EXHIBIT 10(u)
FOURTH AMENDMENT TO REVOLVING CREDIT AGREEMENT
THIS FOURTH AMENDMENT dated as of May 9, 1997 to the Revolving Credit
Agreement dated as of July 1, 1994, as amended by the First Amendment to
Revolving Credit Agreement dated as of December 30, 1994, the Second
Amendment to Revolving Credit Agreement dated as of March 31, 1995 and the
Third Amendment to Revolving Credit Agreement dated as of May 15, 1996
(collectively, the "Agreement") between INTERNATIONAL RECTIFIER CORPORATION
(the "Borrower") and XXXXX FARGO BANK, N.A. ("Xxxxx Fargo") WITNESS the
following:
WHEREAS the Borrower has requested that Xxxxx Fargo amend the Agreement
to modify certain covenants and restrictions for a temporary period; and
WHEREAS Xxxxx Fargo is willing to approve such modifications of these
covenants and restrictions for a temporary period;
NOW, THEREFORE, Xxxxx Fargo and the Borrower agree as follows:
1. FINANCIAL CONDITION. Xxxxx Fargo and the Borrower agree that the
definition of "Consolidated Operating Loss" contained in Section 1.01(f)
shall be amended. To that end, the following language is added at the end of
the definition of "Consolidated Operating Loss" in Section 1.01 (f):
"For purposes of this definition, the definition of
"Consolidated Operating Loss", as defined under GAAP, shall be
modified to exclude a one-time charge of up to $80 million for
restructuring and asset impairment charges contemplated by
the Borrower in its Fiscal Year ended June 30, 1997. Such
charges shall include associated inventory write-downs of up to
$5 million."
2. FINANCIAL CONDITION. Xxxxx Fargo and the Borrower agree that the
ratio of "consolidated Debt to consolidated Effective Tangible Net Worth"
contained in Section 6.18(b) shall be amended. To that end, Section 6.18(b)
is hereby modified to delete the ratio of .90 to 1, and to insert in its
place the following:
"1.00 to 1 for the three months ended 6/30/97
1.00 to 1 for the six months ended 12/31/97
.95 to 1 for the six months ended 6/30/98
.90 to 1 for the remainder of the Agreement."
3. FINANCIAL CONDITION. Xxxxx Fargo and the Borrower agree that the
following language is added to Section 6.18(d):
"For purposes of this covenant, the definition of net income,
as defined under GAAP, shall be modified to exclude a one-
time charge of up to $60 million for non-cash restructuring
and asset impairment charges contemplated by the Borrower in
its Fiscal Year ended June 30, 1997."
4. REPRESENTATIONS AND WARRANTIES. In order to induce Xxxxx Fargo to
enter into this Fourth Amendment and to modify the Agreement in the manner
provided in this Fourth Amendment, the Borrower hereby warrants that (i) the
representations and warranties contained in Section 5 of the Agreement are
true and correct on the date of this Fourth Amendment, and (ii) no Event of
Default, as specified in Section 7 of the Agreement and, except as disclosed
by the Borrower to its domestic banks on May 2, 1997, no event which with
notice or lapse of time or both would become such an Event of Default, has
occurred and is continuing on the date of the Fourth Amendment.
5. AGREEMENT OTHERWISE UNALTERED. Except as expressly modified by
this Fourth Amendment, the Agreement shall continue to be and shall remain in
full force and effect.
IN WITNESS WHEREOF, Xxxxx Fargo and the Borrower by their respective duly
authorized officers or representatives have caused this Fourth Amendment to
be duly executed as of the day and year first written above.
INTERNATIONAL RECTIFIER CORPORATION
By: /s/ Xxxxxxx X. XxXxx
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Title:
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XXXXX FARGO BANK, N.A.
By: /s/ Xxxxx X. Xxx
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Xxxxx X. Xxx
Title: Vice President
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By: /s/ Xxxxx X. Xxxxxxxxxxxxx
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Xxxxx X. Xxxxxxxxxxxxx
Title: Vice President
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