-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MQ8jR8ESGaQLk8rao19jzgSnODQT4c2S/23BoBjZmkQdn/qTT9ZqUVpPWYGM0QDY XqlHjI6ZM+qruwYRUWEgPQ== 0000896645-97-000002.txt : 19970222 0000896645-97-000002.hdr.sgml : 19970222 ACCESSION NUMBER: 0000896645-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19961229 FILED AS OF DATE: 19970212 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASECO CORP CENTRAL INDEX KEY: 0000896645 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 042816806 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21294 FILM NUMBER: 97525887 BUSINESS ADDRESS: STREET 1: 500 DONALD LYNCH BLVD CITY: MARLBORO STATE: MA ZIP: 01752 BUSINESS PHONE: 5084818896 MAIL ADDRESS: STREET 1: 500 DONALD LYNCH BOULEVARD CITY: MARLBORO STATE: MA ZIP: 01752 10-Q 1 FORM 10Q (12/29/96) SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended December 29, 1996 Commission file number 0-21294 Aseco Corporation (Exact name of registrant as specified in its charter) Delaware 04-2816806 (State or other jurisdiction of (I.R.S.Employer Identification No.) incorporation or organization) 500 Donald Lynch Boulevard, Marlboro, Massachusetts 01752 (Address of principal executive offices) (508)481-8896 (Registrant's telephone number, including area code) 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 ---- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of December 29, 1996. Common Stock, $.01 par value 3,641,300 (Title of each class) (Number of shares) ASECO CORPORATION TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets (unaudited) at December 29, 1996 and March 31, 1996 3 Condensed Consolidated Statements of Income (unaudited) for the three months and nine months ended December 29, 1996 and December 31, 1995 4 Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended December 29, 1996 and December 31, 1995 5 Notes to Condensed Consolidated Financial Statements 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 PART II. OTHER INFORMATION Item 1. Legal Proceedings 10 Item 2. Changes in Securities 10 Item 3. Defaults upon Senior Securities 10 Item 4. Submission of Matters to a Vote of Security Holders 10 Item 5. Other Information 10 Item 6. Exhibits and Reports on Form 8-K 10 Signatures 12 PART I. FINANCIAL INFORMATION Item 1. Financial Statements ASECO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share and per share data) December 29, March 31, 1996 1996 ASSETS Current Assets Cash and cash equivalents $ 14,245 $ 14,083 Accounts receivable, less allowance for doubtful accounts of $410 at December 29, 1996 and $397 at March 31, 1996 8,474 12,346 Inventories, net 8,999 7,059 Prepaid expenses and other current assets 1,549 864 --------- -------- Total current assets 33,267 34,352 Plant and equipment, at cost 4,825 4,187 Less accumulated depreciation and amortization 2,726 2,176 --------- -------- 2,099 2,011 Other assets, net 396 318 --------- -------- $ 35,762 $ 36,681 ========= ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 1,595 $ 3,441 Accrued expenses 2,672 3,923 Income taxes payable 274 476 Current portion of capital lease obligations 13 13 --------- --------- Total current liabilities 4,554 7,853 Deferred taxes payable 493 370 Long-term capital lease obligations 32 42 Stockholders' equity Preferred stock, $.01 par value, 1,000,000 shares authorized, none issued and outstanding --- --- Common stock, $.01 par value: Authorized 15,000,000 shares, issued and outstanding 3,641,300 and 3,611,501 shares at December 29, 1996 and March 31, 1996, respectively 36 36 Additional paid in capital 17,456 17,234 Retained earnings 13,191 11,146 -------- -------- Total stockholders' equity 30,683 28,416 -------- -------- $ 35,762 $ 36,681 ========= ========
See notes to condensed consolidated financial statements ASECO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except share and per share data)
Three months ended Nine months ended ------------------------------ ------------------------------- December 29, December 31, December 29, December 31, 1996 1995 1996 1995 - ------------------------------------------------------------------------------- Net sales $ 6,722 $ 10,998 $ 26,712 $ 29,875 Cost of sales 3,595 5,433 14,013 15,047 ------- -------- -------- -------- Gross profit 3,127 5,565 12,699 14,828 Research and 1,287 1,228 3,798 3,453 development costs Selling, general 1,713 2,640 6,381 6,807 and administrative ------- ------- ------- ------- expenses Income from operations 127 1,697 2,520 4,568 Other income (expense): Interest income 166 153 489 388 Interest expense (1) (1) (5) (12) ------- ------- ------- ------- 165 152 484 376 ------- ------- ------- ------- Income before income taxes 292 1,849 3,004 4,944 Income tax expense 58 684 959 1,800 ------- ------- ------- ------- Net income $ 234 $ 1,165 $ 2,045 $ 3,144 ======= ======== ======== ======== Earnings per share $ .06 $ .31 $ .55 $ .83 ======= ======== ======== ======== Weighted average common shares and common equivalent shares outstanding 3,711,000 3,801,000 3,708,000 3,782,000
See notes to condensed consolidated financial statements ASECO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands)
Nine months ended December 29, December 31, 1996 1995 Operating activities Net income $ 2,045 $ 3,144 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 679 545 Deferred income taxes (162) -- Changes in assets and liabilities: Accounts receivable 3,872 (1,457) Inventories, net (1,940) (452) Prepaid expenses and other current assets (400) (32) Accounts payable and accrued expenses (3,097) 1,618 Income taxes payable (137) 941 ------- ------- Total adjustments (1,185) 1,163 ------- ------- Cash provided by operating activities 860 4,307 Investing activities: Acquisition of plant and equipment (638) (445) Increase in software development costs and other assets (207) (40) ------- ------- Cash used in investing activities (845) (485) Financing activities: Net proceeds from issuance of common stock 157 476 Reductions of long-term capital lease obligations (10) (8) ------- ------- Cash provided by financing activities 147 468 ------- ------- Net increase (decrease) in cash and cash equivalents 162 4,290 Cash and cash equivalents at the beginning of period 14,083 9,301 ------- ------- Cash and cash equivalents at the end of period $ 14,245 $ 13,591 ======== ========
See notes to condensed consolidated financial statements ASECO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED DECEMBER 29, 1996 1. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine-month periods ended December 29, 1996 are not necessarily indicative of the results that may be expected for the year ended March 30, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended March 31, 1996. 2. The computations of earnings per share are based on the weighted average number of outstanding shares of common stock and common equivalent shares (using the treasury stock method). Fully diluted earnings per share have not been separately presented as the amount does not differ significantly from primary earnings per share. 3. Inventories: Inventories consisted of: (in thousands) December 29, March 31, 1996 1996 Raw Material $ 4,958 $ 3,491 Work in Process 1,409 2,218 Finished Goods 2,632 1,350 -------- -------- $ 8,999 $ 7,059 ======== ======== 4. On April 1, 1996, the Company adopted Financial Accounting Standard No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" which establishes criteria for the recognition and measurement of impairment loss associated with long-lived assets. Adoption of this standard did not have a material impact on the Company's financial position or results of operations. 5. On April 15, 1996, the Company loaned an executive officer of the Company $140,000. The loan bears interest at the rate of 5.33% per annum, compounded annually, and is due and payable in full on the earlier of the termination of the executive officer's employment with the Company or April 15, 1999. The loan is secured by shares of the Company's common stock owned by the executive officer. 6. On August 15, 1996, the Board of Directors adopted a Stockholder Rights Plan. Pursuant to the Stockholder Rights Plan, each share of common stock has an associated right. Under certain circumstances, each right entitles the holder to purchase from the Company one one-thousandth of a share of junior preferred stock at an exercise price of $55.00 per one one-thousandth of a share, subject to adjustment. The rights are not exercisable and cannot be transferred separately from the common stock until ten days after a person acquires or obtains the right to acquire 15% or more or makes a tender offer for 30% or more of the Company's common stock. Upon exercise, each right will entitle the holder to purchase, at the right exercise price, common stock having a value of two times the exercise price of the right. In addition, if the Company is either (i) acquired in a merger or other business combination in which the Company is not the surviving entity, or (ii) sells or transfers 50% or more of its assets or earning power to another party, each right will entitle its holder to purchase, upon exercise, common stock of the acquiring Company having a value equal to two times the exercise price of the right. The rights have certain anti-takeover effects, in that they would cause substantial dilution to a person or group that attempts to acquire a significant interest in the Company on terms not approved by the Board of Directors. The rights expire on August 15, 2006 but may be redeemed by the Company for $.01 per right at any time prior to the tenth day following a person's acquisition of 15% or more of the Company's common stock. So long as the rights are not separately transferable, the Company will issue one right with each new share of common stock issued. Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Three and Nine months ended December 29, 1996 RESULTS OF OPERATION Net sales for the first nine months of fiscal 1997 decreased 11% to $26.7 million compared to $29.9 million for the first nine months of fiscal 1996. Net sales for the third quarter of fiscal 1997 decreased 39% to approximately $6.7 million versus $11 million for the same quarter last year. The decrease in net sales between the two third quarter periods resulted from a decline in the number of units shipped during the third quarter of fiscal 1997 as a result of an industry wide market downturn. The impact of the unit decrease was partially offset by higher average selling prices across most models which was attributable to added automation features and other product enhancements. International sales represented approximately 50% of net sales for the first nine months of fiscal 1997 versus 40% in the first nine months of fiscal 1996. International sales represented approximately 36% of net sales in the third quarter of fiscal 1997 versus 42% in the third quarter of fiscal 1996. Approximately 75% of all international sales were to customers located in the Pacific Rim region. Gross margin for the first nine months of fiscal 1997 was 48% compared to 50% in the same period last year. Gross margin in the third quarter of fiscal 1997 was 47% compared to 51% in the third quarter of fiscal 1996. The lower margin percentages were the result of manufacturing overhead spending declining at a slower rate than sales reflecting the Company's view that investments in manufacturing capacity should be based on a long term plan rather than the operating results of individual quarters. Research and development expenses increased 10% to $3.8 million in the first nine months of fiscal 1997 from $3.5 million in the first nine months of fiscal 1996. Research and development expenses increased 5% in the third quarter of fiscal 1997 to $1.3 million from $1.2 million in the third quarter of fiscal 1996. Research and development expenses also increased as a percentage of sales to 19% in the third quarter of fiscal 1997 from 11% in the third quarter of fiscal 1996 reflecting the Company's commitment to a long range research and development program notwithstanding fluctuations in net sales. Selling, general and administrative expenses for the first nine months of fiscal 1997 were $6.4 million, down 6%, versus $6.8 million in the first nine months of fiscal 1996. Selling, general and administrative expenses for the third quarter of fiscal 1997 were $1.7 million, down 35% from $2.6 million in the same quarter last year. The quarterly spending decrease was primarily the result of a decrease in sales commissions earned during the third quarter of fiscal 1997 resulting from lower net sales and, to a lesser extent, a decrease in commission rates resulting from the higher percentage of domestic sales which earned lower commission rates. The quarterly spending decrease was also due to a reduction in personnel related expenses undertaken by the Company in light of the industry-wide market downturn. Operating income in the first nine months of fiscal 1997 was $2.5 million compared to $4.6 million in the first nine months of fiscal 1996, a decrease of approximately 45%. Operating income in the third quarter of fiscal 1997 decreased approximately 93% to $127,000 from $1.7 million in the third quarter of fiscal 1996. The tax rate for the first nine months of fiscal 1997 was 32% versus 36% in the same period last year. The tax rate for the third quarter of fiscal 1997 was 20% versus 37% in the same quarter last year. The decrease in the third quarter tax rate is primarily due to increased international sales which are taxed at a lower tax rate coupled with the anticipated benefit to be realized from research and development tax credits as the Company accelerated spending on qualified development projects. As a result of the foregoing, net income for the first nine months of fiscal 1997 was $2.0 million, or $.55 per share, as compared to $3.1 million, or $.83 per share, for the first nine months of fiscal 1996. Net income for the third quarter of fiscal 1997 was $234,000, or $.06 per share, versus $1.2 million, or $.31 per share, for the third quarter of fiscal 1996. LIQUIDITY AND CAPITAL RESOURCES The Company ended the third quarter of fiscal 1997 with a cash position of approximately $14.2 million. Additionally, the Company has an unsecured line of credit with a bank in the amount of $5.0 million against which there were no borrowings at the end of the third quarter of fiscal 1997. The Company generated approximately $860,000 of cash from operations during the first nine months of fiscal 1997. Accounts receivable decreased approximately $3.9 million in the first nine months of fiscal 1997 due to the decrease in net sales. Inventory increased approximately $1.9 million during the first nine months of fiscal 1997 and remained relatively consistent with the prior quarter. The year to date inventory increase is due to the Company's strategic decision to build machines beyond forecasted demand in order to be in a position to take advantage of late quarter changes in customer demand and product mix. The Company used $638,000 in cash during the first nine months of fiscal 1997 to fund the acquisition of capital equipment and $207,000 to fund internal software development costs. The Company expects that its investment in capital equipment in fiscal 1997 will be greater than in fiscal 1996. The Company generated cash from financing activities in the first nine months of fiscal 1997 of $147,000, primarily from employee stock purchases under the Company's employee stock plans. The Company believes that funds generated from operations, existing cash balances and available borrowing capacity will be sufficient to meet the Company's cash requirements for at least the next twelve months. CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 The Company's future results are difficult to predict and may be affected by a number of important risk factors including, but not limited to, the factors listed in the Company's Annual Report on Form 10K for the fiscal year ended March 31, 1996. The Company wishes to caution readers that those important factors, in some cases, have affected, and in the future could affect, the Company's actual consolidated quarterly or annual operating results and could cause those actual consolidated quarterly or annual operating results to differ materially from those expressed in any forward looking statements made by, or on behalf of, the Company. ASECO CORPORATION PART II - OTHER INFORMATION Item 1. Legal Proceedings: None. Item 2. Changes in Securities: Effective as of January 2, 1997, the Company appointed American Stock Transfer & Trust Company to replace State Street Bank and Trust Company as its Transfer Agent and as the Rights Agent under its shareholder rights plan. In connection with such appointment, the Company and American Stock Transfer & Trust Company amended the Rights Agreement dated as of August 15, 1996 to lower the level of capital required for the Rights Agent from $50 million to $10 million. Item 3. Defaults upon Senior Securities: None. Item 4. Submissions of Matters to a Vote of Security Holders: Item 5. Other Information: None. Item 6. Exhibits and reports on Form 8-K: a. See Exhibit Index b. There were no reports on Form 8-K filed for the three months ended December 29, 1996. EXHIBIT INDEX Exhibit Number Description 4.2 Rights Agreement dated August 15, 1996 between the Company and State Street Bank & Trust Company as Rights Agent as filed on the Company's Registration Statement on Form 8-A with the Commission on August 28, 1996 and incorporated herein by reference. 4.3 Amendment Number One to Rights Agreement dated January 2, 1997 between the Company and American Stock Transfer & Trust Company. 10.14 Promissory Note between the Company and Sebastian J. Sicari dated April 15, 1996. 10.15 Pledge Agreement between the Company and Sebastian J. Sicari dated April 15, 1996. ASECO CORPORATION SIGNATURES 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. Signature Title Date /s/ Carl S. Archer, Jr. President and Chief Executive February 12, 1997 - ----------------------- Officer (principal executive Carl S. Archer, Jr. officer) /s/ Sebastian J. Sicari Vice President, Finance and February 12, 1997 - ----------------------- Administration, Chief Financial Sebastian J. Sicari Officer, Treasurer (principal financial and accounting officer) EX-4.3 2 AMENDMENT #1 TO SHAREHOLDER RIGHTS AGREEMENT Exhibit 4.3 AMENDMENT NO. 1 TO RIGHTS AGREEMENT This Amendment is made as of January 2, 1997 by and between Aseco Corporation, a Delaware corporation (the "Company"), and American Stock Transfer & Trust Company ("AST"). WITNESSETH: WHEREAS, a Rights Agreement dated as of August 15, 1996 was entered into by and between the Company and State Street Bank & Trust Company (the "Rights Agreement"); and WHEREAS, AST has succeeded to all of the covenants, agreements, obligations, rights and benefits of State Street Bank and Trust Company, as Rights Agent, under the Rights Agreement; and WHEREAS, Section 27 of the Rights Agreement provides that, prior to the Distribution Date (as therein defined), the Company and the Rights Agent, if the Company so directs, shall supplement or amend any provision of the Rights Agreement without the approval of any holders of Rights (as therein defined); NOW THEREFORE, the parties hereto agree as follows: Section 1. The Company hereby directs that the Rights Agreement be amended as provided in Section 2 below. Section 2. The fifth sentence of Section 21 of the Rights Agreement is hereby amended so as to read as follows: Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or of any state of the United States, in good standing, having an office in the State of New York, which is authorized under such laws to exercise stockholder services or corporate trust powers and is subject to supervision or examination by federal or state authorities and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $10,000,000. Section 3. Except as specifically provided in this Amendment, the Rights Agreement shall remain in full force and effect without change. This Amendment shall be deemed part of, and construed in accordance with, the Rights Agreement. This Amendment may be executed in any number of counterparts, and with counterpart signature pages, but all such counterparts shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed as of the day and year first above written. ASECO CORPORATION By:_______________________ Name:_____________________ Title:____________________ AMERICAN STOCK TRANSFER & TRUST COMPANY By:_______________________ Name:_____________________ Title:____________________ ds1/314389 EX-10.14 3 PROMISSORY NOTE BETWEEN THE COMPANY AND MR. SICARI Exhibit 10.14 PROMISSORY NOTE $140,000.00 Marlboro, Massachusetts April 15, 1996 SEBASTIAN J. SICARI ("Sicari"), for value received, hereby promises to pay to the order of ASECO CORPORATION, a Delaware corporation (the "Company"), the principal amount of One Hundred Forty Thousand Dollars ($140,000.00), with interest accruing on the unpaid principal amount hereof at the rate of 5.33% per annum, compounded annually. All outstanding principal and interest accrued thereon shall be due and payable in full on the earlier to occur of (a) the termination of Sicari's employment with the Company (for any reason) and (b) April 15, 1999. Sicari may at any time and from time to time prepay all or any portion of said principal and interest, without premium or penalty. The holder of this Note is entitled to the benefits of a Pledge Agreement of even date herewith by and between Sicari and the Company (the "Pledge Agreement"). Neither reference herein to the Pledge Agreement nor any provision thereof shall affect or impair the absolute and unconditional obligation of Sicari to pay the principal of and interest, if any, on this Note as provided herein. No delay or omission on the part of the holder of this Note in exercising any right hereunder or under the Pledge Agreement shall operate as a waiver of such right or of any other right of such holder, 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. All payments of principal of and interest, if any, on this Note shall be payable in immediately available funds at the address of the Company set forth in the Pledge Agreement. Sicari and all endorsers or guarantors of this Note, regardless of the time, order or place of signing, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Note. All rights and obligations hereunder shall be governed by the laws of The Commonwealth of Massachusetts and this Note shall be deemed to be under seal. ______________________________________ Sebastian J. Sicari DS1-255612 EX-10.15 4 PLEDGE AGMT BETWEEN THE COMPANY AND MR. SICARI Exhibit 10.15 PLEDGE AGREEMENT THIS AGREEMENT, dated as of the 15th day of April, 1996, by and between SEBASTIAN J. SICARI (the "Pledgor") and ASECO CORPORATION, a Delaware corporation (the "Company"). W I T N E S S E T H : WHEREAS, the Company has agreed to make a loan as of the date hereof in the principal amount of $140,000 to the Pledgor (the "Loan"), such Loan to be evidenced by the Pledgor's Promissory Note, payable to the order of the Company (the "Note"); and WHEREAS, the obligation of the Company to make the Loan is subject to the conditions, among others, that the Pledgor shall execute and deliver this Agreement and grant the security interest hereinafter described; NOW, THEREFORE, in consideration of the willingness of the Company to make the Loan to the Pledgor, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows: 1. Security Interest. The Pledgor hereby deposits with and pledges to the Company 15,000 shares of the Common Stock, $.01 par value, of the Company (the "Pledged Stock"), and the Pledgor hereby grants to the Company a security interest in the Pledged Stock as security for the due and punctual payment and performance of the Secured Obligation described in section 2 hereof. 2. Secured Obligation. The security interest hereby granted shall secure the due and punctual payment of the principal of and interest, if any, on the Note (the "Secured Obligation"). 3. Special Warranties and Covenants of the Pledgor. The Pledgor hereby warrants and covenants to the Company that: (a) The Pledged Stock is duly and validly pledged with the Company in accordance with law and the Pledgor warrants and will defend the Company's right, title and security interest in and to the Pledged Stock against the claims and demands of all persons whomsoever. (b) The Pledgor has good title to the Pledged Stock, free and clear of all claims, mortgages, pledges, liens, security interests and other encumbrances of every nature whatsoever. (c) All of the Pledged Stock has been duly and validly issued and is fully paid and nonassessable. (d) The Pledgor will not sell, convey or otherwise dispose of any of the Pledged Stock, nor will the Pledgor create, incur or permit to exist any pledge, mortgage, lien, charge, encumbrance or any security interest whatsoever with respect to any of the Pledged Stock or the proceeds thereof, other than liens on and security interests in the Pledged Stock created hereby. 4. Distributions. In case, upon the dissolution, winding up, liquidation or reorganization of the Company, whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of the Company or otherwise, any sum shall be paid or any property shall be distributed upon or with respect to any of the Pledged Stock, such sum shall be paid over to the Company to be held as collateral security for the Secured Obligation. In case any stock dividend shall be declared on the Pledged Stock, or any share of stock or fraction thereof shall be issued pursuant to any stock split involving the Pledged Stock, or any distribution of capital (excluding ordinary cash dividends) shall be made on the Pledged Stock, or any property shall be distributed upon or with respect to the Pledged Stock pursuant to recapitalization or reclassification of the capital of the Company, the shares or other property so distributed shall be delivered to the Company to be held as collateral security for the Secured Obligation. 5. Events of Default. There shall exist a default under this Agreement upon the default in the due and punctual payment of any principal of or interest on the Secured Obligation as and when the same becomes due and payable (herein called an "Event of Default"). 6. Rights and Remedies of Company. Upon the occurrence of an Event of Default, such default not having previously been remedied or cured, the Company shall have all rights and remedies provided by law, including, without limitation, those provided by the Uniform Commercial Code, and all rights and remedies provided in this Agreement and the Note. 7. Right to Transfer into Name of Company, etc. In case there shall exist an Event of Default, but subject to the provisions of the Uniform Commercial Code or other applicable law, the Company may cause all or any of the Pledged Stock to be transferred into its name or into the name of its nominee or nominees. So long as no Event of Default shall exist, the Pledgor shall be entitled to exercise as the Pledgor shall deem fit, but in a manner not inconsistent with the terms hereof or of the Secured Obligation, the voting power with respect to the Pledged Stock. 8. Right of Company to Exercise Voting Power, etc. In case there shall exist an Event of Default, the Company shall be entitled to exercise the voting power with respect to the Pledged Stock, to receive and retain, as collateral security for the Secured Obligation, any and all dividends or other distributions at any time and from time to time declared or made upon the Pledged Stock, and to exercise any and all rights of payment, conversion, exchange, subscription or any other rights, privileges or options pertaining to the Pledged Stock as if it were the absolute owner thereof, including without limitation, the right to exchange, at its discretion, any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other readjustment of the Company or, upon the exercise of any such right, privilege or option pertaining to the Pledged Stock, and in connection therewith, to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Company may determine, all without liability except to account for property actually received, but the Company shall have no duty to exercise any of the aforesaid rights, privileges or options and shall not be responsible for any failure to do so or delay in so doing. 9. Right of Company to Dispose of Pledged Stock, etc. Upon the occurrence of an Event of Default, such default not having previously been remedied or cured, the Company shall have the right at any time or times thereafter to sell, resell, assign and deliver all or any of the Pledged Stock in one or more parcels at any exchange or broker's board or at public or private sale. The Company will give the Pledgor at least ten (10) days' prior written notice at the address of the Pledgor specified in section 16 hereof of the date on which and manner in which any private or any other intended disposition thereof is to be made. Any such notice shall be deemed to meet any requirement hereunder or under any applicable law (including the Uniform Commercial Code) that reasonable notification be given of the time and place of such sale or other disposition. Such notice may be given without any demand of performance or other demand, all such demands being hereby expressly waived by the Pledgor. All such sales shall be at such commercially reasonable price or prices as the Company shall deem best. Upon any such sale or sales the Pledged Stock so purchased shall be held by the purchaser absolutely free from any claims or rights of whatsoever kind or nature, including any equity of redemption and any similar rights, all such equity of redemption and any similar rights being hereby expressly waived and released by the Pledgor. The proceeds of any such sale or sales, together with any other additional collateral security at the time received and held hereunder, shall be received and applied: first, to the payment of all costs and expenses of such sale, including reasonable attorneys' fees; second, to the payment of the Secured Obligation, and any surplus thereafter remaining shall be paid to the Pledgor or to whomever may be legally entitled thereto (including, if applicable, any subordinated creditor of the Pledgor). The Pledgor recognizes that the Company may be unable to effect a public sale of all or a part of the Pledged Stock by reason of certain prohibitions contained in the Securities Act of 1933, but may be compelled to resort to one or more private sales to a restricted group of purchasers, each of whom will be obligated to agree, among other things, to acquire such Pledged Stock for its own account, for investment and not with a view to the distribution or resale thereof. The Pledgor acknowledges that private sales so made may be at prices and upon other terms less favorable to the seller than if such Pledged Stock were sold at public sales, and that the Company has no obligation to delay sale of any such Pledged Stock for the period of time necessary to permit such Pledged Stock to be registered for public sale under the Securities Act of 1933. The Pledgor agrees that any such private sales shall not be deemed to have been made in a commercially unreasonable manner solely because they shall have been made under the foregoing circumstances. 10. Collection of Amounts Payable on Account of Pledged Stock, etc. Upon the occurrence of any Event of Default, the Company may, but without obligation to do so, demand, sue for and/or collect any money or property at any time due, payable or receivable, to which it may be entitled hereunder, on account of or in exchange for any of the Pledged Stock and shall have the right, for and in the name, place and stead of the Pledgor, to execute endorsements, assignments or other instruments of conveyance or transfer with respect to all or any of the Pledged Stock. 11. Care of Pledged Stock in Company's Possession. Beyond the exercise of reasonable care to assure the safe custody of the Pledged Stock while held hereunder, the Company shall have no duty or liability to collect any sums due in respect thereof or to protect or preserve rights pertaining thereto, and shall be relieved of all responsibility for the Pledged Stock upon surrendering the same to the Pledgor. 12. Waivers, etc. The Pledgor hereby waives presentment, demand, notice, protest and, except as is otherwise provided herein, all other demands and notices in connection with this Agreement or the enforcement of the Company's rights hereunder or in connection with the Secured Obligation or any Pledged Stock; consents to and waives notice of the granting of renewals, extensions of time for payment or other indulgences to the Company or the Pledgor or to any third party, or substitution, release or surrender of any collateral security for the Secured Obligation, the addition or release of persons primarily or secondarily liable on the Secured Obligation or on any collateral security for the Secured Obligation, the acceptance of partial payments on the Secured Obligation or on any collateral security for the Secured Obligation and/or the settlement or compromise thereof. No delay or omission on the part of the Company in exercising any right hereunder shall operate as a waiver of such right or of any other right hereunder. Any waiver of any such right on any one occasion shall not be construed as a bar to or waiver of any such right on any future occasion. The Pledgor further waives any right he may have under the constitution of The Commonwealth of Massachusetts or under the Constitution of the United States of America, to notice (other than any requirement of notice provided herein) or to a judicial hearing prior to the exercise of any right or remedy provided by this Agreement to the Company and waives his rights, if any, to set aside or invalidate any sale duly consummated in accordance with the foregoing provisions hereof on the grounds (if such be the case) that the sale was consummated without a prior judicial hearing. The Pledgor's waivers under this section have been made voluntarily, intelligently and knowingly and after the Pledgor has been apprised and counseled by his attorneys as to the nature thereof and his possible alternative rights. 13. Termination; Assignment, etc. This Agreement and the security interest in the Pledged Stock created hereby shall terminate when the Secured Obligation has been paid and finally discharged in full. No waiver by the Company or by any other holder of the Secured Obligation of any default shall be effective unless in writing nor operate as a waiver of any other default or of the same default on a future occasion. In the event of a sale or assignment by the Company of all or any of the Secured Obligation held by it, the Company may assign or transfer its rights and interest under this Agreement in whole or in part to the purchaser or purchasers thereof, whereupon such purchaser or purchasers shall become vested with all of the powers and rights of the Company hereunder, and the Company shall thereafter be forever released and fully discharged from any liability or responsibility hereunder with respect to the rights and interest so assigned. 14. Reinstatement. Notwithstanding the provisions of section 13, this Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any amount received by the Company in respect of the Secured Obligation is rescinded or must otherwise be restored or returned by the Company upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Company or the Pledgor or upon the appointment of any intervenor or conservator of, or trustee or similar official for, the Company or the Pledgor or any substantial part of their respective properties, or otherwise, all as though such payments had not been made. 15. Restrictions on Transfer, etc. To the extent that any restrictions imposed by the charter or by-laws of the Company or any other document or instrument would in any way affect or impair the pledge of the Pledged Stock hereunder or the exercise by the Company of any right granted hereunder, including, without limitation, the right of the Company to dispose of the Pledged Stock upon the occurrence of an Event of Default, the Pledgor hereby waives such restrictions and the Pledgor hereby agrees that he will take any further action which the Company may reasonably request in order that the Company may obtain and enjoy the full rights and benefits granted to the Company by this Agreement free of any such restrictions. 16. Notices. Except as otherwise provided herein, all notices to the Pledgor or to the Company shall be in writing and shall be deemed to have been sufficiently given or served for all purposes hereof if personally delivered or mailed by first class mail, postage prepaid, as follows: (a) if to the Pledgor: Sebastian J. Sicari c/o Aseco Corporation 500 Donald Lynch Boulevard Marlboro, MA 01752 Tel: (508) 481-8896 Fax: (508) 481-0369 (b) if to the Company: Aseco Corporation 500 Donald Lynch Boulevard Marlboro, MA 01752 Attn: Carl S. Archer, Jr. Tel: (508) 481-8896 Fax: (508) 481-0369 with a copy to: Robert V. Jahrling, Esq. Choate, Hall & Stewart Exchange Place 53 State Street Boston, Massachusetts 02109 Tel: (617) 248-5000 Fax: (617) 248-4000 or at such other address as the party to whom such notice is directed may have designated in writing to the other party hereto. A notice shall be deemed to have been given upon the earlier to occur of (i) three (3) days after the date on which it is deposited in the U.S. mails or (ii) receipt by the party to whom such notice is directed. 17. Miscellaneous. This Agreement shall inure to the benefit of and be binding upon the Company and the Pledgor and their respective successors and assigns, and the term "Company" shall be deemed to include any other holder or holders of the Secured Obligation. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 18. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement, including the validity hereof and the rights and obligations of the parties hereunder, shall be construed in accordance with and governed by the laws of The Commonwealth of Massachusetts. The Pledgor, to the extent that he may lawfully do so, hereby consents to service of process, and to be sued, in The Commonwealth of Massachusetts and consents to the jurisdiction of the courts of The Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts, as well as to the jurisdiction of all courts to which an appeal may be taken from such courts, for the purpose of any suit, action or other proceeding arising out of any of his obligations hereunder or with respect to the transactions contemplated hereby, and expressly waives any and all objections he may have as to venue in any such courts. The Pledgor further agrees that a summons and complaint commencing an action or proceeding in any of such courts shall be properly served and shall confer personal jurisdiction if served personally or by certified mail to him at his address provided in section 16 hereof or as otherwise provided under the laws of The Commonwealth of Massachusetts. The Pledgor irrevocably waives all right to a trial by jury in any suit, action or other proceeding instituted by or against the Pledgor in respect of his obligations hereunder or the transactions contemplated hereby. IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed instrument as of the date first above written. By:_________________________________ Sebastian J. Sicari ASECO CORPORATION By:_________________________________ Carl S. Archer, Jr., President DS1-255696 EX-27 5 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ASECO CORPORATION CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED DECEMBER 29, 1996. 1,000 3-MOS MAR-30-1997 SEP-30-1996 DEC-29-1996 14,245 0 8,884 410 8,999 33,267 4,825 2,726 35,762 4,554 0 0 0 36 30,647 35,762 6,722 6,722 3,595 3,595 0 0 (1) 292 58 234 0 0 0 234 .06 .06
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