNER HEREINAFTER PROVIDED, SUBJECT TO EXERCISE AND EXHAUSTION OF ALL
RIGHTS OF APPEAL AND TO THE EXTENT THAT IT MAY LAWFULLY DO SO, WAIVES AND AGREES
NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN SUCH ACTION, SUIT
OR PROCEEDING ANY CLAIMS THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION
OF SUCH COURT, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR
EXECUTION, THAT THE ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM OR THAT THE VENUE THEREOF IS IMPROPER, AND AGREES THAT PROCESS MAY BE
SERVED UPON IT IN ANY SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED BY
CHAPTER 223A OF THE GENERAL LAWS OF MASSACHUSETTS, RULE 4 OF THE MASSACHUSETTS
RULE OF CIVIL PROCEDURE OR RULE 4 OF THE FEDERAL RULES OF CIVIL PROCEDURE.
-3-
ALL RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS AND THIS NOTE SHALL BE DEEMED TO BE UNDER SEAL.
Attest: ALPHA INDUSTRIES, INC.
/s/ Donald E. Paulson By: /s/ D J Aldrich
- ----------------------------- ------------------------------
Name: DONALD E. PAULSON Name: D J ALDRICH
Title: SECRETARY Title: V P & TREAS.
[Seal]
Attest: TRANS-TECH, INC.
/s/ N R Pitaro By: /s/ D J Aldrich
- ----------------------------- ------------------------------
Name: N R PITARO Name: D J ALDRICH
Title: ASST SCTY Title: TREASURER
[Seal]
Exhibit 4(f)
AMENDED AND RESTATED PROMISSORY NOTE
(Working Capital Line of Credit Loans)
$3,000,000 Woburn, Massachusetts
As of October 31, 1995
(Originally dated as of
September 29, 1995)
For value received, the undersigned, ALPHA INDUSTRIES, INC., a Delaware
corporation and TRANS-TECH, INC., a Maryland corporation (each a "Borrower" and
--------
collectively the "Borrowers"), jointly and severally promise to pay to FLEET
---------
BANK OF MASSACHUSETTS, N.A. (the "Bank") at the office of the Bank located at
----
Fleet Center, 75 State Street, Boston, Massachusetts 02109-1810, or to its
order, the lesser of Three Million Dollars ($3,000,000) or the outstanding
principal amount hereunder, on August 1, 1997 (the "Maturity Date"), together
-------------
with interest on the principal amount hereof from time to time outstanding at a
fluctuating rates per annum set forth in the Credit Agreement referred to
below, payable monthly in arrears on the first day of each calendar month
occurring after the date hereof and on the Maturity Date.
Computations of interest shall be made by the Bank on the basis of a year
of 360 days for the actual number of days occurring in the period for which such
interest is payable.
This promissory note amends and restates the terms and conditions of the
obligations of the Borrowers under the promissory note dated as of September 29,
1995 by the Borrowers to the Bank in the original principal amount of $2,500,000
(the "Original Note"). This note is one of the Working Capital Notes
-------------
referred to in the credit agreement of even date herewith between the Bank,
Silicon Valley Bank, and the Borrowers (together with all related schedules), as
the same may be amended, modified or supplemented from time to time (the "Credit
------
Agreement"), and is entitled to the benefits thereof and of the
- ---------
other Loan Documents referred to therein, and is subject to optional and
mandatory prepayment as provided therein. Except for the capitalized terms
referred to herein, the terms used in this Note shall have the respective
meanings set forth in the Credit Agreement. This note is secured inter alia by a
----- ----
Security Agreement dated of even date herewith by each Borrower in
favor of Silicon Valley Bank as Collateral Agent for the benefit of the Banks,
as the same may be amended, modified or supplemented from time to time.
Each reference in each Loan Document (as defined in the Credit Agreement)
to the Working Capital Note of the Bank, "thereof," "therein," "thereunder," or
words of like import referring to the Original Note, shall mean and be a
reference to the Original Note, as amended and restated hereby.
Upon the occurrence of any Event of Default under, and as defined in, the
Credit Agreement, at the option of the Bank, the principal amount then
outstanding of and the accrued interest on the advances under this note and all
other amounts payable under this note shall become immediately due and payable,
without notice (including, without limitation, notice of intent to accelerate),
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Borrowers.
-2-
The Bank shall keep a record of the amount and the date of the making of
each advance pursuant to the Credit Agreement and each payment of principal
with respect thereto by maintaining a computerized record of such information
and printouts of such computerized record, which computerized record, and the
printouts thereof, shall constitute prima facie evidence of the accuracy of the
----- -----
information so endorsed.
The undersigned agrees to pay all reasonable costs and expenses of the Bank
(including, without limitation, the reasonable fees and expenses of attorneys)
in connection with the enforcement of this note and the other Loan Documents and
the preservation of their respective rights hereunder and thereunder.
No delay or omission on the part of the Bank in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Bank, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. The
Borrowers and every endorser or guarantor of this note regardless of the time,
order or place of signing waives presentment, demand, protest and notices of
every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral for this note, and to the additions or releases of any
other parties or persons primarily or secondarily liable.
EACH BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY NOW OR HEREAFTER HAVE
TO A JURY TRIAL IN ANY SUIT, ACTION OR PROCEEDING WHICH ARISES OUT OF OR BY
REASON OF THIS NOTE, ANY LOAN DOCUMENT (AS DEFINED IN THE CREDIT AGREEMENT), OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
BY ITS EXECUTION AND DELIVERY OF THIS NOTE, EACH BORROWER ACCEPTS FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT OR
PROCEEDING OF ANY KIND AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS NOTE,
ANY LOAN DOCUMENT (AS DEFINED IN THE CREDIT AGREEMENT), OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ADDITION TO ANY OTHER COURT IN WHICH SUCH ACTION, SUIT
OR PROCEEDING MAY BE BROUGHT, IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL
JUDGMENT RENDERED BY ANY SUCH COURT IN ANY SUCH ACTION, SUIT OR PROCEEDING IN
WHICH IT SHALL HAVE BEEN SERVED WITH PROCESS IN THE MANNER HEREINAFTER PROVIDED,
SUBJECT TO EXERCISE AND EXHAUSTION OF ALL RIGHTS OF APPEAL AND TO THE EXTENT
THAT IT MAY LAWFULLY DO SO, WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION,
AS A DEFENSE OR OTHERWISE, IN SUCH ACTION, SUIT OR PROCEEDING ANY CLAIMS THAT IT
IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT ITS PROPERTY
IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE ACTION, SUIT OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS
IMPROPER, AND AGREES THAT PROCESS MAY BE SERVED UPON IT IN ANY SUCH ACTION, SUIT
OR PROCEEDING IN THE MANNER PROVIDED BY CHAPTER 223A OF THE GENERAL LAWS OF
MASSACHUSETTS, RULE 4 OF THE MASSACHUSETTS RULES OF CIVIL PROCEDURE OR RULE 4 OF
THE FEDERAL RULES OF CIVIL PROCEDURE.
-3-
ALL RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS AND THIS NOTE SHALL BE DEEMED TO BE UNDER SEAL.
Attest: ALPHA INDUSTRIES, INC.
/s/ Donald E Paulson By: /s/ D J Aldrich
- ----------------------------- ------------------------------
Name: DONALD E PAULSON Name: D J ALDRICH
Title: SECRETARY Title: V P & TREASURER
[Seal]
Attest: TRANS-TECH, INC.
/s/ N R Pitaro By: /s/ D J Aldrich
- ----------------------------- ------------------------------
Name: N R PITARO Name: D J ALDRICH
Title: ASST SCTY Title: TREASURER
[SEAL]
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5
1,000
9-MOS
MARCH 31, 1996
DEC-31-1995
21,247
0
17,113
591
11,834
50,419
80,679
56,768
75,022
13,595
3,419
0
0
2,477
54,598
75,022
71,404
71,404
47,572
66,974
(357)
44
514
4,273
641
3,632
0
0
0
3,632
0.43
0.43
