SECOND AMENDMENT TO THE CREDIT AGREEMENT
SECOND AMENDMENT, dated as of June 22, 1999 (this "Second
Amendment"), to the Credit Agreement, dated as of July 23, 1997 (as amended,
supplemented, or otherwise modified from time to time, the "Credit Agreement"),
among GENERAL SEMICONDUCTOR, INC., a Delaware corporation (the "Company"), the
several lenders from time to time parties thereto (the "Banks"), THE CHASE
MANHATTAN BANK, a New York banking corporation, as administrative agent for the
Banks (in such capacity, the "Administrative Agent"), and the financial
institutions named therein as co-agents for the Banks (in such capacity,
collectively, the "Co-Agents"; each, individually, a "Co-Agent").
W I T N E S S E T H:
WHEREAS, the Company, the Banks, the Administrative Agent and
the Co-Agents are parties to the Credit Agreement;
WHEREAS, the Company has requested that the Banks amend the
Credit Agreement as set forth herein;
WHEREAS, the Banks, the Administrative Agent and the Co-Agents
are willing to agree to such amendment to the Credit Agreement, subject to the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the Company, the Banks, the Administrative Agent and
the Co-Agents hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein,
capitalized terms which are defined in the Credit Agreement are used herein as
therein defined.
2. Amendments to Credit Agreement. (a) Subsection 1.1
of the Credit Agreement is hereby amended by deleting the definition of
"Applicable Margin" and substituting therefor the following:
"Applicable Margin": for each Eurodollar Loan, each ABR Loan,
the Facility Fee and the Standby L/C fees, the rate per annum determined from
time to time based upon the Leverage Ratio determined as of the last day of the
most recent fiscal quarter for which the Company has delivered financial
statements pursuant to subsections 6.1(a) and (b) and the related certificate of
the chief financial officer of the Company referred to in subsection 6.2 as set
forth under the relevant column heading below opposite such Leverage Ratio:
(in basis points)
Eurodollar ABR Loan Standby
Leverage Ratio Applicable Applicable Facility L/C
Margin Margin Fee Fee
Less than 1.5 to 1.0 36.25 0 18.75 36.25
Less than 2.0 to 1.0 but
greater than or equal to 1.5
to 1.0 42.50 20.00 42.50
Less than 2.25 to 1.0 but
greater than or equal to 2.0
to 1.0 52.50 0 22.50 52.50
Less than 2.75 to 1.0 but
greater than or equal to 2.25
to 1.0 60.00 0 25.00 60.00
Less than 3.0 to 1.0 but
greater than or equal to 2.75
to 1.0 70.00 0 30.00 70.00
Less than 3.5 to 1.0 but
greater than or equal to 3.0 to
1.0 112.50 12.5 37.50 112.50
Less than 3.75 to 1.0 but
greater than or equal to 3.5
to 1.0 130.00 30.0 45.00 130.00
Less than 4.0 to 1.0 but
greater than or equal to 3.75
to 1.0 150.00 50.0 50.00 150.00
Less than 4.25 to 1.0 but
greater than or equal to 4.0
175.00 75.0 50.00 175.00
Greater than or equal to 4.25
to 1.0 200.00 100.0 50.00 200.00
For the purpose of this Agreement, any change in the Eurodollar Loan Applicable
Margin, the ABR Loan Applicable Margin, the Facility Fee and the Standby L/C
fees shall become effective on the day following the delivery to the
Administrative Agent by the Company of the financial statements referred to in
subsections 6.1(a) and (b) and the related certificate of the chief financial
officer of the Company referred to in subsection 6.2 indicating the Leverage
Ratio as of the last day of such period. If the Company shall fail to deliver
the financial statements referred to in subsections 6.1(a) and (b) and the
related certificate of the chief financial officer of the Company referred to in
subsection 6.2 indicating the Leverage Ratio as of such last day, then the
Applicable Margin, Facility Fee and Standby L/C fee shall automatically, and
without further act of the Administrative Agent, the Co-Agents or any Bank,
equal the highest Applicable Margin, Facility Fee and Standby L/C fee set forth
above until such statements are delivered. In addition, the Applicable Margin
for Eurodollar Loans and ABR Loans and the Standby L/C fee shall increase (i) by
.50% per annum on the Effective Date (as defined in the Second Amendment dated
as of June 22, 1999 to this Agreement) and (ii) by an additional .50% per annum
on November 16, 1999, provided that all increases in the Applicable Margin
pursuant to this sentence shall cease to be effective on and after the Senior
Subordinated Note Trigger Date.
(b) The definition of "Consolidated EBITDA" in subsection
1.1 of the Credit Agreement is hereby amended (other than for purposes of
calculating the Applicable Margin) by (i) amending the phrase "and (e)"
appearing therein to read A, (e)" and (ii) inserting the following new clause at
the end thereof:
and (f) if the Senior Subordinated Note Trigger Date has
occurred, all of the Company's restructuring and other charges principally
associated with a restructuring of a portion of the Company's European
operations in an aggregate amount not to exceed $9,000,000 for the two fiscal
quarter period ended December 31, 1999;
(c) Subsection 1.1 of the Credit Agreement is hereby amended
by deleting the definition of "Obligations" and substituting therefor the
following:
"Obligations": the collective reference to (i) the unpaid
principal of and interest on the Loans and all other obligations and liabilities
of the Company to the Administrative Agent, the Co-Agents or the Banks, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter incurred, which may arise under, out of, or in connection with,
this Agreement, the other Credit Documents, any Letter of Credit or L/C
Application, any agreements between the Company and any Bank or any Affiliate of
a Bank relating to interest rate, currency or similar swap and hedging
arrangements or any other document made, delivered or given in connection
therewith, whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent, the Co-Agents or any Bank)
or otherwise and (ii) all overdrafts, overdraft charges, ACH charges and similar
amounts owed by the Company or any of its Subsidiaries to the Administrative
Agent, any Co-Agent or any Bank (the obligations referred to in this clause
(ii), the "Overdraft Obligations").
(d) Subsection 1.1 of the Credit Agreement is amended by
adding the following definitons in proper alphabetical order:
"Security Documents": the Pledge Agreements and each other
security agreement, mortgage, pledge agreement or other collateral security
document delivered by the Company or any of its Subsidiaries which purports to
create a lien or security interest to secure any of the Obligations or any
guarantee thereof.
"Senior Leverage Ratio": as of the last day of any fiscal
quarter the ratio of (a) Consolidated Total Indebtedness less the aggregate
principal amount of the Senior Subordinated Notes then outstanding on a
consolidated basis for the Company and its Subsidiaries on such day to (b)
Consolidated EBITDA for the period of four consecutive fiscal quarters of the
Company ending on such day.
"Senior Subordinated Note Indenture": the Indenture to be
entered into by the Company and certain of its Subsidiaries in connection with
the issuance of the Senior Subordinated Notes, together with all instruments and
other agreements entered into by the Company or such Subsidiaries in connection
therewith, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with subsection 7.19.
"Senior Subordinated Note Issuance Date": the first date on
which the Senior Subordinated Notes are issued.
"Senior Subordinated Note Trigger Date": the first date on
which the Company has received at least $150,000,000 in gross cash proceeds from
the issuance of the Senior Subordinated Notes.
"Senior Subordinated Notes": the subordinated notes
(including any exchange notes) of the Company to be issued pursuant to the
Senior Subordinated Note Indenture.
(e) Subsection 3.6 of the Credit Agreement is amended by
deleting from paragraph (b) the phrase ", provided ..." to the end of such
paragraph and substituting therefor the phrase "plus the Applicable Margin for
"BR Loans."
(f) Section 4 of the Credit Agreement is amended by adding
the following new subsections 4.20 and 4.21 at the end thereof:
4.20 Seniority. On and after the Senior Subordinated Note
Issuance Date, the Obligations will constitute "Senior Indebtedness" of the
Company under and as defined in the Senior Subordinated Note Indenture. The
obligations of each Subsidiary Guarantor under each Credit Document to which it
is a party constitute "Senior Indebtedness" of such Subsidiary Guarantor under
and as defined in the Senior Subordinated Note Indenture.
4.21. Year 2000 Matters. Any reprogramming required to
permit the proper functioning, in and following the year 2000, of the Company's
computer systems and equipment containing embedded microchips, and the testing
of all such systems and equipment, as so reprogrammed, will be completed by
September 30, 1999. The testing of all such systems and equipment, as so
reprogrammed, will be accomplished in a manner and by a date that could not
reasonably be expected to result in a Material Adverse Effect. The cost to the
Company of any such reprogramming and testing and of the reasonably foreseeable
consequences of year 2000 to the Company (including, without limitation,
reprogramming errors and the failure of others' systems or equipment) could not
reasonably be expected to result in a Default or a Material Adverse Effect.
Except for such of the reprogramming referred to in the preceding sentence as
may be necessary, the computer and management information systems of the Company
and its Subsidiaries will be and, with ordinary course upgrading and
maintenance, will continue to be, sufficient to permit the Company to conduct
its business without Material Adverse Effect. The foregoing representation shall
be qualified as to the status of year 2000 matters with respect to third parties
that, to the knowledge of the Company after reasonable inquiry, such matters
could not be reasonably expected to result in a
Material Adverse Effect.
(g) Subsection 6.2(a) of the Credit Agreement is amended by
deleting the phrase "and 7.9" in clause (i) thereof and substituting in lieu
thereof the phrase ",7.9 and 7.20".
(h) Subsection 6.2(b) of the Credit Agreement is amended by
deleting the phrase "and 7.9" in clause (ii) thereof and substituting in lieu
thereof the phrase ",7.9 and 7.20".
(i) Section 6 of the Credit Agreement is amended by deleting
subsection 6.8 and substituting therefor the following:
6.8 Additional Collateral, etc. (a) Cause each Domestic
Subsidiary to execute and deliver a Subsidiary Guarantee in favor of the
Administrative Agent in substantially the form of Exhibit D, each of which
Subsidiary Guarantees shall be accompanied by such resolutions, incumbency
certificates and legal opinions as are reasonably requested by the
Administrative Agent and its counsel.
(b) With respect to any property owned or acquired by the
Company or any of its Subsidiaries (other than (x) any property described in
paragraph (c), (d) or (e) below, (y) any property subject to a Lien expressly
permitted by subsection 7.2(g), (i), (n) or (o) and (z) property owned or
acquired by any Foreign Subsidiary) as to which the Administrative Agent, for
the benefit of the Lenders, does not have a perfected Lien, promptly take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest (subject to
Liens permitted by subsection 7.2 which may have priority, if any) in such
property, including the filing of Uniform Commercial Code financing statements
in such jurisdictions as may be requested by the Administrative Agent; provided,
that the Company and its Subsidiaries shall not be required to grant any such
security interest in any contract, agreement, license or instrument, in each
case to the extent, and only to the extent, the grant by the Company or such
Subsidiary of a security interest pursuant to any Security Document in its
right, title and interest in such contract, agreement, license or instrument is
prohibited by such contract, agreement, license or instrument without the
consent of any other party thereto, would give any other party to such contract,
agreement, license or instrument the right to terminate its obligations
thereunder, or is permitted with consent if all necessary consents to such grant
of a security interest have been obtained from the other parties thereto (it
being understood that the foregoing shall not be deemed to obligate the Company
or such Subsidiary to obtain such consents); provided further, that the
foregoing limitation shall not affect, limit, restrict or impair the grant of by
the Company or such Subsidiary of a security interest pursuant to this Agreement
in any receivable or any money or other amounts due or to become due under any
such contract, agreement, license or instrument.
(c) With respect to any interest in real property having a
value (together with improvements thereof) of at least $500,000 individually or
$2,000,000 in the aggregate owned or acquired by the Company or any of its
Subsidiaries (other than (w) leasehold interests set forth on Schedule 6.8
unless the consent of the applicable landlord is obtained to the granting of a
Lien thereon pursuant to this subsection, (x) any such real property subject to
a Lien expressly permitted by subsection 7.2(g) or (n) and (y) real property
owned or acquired by any Foreign Subsidiary), promptly (i) execute and deliver a
first priority mortgage or deed of trust in the Administrative Agent's customary
form therefor, in favor of the Administrative Agent, for the benefit of the
Lenders, covering such real property, (ii) if requested by the Administrative
Agent, provide the Lenders with (x) title and extended coverage insurance
covering such real property in an amount at least equal to the purchase price of
such real property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
mortgage or deed of trust, including (other than with respect to the leasehold
interests set forth in Schedule 6.8) lessor and landlord consents in the
Administrative Agent's customary forms therefor, each of the foregoing in form
and substance reasonably satisfactory to the Administrative Agent and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(d) With respect to any Subsidiary (other than a Foreign
Subsidiary) owned or acquired by the Company (which, for the purposes of this
paragraph (d), shall include any existing Subsidiary that ceases to be a Foreign
Subsidiary), the Company or any of its Subsidiaries, promptly (i) execute and
deliver to the Administrative Agent such pledge agreements in the Administrative
Agent's customary form therefor as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by the Company or any of its Subsidiaries, (ii) deliver
to the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Company or such Subsidiary, as the case may be, (iii)
cause such Subsidiary to take such actions necessary or advisable to grant to
the Administrative Agent for the benefit of the Lenders a perfected first
priority security interest in substantially all of its assets, including the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be requested by the Administrative Agent and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(e) With respect to any Foreign Subsidiary owned or acquired
by the Company or any of its Subsidiaries (other than a Foreign Subsidiary),
promptly (i) execute and deliver to the Administrative Agent such pledge
agreement in the Administrative Agent's customary form therefor as the
Administrative Agent deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in the Capital Stock of such Foreign Subsidiary that is owned by the
Company or any of such Subsidiaries (provided that in no event shall more than
65% of the total outstanding Capital Stock of any such Foreign Subsidiary be
required to be so pledged), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Company or such Subsidiary, as the case may be, and take such other action as
may be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Administrative Agent's security interest therein, and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(f) In the event that there shall be a Change in Law which
eliminates the adverse tax consequences from (A) the pledge of more than 65% of
the total outstanding Capital Stock any Foreign Subsidiary or (B) any Foreign
Subsidiary granting any of the Liens or guaranteeing payment of the Obligations
on the same terms as required for Domestic Subsidiaires in the preceding
paragraphs (a) through (d), the Company shall promptly thereafter (i) pledge and
deliver, or shall cause to be pledged and delivered, to the Administrative Agent
such additional stock as can be so pledged without adverse tax consequences and
(ii) cause any such Foreign Subsidiary that has not previously granted such
Liens or executed and delivered a Guarantee because of such adverse tax
consequences to grant such Liens and deliver Security Documents and a Guarantee
to the Administrative Agent to the extent any such Security Documents and
Guarantee can be so executed and delivered without adverse tax consequences to
the Company or any of its Subsidiaries.
(j) Notwithstanding the foregoing provisions of this
subsection 6.8, upon the reasonable request of the Administrative Agent, the
Company shall, and shall cause its Subsidiaries to:
(i) Prior to the Senior Subordinated Note Trigger
Date (A) pledge more than 65% of the total outstanding Capital Stock of any
Foreign Subsidiary and (B) cause its Foreign Subsidiaries to deliver guarantees
and grant Liens on their assets to the extent that Domestic Subsidiaries are
required to do so pursuant to paragraphs (a) through (d) above, if the
Administrative Agent believes that the cost (including incremental tax costs) to
the Company and its Subsidiaries in doing so are not disproportionate to the
benefits to be obtained (including the benefits of any purported Liens)
therefrom by the Banks.
(ii) On and after the Senior Subordinated Note
Trigger Date (A) pledge more than 65% of the total outstanding Capital Stock of
any Foreign Subsidiary and (B) cause its Foreign Subsidiaries to deliver
guarantees and grant Liens on their assets to the extent that Domestic
Subsidiaries are required to do so pursuant to paragraphs (a) through (d) above,
if the Company and the Administrative Agent mutually agree, acting in a
commercially reasonable manner, that the cost (including incremental tax costs)
to the Company and its Subsidiaries in doing so are not disproportionate to the
benefits to be obtained (including the benefits of any purported Liens)
therefrom by the Banks.
(k) Upon the request of the Administrative Agent, promptly
perform or cause to be performed any and all acts and execute or cause to be
executed any and all documents (including, without limitation, financing
statements and continuation statements) for filing under the provisions of any
Requirement of Law which are necessary or advisable to maintain in favor of the
Administrative Agent, for the benefit of the Banks, Liens on any collteral
under the Security Documents that are duly accepted in accordance with all
applicable Requirements of Law.
(l) Subsection 7.2 of the Credit Agreement is hereby amended
by (i) deleting the word "and" from the end of clause (m), (ii) deleting the
period at the end of clause (n) and substituting therefor the phrase "; and" and
(iii) adding the following new clause (o):
(o) Liens on inventory consigned by the Borrower
and Domestic Subsidiaries having a book value not in excess of $3,000,000.
(m) Subsection 7.3 of the Credit Agreement is amended by
(i) deleting the word "and" from the end of clause (f), (ii) deleting the period
at the end of clause (g) and substituting therefor the phrase "and" and (iii)
adding thereto the following new clause (h):
(h) Guarantee Obligations of the Subsidiary
Guarantors in respect of the Senior Subordinated Notes, provided that such
Guarantee Obligations are subordinated to the Subsidiary Guarantees to the same
extent as the obligations of the Borrower in respect of the Senior Subordinated
Notes are subordinated to the Obligations.
(n) Subsection 7.6 of the Credit Agreement is amended by
adding the following at the end of paragraph (c) thereof:
and provided further, no acquisition may be made
pursuant to this paragraph (c) until the Senior Subordinated Note Trigger Date
has occurred;
(o) Subsections 7.8 and 7.9 of the Credit Agreement are
amended by deleting such subsections and substituting therefor the following:
7.8 Maintenance of Interest Coverage. Prior to the Senior
Subordinated Note Issuance Date, permit the Interest Coverage Ratio on the last
day of any fiscal quarter, commencing with the fiscal quarter ending June 30,
1999, to be less than 3.0:1.0.
7.9 Maintenance of Leverage Ratio. Prior to the Senior
Subordinated Notes Issuance Date, permit, as of the last day of any fiscal
quarter occuring during any period set forth below, the Leverage Ratio to be
greater than the ratio set forth opposite such period:
Period Ratio
April 1, 1999 - September 30, 1999 4.60:1.0
October 1, 1999 - December 31, 1999 4.35:1.0
January 1, 2000 - March 31, 2000 4.00:1.0
April 1, 2000 - June 30, 2000 3.75:1.0
July 1, 2000 and thereafter 3.50:1.0
(p) Subsection 7.14 of the Credit Agreement is hereby amended
by deleting clause (b) and substituting therefor the following:
(b) Indebtedness of the Company consisting of the Senior
Subordinated Notes as long as (i) the aggregate principal amount of the Senior
Subordinated Notes does not exceed $250,000,000, (ii) the Senior Subordinated
Notes are issued at par or at a discount or premium not giving rise to original
issue discount under the Code, (iii) the Senior Subordinated Notes contain
covenants, events of default and remedies as are then customary for senior
subordinated unsecured debt securities issued in a public offering or a Rule
144A transaction and in any event no more restrictive than those contained
herein, (iv) the Senior Subordinated Notes have no scheduled principal payments
prior to the seventh anniversary of the date of issuance thereof and are subject
to no mandatory prepayments or redemptions or offers to purchase except for
those based on a change of control or asset sales on terms as are then customary
for senior unsecured debt securities issued in a public offering or a Rule 144A
transaction and (v) the Senior Subordinated Notes contain subordination
provisions satisfactory to the Administrative Agent (the Senior Subordinated
Notes shall be deemed to comply with this paragraph (b) unless the Required
Banks or the Administrative Agent notify the Company within five Business Days
after their receipt of the preliminary offering memorandum (or any draft thereof
containing substantially the same terms as are set forth in such preliminary
offering memorandum) for the Senior Subordinated Notes that the senior
subordinated notes described therein do not comply with this paragraph (b), the
Company hereby agreeing to distribute such preliminary offering memorandum to
the Banks promptly following the printing thereof);
(q) Subsection 7.18 of the Credit Agreement is hereby amended
by (i) deleting the phrase "or (c)" and substituting therefor the phrase ",(c)"
and (ii) adding at the end of clause (c) the phrase:
or (d) the Senior Subordinated Note Indenture (in which case, any
prohibition or limitation shall not limit the ability of the Company and its
Subsidiaries to provide collateral security for the Obligations and guarantees
thereof or limit the ability of Subsidiaries to make payments to the Company)
(r) Section 7 of the Credit Agreement is hereby amended by
adding the following new subsections 7.19 and 7.20:
7.19 Optional Payments and Modifications of Senior
Subordinated Note Indenture. (a) Make or offer to make any optional or
voluntary payment, prepayment, repurchase or redemption of or otherwise
optionally or voluntarily defease or segregate funds with respect to the Senior
Subordinated Notes, (b) amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, any of the
terms of the Senior Subordinated Notes (other than any such amendment,
modification, waiver or other change that (i) would extend the maturity or
reduce the amount of any payment of principal thereof or reduce the rate or
extend any date for payment of interest thereon and (ii) does not involve the
payment of a consent fee), or (c) designate any Indebtedness (other than
obligations of the Loan Parties pursuant to the Credit Documents) as "Designated
Senior Indebtedness" for the purposes of the Senior Subordinated Note Indenture.
7.20 Financial Covenants On and After Senior Subordinated
Note Issuance Date. On and after the Senior Subordinated Note Issuance Date:
(a) Maintenance of Interest Coverage. Permit the
Interest Coverage Ratio on the last day of any fiscal quarter to the be less
than 2.5:1.0.
(b) Maintenance of Leverage Ratio. Permit, as of
the last day of any fiscal quarter occuring during any period set forth below,
the Leverage Ratio to be greater than the ratio set forth opposite such period:
Period Ratio
April 1, 1999 - December 31, 1999 5.00:1.0
January 1, 2000 - June 30, 2000 4.50:1.0
July 1, 2000 and thereafter 4.00:1.0
(c) Maintenance of Senior Leverage Ratio. Permit,
as of the last day of any fiscal quarter occuring during any period set forth
below, the Senior Leverage Ratio to be greater than the ratio set forth opposite
such period:
Period Ratio
April 1, 1999 - December 31, 1999 2.50:1.0
January 1, 2000 - June 30, 2000 2.25:1.0
July 1, 2000 and thereafter 2.00:1.0
(s) Section 8 of the Credit Agreement is hereby amended by
deleting from paragraph (i) each reference to "Pledge Agreement" and
substituting therefor each time the phrase "Security Document".
(t) Section 8 of the Credit Agreement is amended by adding
the following at the end of paragraph (j):
or (iii) a change of control, however denominated, shall occur under
the Senior Subordinated Note Indenture; or
(u) Section 8 of the Credit Agreement is amended by adding
the following new paragraph (k) at the end thereof:
(k) on and after the Senior Subordinated Note Issuance Date,
the Senior Subordinated Notes or the guarantees thereof shall cease, for any
reason, to be validly subordinated to the Obligations or the obligations of the
Subsidiary Guarantors under the Credit Documents, as the case may be, as
provided in the Senior Subordinated Note Indenture, or any Loan Party, any
Affiliate of any Loan Party, the trustee in respect of the Senior Subordinated
Notes or the holders of at least 25% in aggregate principal amount of the Senior
Subordinated Notes shall so assert;
(v) The Company agrees that no amendment, supplement or
modification of any Credit Document shall release any Subsidiary from any
Security Document to which it is a party without the written consent of the
Release Banks, except as otherwise provided, notwithtstanding any provisions to
the contrary set forth in subsection 10.1 of the Credit Agreement.
(w) Section 10 of the Credit Agreement is amended by adding
thereto the following new subsection 10.14:
10.14 Overdraft Obligations. The Banks (for
themselves and their respective Affiliates) agree that it is their intention
that only $3,000,000 of the Overdraft Obligations be guaranteed and secured
ratably and on a pari passu basis with the other Obligations (i.e., those
described in clause (i) of the definiton of Obligations) (the "Primary
Obligations") and that the balance of the Overdraft Obligations in excess of
$3,000,000 be subordinated to the Primary Obligations. To the extent the
Overdraft Obligations exceed $3,000,000 each Bank's (and its Affiliates')
Overdraft Obligations shall be entitled to share ratably and on a pari passu
basis in the Subsidiary Guarantees and collateral under the Security Documents
with the Primary Obligations in an amount equal to the product of (a) $3,000,000
and (b) the decimal equivalent of (i) the amount of the Overdraft Obligations
owed to such Bank and its Affiliates divided by (ii) the aggregate amount of all
Overdraft Obligations. Payment of any Overdraft Obligations pursuant to any
Subsidiary Guarantee or from any collateral under the Security Documents shall
be subordinated to the prior payment of the Primary Obligations except to the
extent set forth in the two preceding sentences.
3. Reduction of Revolving Credit Commitments. The
aggregate Revolving Credit Commitments shall automatically and irrevocably be
reduced on each day on which Senior Subordinated Notes are issued by an amount
equal to 50% of the gross cash proceeds of such Senior Subordinated Notes, on
the tems set forth in subsection 3.3 of the Credit Agreement.
4. Obligations to Issue Senior Subordinated Notes.
The Company agrees to use its commercially reasonable efforts to issue at least
$200,000,000 aggregate principal amount of Senior Subordinated Notes on or prior
to November 15, 1999. The Company agrees to engage one or more investment banks
(collectively, the "Investment Bank") reasonably satisfactory to the
Administrative Agent to publicly sell or privately place up to $250,000,000
aggregate principal amount of Senior Subordinated Notes of the Company on or
prior to November 15, 1999.
5. Representations and Warranties. The Company hereby
confirms, reaffirms and restates the representations and warranties set forth in
Section 4 of the Credit Agreement, as amended by this Second Amendment. The
Company represents and warrants that, after giving effect to this Second
Amendment, no Default or Event of Default has occurred and is continuing.
6. Effectiveness. Upon receipt by the Administrative
Agent of counterparts of this Second Amendment duly executed by the Company and
the Required Banks, this Second Amendment shall become effective as of the date
(the "Effective Date") of receipt by the Administrative Agent of such
counterparts. The Applicable Margin on and after the Effective Date shall be
recalculated to give effect to the amendment to the Credit Agreement set forth
in Section 2(a) above.
7. Delivery of Collateral. Notwithstanding the
requirement of subsection 6.8 of the Credit Agreement, as amended by this Second
Amendment, the failure of the Company and its Subsidiaries to take any action
required by such subsection, as so amended, prior to the day which is 60 days
after the Effective Date shall not constitute a Default to the extent that the
taking of such action was not required under such subsection prior to the
effectiveness of this Second Amendment.
8. Amendment Fee. The Company will pay to the
Administrative Agent, for the account of each Lender which executes and returns
this Second Amendment to the Administrative Agent on or prior to the Effective
Date, an amendment fee equal to .25% of the Revolving Credit Commitment of such
Lender in effect on the Effective Date, such fee to be payable on the Effective
Date.
9. Continuing Effect of the Credit Agreement. This
Second Amendment shall not constitute an amendment of any other provision of the
Credit Agreement not expressly referred to herein and shall not be construed as
a waiver or consent to any further or future action on the part of the Company
that would require a waiver or consent of the Banks, the Administrative Agent or
the Co-Agents. Except as expressly amended hereby, the provisions of the Credit
Agreement are and shall remain in full force and effect.
10. Counterparts. This Second Amendment may be executed
by the parties hereto in any number of separate counterparts (including
telecopied counterparts), each of which shall be deemed to be an original, and
all of which taken together shall be deemed to constitute one and the same
instrument.
11. GOVERNING LAW. THIS SECOND AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Second Amendment to be duly executed and delivered in New York, New York by
their respective proper and duly authorized officers as of the day and year
first above written.
GENERAL SEMICONDUCTOR, INC.
By:Xxxxxxx X. Xxxxxx
Title: Vice President, Treasurer
THE CHASE MANHATTAN BANK, as
Administrative Agent, as a Co-Agent
and as a Bank
By:Xxxxxx X.Xxxxxxx
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Co-Agent and as a Bank
By: Xxxxx Xxxxxxxxxxx
Title: Managing Director
BANK OF MONTREAL, as a Co-Agent and as a Bank
By: Xxxxxxx XxXxxxxx
Title: Director
THE BANK OF NOVA SCOTIA, as a Co-Agent
and as a Bank
By: J. Xxxx Xxxxxxx
Title: Authorized Signatory
CIBC INC., as a Co-Agent and as a Bank
By: Xxxx X. Xxxxxxx
Title: Managing Director CIBC World Markets Corp.,
As Agent
CREDIT LYONNAIS NEW YORK BRANCH, as
a Co-Agent and as a Bank
By: Xxxxx X. Xxxxxxxxx
Title: Vice President
FLEET NATIONAL BANK, as a Co-Agent and as a Bank
By: Xxxxxx Xxxx Jr.
Title: Senior Vice President
WACHOVIA BANK, N.A., as a Co-Agent and as a Bank
By: Xxxx X. Xxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK
By: Xxxxx Xxxxx
Title: Vice President
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: Xxx Xxxxx
Title: Vice President
BANKBOSTON, N.A.
By: Xxxx Xxxxxx
Title: Vice President
BANQUE NATIONALE DE PARIS
By: Xxxxxxx Xxxx Xxxxxx Xxxxxx
Title: Vice President Vice President
PARIBAS
By: Xxxxx Xxxxxxxxx Xxxxx X. Sergeant
Title: Vice Preisdent Associate
CREDIT AGRICOLE INDOSUEZ
By: Xxxxx XxXxxxxxxx
Title: Vice President
By: Xxxx XxXxxxx
Title: Vice President
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By: Jun Ebihara
Title: Deputy General Manager
THE SANWA BANK LIMITED, CHICAGO BRANCH
By: Xxxxxxx X. Xxxxxxxx
Title: First Vice President and
Assistant General Manager
SOCIETE GENERALE, NEW YORK BRANCH
By: Xxxxx Xxxxxx
Title: Director
THE SUMITOMO BANK, LTD., CHICAGO BRANCH
By: Xxxx X. Xxxxxx
Title: Senior Vice President
Schedule 6.8
Leased Properties
00 Xxxxxxxx Xxxx Xxxx
Xxxxxxxx, X.X.
000X Xxxxx Xxxxxx
Xxxxxxxx, X.X.
000 Xxxxx Xxxxxx
Xxxxxxxx, X.X.
000 Xxxxxx Xxxxxx (14,000 sq.ft.)
Melville, N.Y.
000 Xxxxxx Xxxxxx (15 ft. strip)
Melville, N.Y.
00000 Xxxx Xxxxxxx Xxxx.
Xxxxxxxx, XX (Sublease)
