EXHIBIT 10(x)
[LETTERHEAD]
AMENDMENT TO TERM LOAN AGREEMENT
THIS FIRST AMENDMENT dated as of May 22, 1997, to the Term Loan
Agreement dated as of March 26, 1996 (collectively, the "Agreement") between
SANWA BANK CALIFORNIA (the "Bank") and INTERNATIONAL RECTIFIER CORPORATION
(the "Borrower").
WITNESS THE FOLLOWING:
WHEREAS the Borrower has requested that Bank amend the Agreement to
modify certain covenants and restrictions for a temporary period; and
WHEREAS the Bank is willing to approve such modifications of these
covenants and restrictions for a temporary period;
NOW, THEREFORE, the Bank and the Borrower agree as follows:
1. FINANCIAL CONDITION. The Bank and the Borrower agree that the ratio
of "consolidated Debt to consolidated Effective to Tangible Net Worth"
contained in Section 5.14(b) shall be amended. To that end, Section 5.14(b)
is hereby modified to delete the ratio of 0.90 to 1, and to insert in its
place the following:
"1.00 to 1 for the three months ended June 30, 1997
1.00 to 1 for the six months ended December 31,1997
.95 to 1 for the six months ended June 30, 1998
.90 to 1 for the remainder of the Agreement."
2. FINANCIAL CONDITION. The Bank and the Borrower agree that the
definition of "Consolidated Operating Loss" contained in Section 1.01(b)
shall be amended. To that end, the following language is added to Section
1.01(b):
"For purposes of this covenant, 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."
3. FINANCIAL CONDITION. The Bank and Borrower agree that "net income"
contained in Section 5.14(d) shall be amended. To that end, the following
language is added to Section 5.14(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 the Bank to
enter into this First Amendment and to modify the Agreement in the manner
provided in this First Amendment, the Borrower hereby warrants that (i) the
representations and warranties contained in Section 4 of the Agreement are
true and correct on the date of this First Amendment, and (ii) no Event of
Default, as specified in Section 6 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 First Amendment.
5. AGREEMENT OTHERWISE UNALTERED. Except as expressly modified by
this First Amendment, the Agreement shall continue to be and shall remain in
full force and effect.
IN WITNESS WHEREOF, the Bank and the Borrower by their respective duly
authorized officers or representatives have caused this First Amendment to
be duly executed as of the day and year first written above.
BORROWER:
INTERNATIONAL RECTIFIER CORPORATION
By: /s/ XXXXXXX X. XXXXX
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V.P. + CHIEF FINANCIAL OFFICER
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(Name/Title)
BANK:
SANWA BANK CALIFORNIA
By: /s/ XXXXX X. XXXX
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Xxxxx X. Xxxx, Vice President
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(Name/Title)
