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SECOND AMENDMENT
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
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Second Amendment dated as of June 26, 1998 to Amended and Restated
Revolving Credit Agreement (the "Second Amendment"), by and among FLEXTRONICS
INTERNATIONAL USA, INC., a California corporation (the "Borrower"), BANKBOSTON,
N.A. (formerly known as The First National Bank of Boston) and the other lending
institutions listed on Schedule 1 to the Credit Agreement (as hereinafter
defined) (the "Banks"), amending certain provisions of the Amended and Restated
Revolving Credit Agreement dated as of January 14, 1998 (as amended and in
effect from time to time, the "Credit Agreement") by and among the Borrower, the
Banks and BankBoston, N.A. as agent for the Banks (the "Agent"). Terms not
otherwise defined herein which are defined in the Credit Agreement shall have
the same respective meanings herein as therein.
WHEREAS, the Borrower and the Banks have agreed to modify certain terms and
conditions of the Credit Agreement as specifically set forth in this Second
Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ss.1. Amendment to Section 1.1 of the Credit Agreement. Section 1.1 of the
Credit Agreement is hereby amended as follows:
(a) the definition of "Applicable Margin" is hereby amended by deleting
such definition in its entirety and restating it as follows:
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a
"Rate Adjustment Period"), the Applicable Margin shall be the applicable
margin set forth below with respect to FIL's Pricing Leverage Ratio, as
determined for the fiscal period of FIL and its Subsidiaries ending
immediately prior to the applicable Rate Adjustment Period.
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Base Eurodollar Letter of Acceptance Fee Commitment
Level Pricing Leverage Ratio Rate Rate Credit Rate Fee
Loans Loans Fees Rate
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I Less than 1.50:1.00 0 50.00 50.00 50.00 20.00
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II Equal to or greater than 0 62.50 62.50 62.50 20.00
1.50:1.00 but less than
2.00:1.00
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III Equal to or greater than 0 87.50 87.50 87.50 25.00
2.00:1.00 but less than
2.50:1.00
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IV Equal to or greater than 0 112.50 112.50 112.50 25.00
2.50:1.00 but less than
3.00:1.00
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V Equal to or greater than 0 137.50 137.50 137.50 25.00
3.00:1.00 but less than
3.50:1.00
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VI Equal to or greater than 0 162.50 162.50 162.50 25.00
3.50:1.00 but less than
4.00:1.00
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VII Equal to or greater than 0 187.50 187.50 187.50 25.00
4.00:1.00
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Notwithstanding the foregoing, (a) for purposes of interest on
Revolving Credit Loans outstanding, the Letter of Credit Fees, the
Acceptance Fee Rate and the Commitment Fee Rate payable during the period
commencing on June 26, 1998 through the date immediately preceding the
first Adjustment Date to occur after the fiscal quarter ended June 26,
1998, the Applicable Margin shall be at Level III set forth above, and (b)
if the Borrower fails to deliver any Compliance Certificate pursuant to
ss.9.4(a) hereof then, for the period commencing on the next Adjustment
Date to occur subsequent to such failure through the date immediately
following the date on which such Compliance Certificate is delivered, the
Applicable Margin shall be at the highest Applicable Margin set forth
above.
(b) the definition of "Excluded Subsidiaries" is hereby amended by deleting
such definition in its entirety and restating it as follows:
Excluded Subsidiaries. Collectively, Astron Technologies Ltd.,
Flextronics Industrial (Shenzhen) Limited, Flextronics Computer (Shekou)
Limited, Zhuhai Daomen ▇▇▇▇ ▇▇ Technology Co. Ltd., Zhuhai Daomen ▇▇▇▇ ▇▇
Electronics Co. Ltd., Flex Asia (UK) Ltd., EnergiPilot AB, Proactive, Inc.,
Marathon Business Park LLC, any Unrestricted Subsidiary and any other
Subsidiary formed or acquired after the Closing Date and which is not
required to become a Guarantor pursuant to ss.9.14 hereof and which does
not elect to become a Guarantor pursuant to ss.7 hereof; provided, however,
to the extent any Person which is an Excluded Subsidiary hereunder
subsequently elects or is otherwise required to become a Guarantor
hereunder and complies with ss.7.3 hereof, such Person shall cease being an
Excluded Subsidiary hereunder on the date all the conditions of ss.7.3 have
been satisfied.
(c) the definition of "Total Funded Indebtedness" is hereby amended by
deleting the words "less the sum of (a) cash of FIL and its Subsidiaries
existing on the date of determination plus (b) Investments of FIL and its
Subsidiaries made pursuant to ss.10.3(a), (b) or (c) of the FIL Credit
Agreement" from such definition;
(d) by inserting the following definitions in the appropriate alphabetical
order:
Pricing Leverage Ratio. As at any date of determination, the ratio of
(a) Total Pricing Funded Indebtedness of FIL and its Subsidiaries
outstanding on such date to (b) the EBITDA of FIL and its Subsidiaries for
the period of four (4) consecutive fiscal quarters (treated as a single
accounting period) most recently ended on such date.
Restricted Subsidiary. Any Subsidiary of FIL which is not an
Unrestricted Subsidiary. Neither FIL nor any Subsidiary shall have the
right to change the status of a Restricted Subsidiary to an Unrestricted
Subsidiary, but FIL or any Subsidiary shall have the right to change the
status of an Unrestricted Subsidiary to a Restricted Subsidiary, subject to
compliance with the provisions of ss.9.14 hereof.
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Total Pricing Funded Indebtedness. All Indebtedness of FIL and its
Subsidiaries for borrowed money (including without limitation, all
guarantees by such Person of Indebtedness of others for borrowed money),
purchase money Indebtedness and with respect to Capitalized Leases,
determined on a consolidated basis in accordance with generally accepted
accounting principles, less the sum of (a) cash of FIL and its Subsidiaries
existing on the date of determination plus (b) Investments of FIL and its
Subsidiaries made pursuant to ss.10.3(a), (b) or (c) of the FIL Credit
Agreement.
Unrestricted Subsidiary. Collectively, (a) Neutronics Electronic
Industries Holdings AG, Althofen Electronics GmbH, HTR Technical Resources
Kft, Ecoplast Kft, Conexao Informatica Ltda, Flextronics do Brazil
Servicios Ltda and (b) any other Subsidiary of FIL, direct or indirect, as
to which (i) such Subsidiary conducts substantially all of its business in
countries other than the United States of America and is organized under
the laws of a jurisdiction other than the United States of America and the
States (or the District of Columbia) thereof; (ii) the principal operations
of such Subsidiary are not located in the United States; (iii) FIL has
provided the Agent with an officer's certificate certifying that FIL has
designated such Subsidiary as an Unrestricted Subsidiary at or prior to the
time such Subsidiary is formed or acquired by FIL, as the case may be, and
FIL has provided written notice to the Agent in reasonable detail of such
designation within five (5) Business Days after designation thereof; (iv)
FIL owns not less than eighty percent (80%) of the capital stock of such
Subsidiary and not less than eighty percent (80%) of the Voting Stock of
such Subsidiary; (v) all of such Subsidiary's liabilities (other than
liabilities permitted to be guaranteed by FIL pursuant to the FIL Credit
Agreement hereof) are non-recourse as to FIL or any Restricted Subsidiary;
and (vi) such Subsidiary does not own any capital stock of, or own or hold
any lien, security interest or other encumbrance on, any property of FIL or
any other Restricted Subsidiary, provided, however, no Subsidiary shall be
subsequently designated as an Unrestricted Subsidiary if any Default or
Event of Default has occurred and is continuing or would exist immediately
after giving effect to such designation.
ss.2. Amendment to Section 9 of the Credit Agreement. Section 9 of the
Credit Agreement is hereby amended by inserting the following immediately after
the end of the text of ss.9.16:
9.17. Unrestricted Subsidiaries. The Company shall at all times
designate persons constituting a majority of the directors (or members of
the governing body) of, and at all times have the power, directly or
indirectly, to direct the management and polices of each Unrestricted
Subsidiary.
ss.3. Amendment to Credit Agreement. Notwithstanding anything to the
contrary contained in the Credit Agreement, from and after the date hereof the
Borrowers shall not be permitted to request any Revolving Credit Loans to be
denominated in an Optional Currency, shall only be permitted to have Revolving
Credit Loans denominated in Dollars and, to the extent there are any Revolving
Credit Loans denominated in any Optional Currency, shall be required to repay
such Revolving Credit Loans on the date hereof.
ss.4. Conditions to Effectiveness. This Second Amendment shall not become
effective until the Agent receives a counterpart of this Second Amendment,
executed by the Borrower, the Guarantors and the Majority Banks.
ss.5. Representations and Warranties. The Borrower hereby repeats, on and
as of the date hereof, each of the representations and warranties made by it in
ss.8 of the Credit Agreement, and such
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representations and warranties remain true as of the date hereof (except to the
extent of changes resulting from transactions contemplated or permitted by the
Credit Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date), provided, that all references therein to the
Credit Agreement shall refer to such Credit Agreement as amended hereby. In
addition, the Borrower hereby represents and warrants that the execution and
delivery by the Borrower of this Second Amendment and the performance by the
Borrower of all of its agreements and obligations under the Credit Agreement as
amended hereby are within the corporate authority of each the Borrower and has
been duly authorized by all necessary corporate action on the part of the
Borrower.
ss.6. Ratification, Etc. Except as expressly amended hereby, the Credit
Agreement and all documents, instruments and agreements related thereto,
including, but not limited to the Security Documents, are hereby ratified and
confirmed in all respects and shall continue in full force and effect. The
Credit Agreement and this Second Amendment shall be read and construed as a
single agreement. All references in the Credit Agreement or any related
agreement or instrument to the Credit Agreement shall hereafter refer to the
Credit Agreement as amended hereby.
ss.7. No Waiver. Nothing contained herein shall constitute a waiver of,
impair or otherwise affect any Obligations, any other obligation of the Borrower
or any rights of the Agent or the Banks consequent thereon.
ss.8. Counterparts. This Second Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
ss.9. Governing Law. THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO CONFLICT OF LAWS).
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IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as a document under seal as of the date first above written.
FLEXTRONICS INTERNATIONAL USA, INC
By:__________________________________
Title:
BANKBOSTON, N.A.
By:__________________________________
Title:
ABN AMRO BANK N.V.
By: _________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By: _________________________________
Name:
Title:
BANQUE NATIONALE DE PARIS, SAN
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By: _________________________________
Name:
Vice President
PARIBAS
By: _________________________________
Name:
Title:
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COMERICA BANK
By: _________________________________
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: _________________________________
Name:
Title:
SUMITOMO BANK OF CALIFORNIA
By: _________________________________
Name:
Title:
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RATIFICATION OF GUARANTY
Each of the undersigned guarantors hereby acknowledges and consents to the
foregoing Second Amendment as of June 26, 1998, and agrees that each of the
Guarantees dated as of January 14, 1998 from each of the undersigned Guarantors
remain in full force and effect, and each of the Guarantors confirms and
ratifies all of its obligations thereunder.
FLEXTRONICS INTERNATIONAL LTD.
By:__________________________________
Title:
FLEXTRONICS INTERNATIONAL (UK) LTD.
By:__________________________________
Title:
FLEXTRONICS MANUFACTURING (HK) LTD.
By:__________________________________
Title:
FLEXTRONICS SINGAPORE PTE. LTD.
By:__________________________________
Title:
FLEXTRONICS HOLDING (UK) LTD.
By:__________________________________
Title:
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FLEXTRONICS MALAYSIA SDN BHD
By:__________________________________
Title:
FLEXTRONICS INTERNATIONAL
MARKETING (L) LTD.
By:__________________________________
Title:
FLEXTRONICS HOLDINGS AB
By:__________________________________
Title:
FLEXTRONICS INTERNATIONAL
SWEDEN AB
By:__________________________________
Title:
ASTRON GROUP LIMITED
By:__________________________________
Title:
DTM PRODUCTS CORPORATION
By:__________________________________
Title:
