10.3 Third Amendment Agreement to Term Loan Agreement with First Union Bank of
Connecticut
THIRD AMENDMENT AGREEMENT
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AGREEMENT, made as of March 20, 1998, to be effective as of December
31, 1997, between SEMICONDUCTOR PACKAGING MATERIALS CO., INC., a Delaware
corporation, AMERICAN SILICON PRODUCTS, INC., a Delaware corporation, XXXXXX
COMPANY, INC., a California corporation, RETCONN INCORPORATED, a Connecticut
corporation, TYPE III, INC., a California corporation, S.T. ELECTRONICS, INC., a
California corporation, SPM HOLDINGS CORPORATION, a Delaware corporation, and
FIRST UNION NATIONAL BANK, a national banking association, successor in interest
to First Union Bank of Connecticut.
Background
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A. Capitalized terms not otherwise defined shall have the
meanings ascribed to them in the Credit Agreement dated January 23, 1997,
between Semiconductor Packaging Materials Co., Inc. and First Union Bank of
Connecticut (as modified, amended, restated or supplemented from time to time,
the "Credit Agreement")
B. The Bank has extended the Loan to the Borrower in the
aggregate principal amount of up to $36,000,000.
C. On or about September 30, 1997, ASP Realty Company was merged
into American Silicon Products, Inc.
D. The Borrower has requested, among other things, that the
Lender modify certain covenants contained in the Credit Agreement.
E. The Lender has agreed to the requests of the Borrower subject
to the terms and conditions of this Agreement.
Agreement
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In consideration of the foregoing Background, which is incorporated
by reference, the parties, intending to be legally bound, agree as follows:
1. Modifications to Credit Agreement. All of the terms and
conditions contained in the Credit Agreement and the other Credit
Documents shall remain in full force and effect except as follows:
(a) Sections 9.8(a), 9.9, 9.10 and 9.11 of the Credit Agreement are
deleted and the following are substituted therefor:
9.8 Capital Expenditures.
(a) The Borrower,, on a consolidated basis, shall not make
any capital expenditures in excess of $18,000,000 for the 1997
fiscal year (excluding any Capital Expenditures related to the
Acquisition and incurred during the 1997 fiscal year), and in excess
of $8,000,000 for each fiscal year thereafter.
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9.9 Fixed Charge Coverage Ratio. The Borrower, on a consolidated
basis, shall maintain a Fixed Charge Coverage Ratio of not less than 1.2
to 1.0 for the fiscal year ending December 31, 1997 and, for each fiscal
year end subsequent to December 31, 1997, the Borrower shall maintain a
Fixed Charge Coverage Ratio of not less than an amount to be determined
between the Borrower and the Lender; notwithstanding the foregoing, if the
Borrower and the Lender are unable, prior to March 31, 1998 to agree to a
Fixed Charge Coverage Ratio for subsequent fiscal years end, then such
failure shall constitute an Event of Default hereunder.
9.10 Maximum Leverage Ratio. The Borrower, on a consolidated basis,
shall maintain: (a) as at March 31, 1997, June 30, 1997, and September 30,
1997, a Leverage Ratio of not greater than 2.50 to 1.00; (b) as at
December 31, 1997, a Leverage Ratio of not greater than 3.25 to 1.00; and
(c) for each fiscal year end subsequent to December 31, 1997, the Borrower
shall maintain a Leverage Ratio of not greater than an amount to be
determined between the Borrower and the Lender; notwithstanding the
foregoing, if the Borrower and the Lender are unable, prior to March 31,
1998, to agree to a Leverage Ratio for subsequent fiscal years end, then
such failure shall constitute an Event of Default hereunder.
9.11. Interest Coverage Ratio. The Borrower, on a consolidated
basis, shall maintain: (a) for the fiscal quarter ending March 31, 1997,
an Interest Coverage Ratio of not less than 2.50 to 1.00; and (b) for the
portion of the fiscal year ending June 30, 1997, and September 30, 1997,
an Interest Coverage Ratio of not less than 3.75 to 1.00; (c) for the
fiscal year ending December 31, 1997, an Interest Coverage Ratio of not
less than 3.5 to 1.00; and (d) for each fiscal quarter and portion of the
fiscal year ending on such quarter subsequent to December 31,1997, the
Borrower shall maintain an Interest Coverage Ratio of not less than an
amount to be determined between the Borrower and the Lender;
notwithstanding the foregoing, if the Borrower and the Lender are unable,
prior to March 31, 1998, to agree to an Interest Coverage Ratio for such
subsequent periods, then such failure shall constitute an Event of Default
hereunder.
(b) The definition of "Lender" contained in Section 11 of the Credit
Agreement is deleted and the following is substituted therefor:
"Lender" shall mean First Union National Bank, a national banking
association, and its successors and assigns.
2. Modification Fee. In consideration of the Lender's execution,
delivery and performance of this Agreement, the Borrower is simultaneously
paying to the Lender a modification fee of $15,000 in immediately available
funds (the "Modification Fee").
3. Conditions Precedent. The obligation of the Lender under this
Agreement is subject to the receipt and review, to the satisfaction of the
Lender, of the following:
(a) this Agreement duly executed by the parties hereto;
(b) the consent of Fleet National Bank to this Agreement;
(c) the Modification Fee; and
(d) such other agreements and instruments as the Lender
deems necessary.
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4. Reaffirmation by the Borrower. The Borrower acknowledges that
it is legally, validly and enforceably indebted to the Lender under the
Revolving Note and the Term Note, without defense, counterclaim or offset, and
that it is legally, validly and enforceably liable to the Lender for all costs
and expenses of collection and attorneys' fees related to or in any way arising
out of this Agreement, the Credit Agreement, the Revolving Note, the Term Note,
and the other Credit Documents. Except as modified by this Agreement, the
Borrower hereby remakes all representations, warranties and covenants contained
in the Credit Documents and acknowledges that the liens and security interests
granted pursuant to the Security Documents encompass the indebtedness of the
Revolving Note and the Term Note. The Borrower represents that except as
described on Current Report on Form 8-K dated January 6, 1998 of the Borrower
which was filed with the Securities and Exchange Commission, there are no
pending, or to the Borrower's knowledge threatened, legal proceedings to which
the Borrower is a party, which materially or adversely affect the transactions
contemplated by this Agreement or the ability of the Borrower to conduct its
business.
5. Reaffirmation by the Subsidiary Guarantors. Each Subsidiary
Guarantor acknowledges that it is legally and validly indebted to the Lender
under the Subsidiary Guaranty without defense, counterclaim or offset, and
affirms that the Subsidiary Guaranty remains in full force and effect and
includes, without limitation, the indebtedness, liabilities and obligations
arising under, or in any way connected with, the Credit Agreement, the Revolving
Note, the Term Note, this Agreement and the other Credit Documents, whether now
existing or hereafter arising.
6. Other Representations by Borrower and Subsidiary Guarantors.
The Borrower and each of the Subsidiary Guarantors represents and confirms that
no Default or Event of Default has occurred and is continuing, and that the
Lender has not given its consent to or waived any Default or Event of Default
and the Credit Agreement and the other Credit Documents are in full force and
effect and enforceable against the Borrower and the Subsidiary Guarantors in
accordance with the terms thereof. The Borrower and each of the Subsidiary
Guarantors represents and confirms that as of the date hereof, neither the
Borrower nor any of the Subsidiary Guarantors has any claim or defense (and the
Borrower and the Subsidiary Guarantors each hereby waives every claim and
defense) against the Lender arising out of or relating to the Credit Agreement,
this Agreement and the other Credit Documents or the making, administration or
enforcement of the Revolving Note, the Term Note and the Loans and the remedies
provided for under the Credit Agreements.
7. Prejudgment Remedy Waiver: Waivers. THE BORROWER AND EACH OF
THE SUBSIDIARY GUARANTORS ACKNOWLEDGES THAT THE LOANS AND THE TRANSACTIONS
EVIDENCED BY THE REVOLVING NOTE, THE TERM NOTE, THE CREDIT AGREEMENT, THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS ARE COMMERCIAL TRANSACTIONS AND EACH
WAIVES ITS RIGHTS TO NOTICE AND HEARING PRIOR TO THE ISSUANCE OF ANY PREJUDGMENT
REMEDY, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY
PREJUDGMENT REMEDY WHICH THE LENDER MAY DESIRE TO USE, AND FURTHER WAIVES
DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, PROTEST AND
NOTICE OF ANY RENEWALS OR EXTENSIONS. THE BORROWER AND EACH OF THE SUBSIDIARY
GUARANTORS ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, WILLINGLY,
VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE
RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
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8. Jury Trial Waiver THE BORROWER AND EACH OF THE SUBSDIARY
GUARANTORS WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING
ON ANY MATTER ARISING IN CONNECTION WITH, OR IN ANY WAY RELATED TO, THE
FINANCING TRANSACTIONS OF WHICH THE CREDIT AGREEMENT, THE REVOLVING NOTE, THE
TERM NOTE, THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS IS A PART OR THE
ENFORCEMENT OF ANY OF THE LENDER'S RIGHTS. THE BORROWER AND EACH OF THE
SUBSIDIARY GUARANTORS ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY,
WILLINGLY, VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER EXTENSIVE
CONSIDERATION OF THE RAMEFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
9. Governing Law. The Agreement shall be governed by, and
construed in accordance with, the laws of the State of Connecticut.
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The parties have executed this Agreement as of the date first written above.
Borrower:
SEMICONDUCTOR PACKAGING
MATERIALS CO., INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Treasurer and Secretary
Subsidiary Guarantors:
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AMERICAN SILICON PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer and
Assistant Secretary
XXXXXX COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Treasurer and Secretary
RETCONN INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Treasurer and Secretary
TYPE III, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Treasurer and Secretary
S.T. ELECTRONICS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Treasurer and Secretary
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SPM HOLDINGS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Treasurer and Secretary
Lender:
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FIRST UNION NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President