SECOND AMENDMENT AGREEMENT
AMONG
SEMX CORPORATION,
XXXXXX COMPANY, INC.,
AMERICAN SILICON PRODUCTS, INC.
SPM HOLDINGS CORPORATION,
TYPE III, INC.
AND
THERMAL PACKAGING SOLUTIONS INC.
AS BORROWERS
AND
PNC BANK, NATIONAL ASSOCIATION,
AS AGENT AND AS LENDER
AMENDING THE REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT AMONG
SEMX CORPORATION, XXXXXX COMPANY, INC., AMERICAN SILICON PRODUCTS, INC.,
SPM HOLDINGS CORPORATION, TYPE III, INC., AND THERMAL PACKAGING SOLUTIONS INC.,
AS BORROWERS, AND PNC BANK, NATIONAL ASSOCIATION, AS AGENT AND AS LENDER
DATED AS OF NOVEMBER 1, 1999 AS AMENDED BY THE FIRST AMENDMENT AGREEMENT
DATED AS OF APRIL 10, 2000
Dated as of June 1, 2000
THIS SECOND AMENDMENT AGREEMENT, dated as of June 1, 2000 (this
"Amendment"), by and among SEMX CORPORATION, a corporation organized under the
laws of the State of Delaware ("SEMX"), XXXXXX COMPANY, INC. a corporation
organized under the laws of the State of California ("PCI"), AMERICAN SILICON
PRODUCTS, INC., a corporation organized under the laws of Delaware ("ASPI"), SPM
HOLDINGS CORPORATION., a Delaware corporation ("SPM"), TYPE III, INC., a
California corporation ("Type III") and THERMAL PACKAGING SOLUTIONS INC., a
Nevada corporation ("TPS") (SEMX, PCI, ASPI, SPM, Type III and TPS each a
"Borrower" and collectively "Borrowers"), the financial institutions which are
now or which hereafter become a party hereto (collectively, the "Lenders" and
individually a "Lender") and PNC BANK, NATIONAL ASSOCIATION ("Agent"), as Agent
and as Lender;
W I T N E S S E T H:
WHEREAS, the Borrowers and the Agent entered into a Revolving Credit,
Term Loan and Security Agreement dated as of November 1, 1999 as amended by the
First Amendment Agreement dated as of April 10, 2000 (as the same may be further
amended, modified, restated or supplemented from time to time, the "Agreement";
the terms defined in the Agreement are used in this Amendment as in the
Agreement unless otherwise defined in this Amendment); and
WHEREAS, the Borrowers have requested that the Agent agree to (1)
consent to certain actions in connection with the issuance of Series B Preferred
Stock by SEMX and the loan to, or equity investment in, ISP by SEMX in the
amount of $500,000 and (2) amend certain provisions of the Agreement in light of
excess capital expenditures funded with the proceeds of the sale of the Series B
Preferred Stock; and
WHEREAS, the Borrowers desire, and the Agent is willing on the terms
and conditions set forth below, to modify certain terms of the Agreement.
NOW, THEREFORE, in consideration of the mutual premises herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Borrowers and the Agent have agreed to
amend the Agreement as hereinafter set forth:
SECTION 1A. Amendment to Agreement. The Agreement is, subject to the
satisfaction of the conditions to effectiveness set forth in Section 2 hereof,
hereby amended follows:
(a) Section 1.2 (General Terms) of the Agreement is hereby amended by
adding the following definition in the proper alphabetical order:
"Series B Preferred Stock" shall mean the class of preferred stock
issued by SEMX in accordance with the terms of the Certificate of Designation,
Number, Powers, Preferences and Relative, Participating, Optional and Other
Rights of Series B Preferred Stock, attached as Exhibit B to the Series B
Preferred Stock Purchase Agreement.
"Series B Preferred Stock Purchase Agreement" shall mean the Stock
Purchase Agreement dated June 1, 2000 by and among SEMX and the purchasers
listed on the Schedule of Purchasers attached as Exhibit A thereto.
(b) Section 1.2 (General Terms) of the Agreement is hereby amended so
that the following definitions read in their entirety as follows:
"Fixed Charge Coverage" shall mean and include, with respect to any
fiscal period, the ratio of (a) EBITDA, minus capital expenditures (calculated
on a cash basis) made during such period (except for any capital expenditures
made after the date hereof up to an aggregate amount of $6,400,000), and minus
the amount of federal, state and local taxes actually paid, to (b) all Senior
Debt Payments plus all Subordinated Debt Payments during such period, and plus
any dividends paid to the holders of the Series B Preferred Stock during such
period."
(b) Section 7.6 (Capital Expenditures) of the Agreement is hereby
amended to read in its entirety as follows:
"7.6 Capital Expenditures. Contract for, purchase or make any
expenditure or commitments for fixed or capital assets (including capitalized
leases) in (a) the fiscal year ended December 31, 2000 in excess of $10,000,000
on an aggregate basis for all Borrowers, and (b) any fiscal year in an amount in
excess of $4,000,000 on an aggregate basis for all Borrowers, excluding however
from such calculation in both (a) and (b), the amount of any refinanced capital
leases.
(c) Section 7.11 (Leases) of the Agreement is hereby amended to read in
its entirety as follows:
"7.11. Leases. Enter as lessee into any lease arrangement for
real or personal property (unless capitalized and permitted under Section 7.6
hereof) if after giving effect thereto, aggregate annual rental payments for all
leased property would exceed $800,000 in any one fiscal year for all Borrowers
on an aggregate basis."
SECTION 1B. Consent and Waiver. The Agent, subject to the satisfaction
of the conditions to effectiveness set forth in Section 2 hereof, hereby
consents to:
(a) the issuance of the Series B Preferred Stock and the sale of the
Series B Preferred Stock pursuant to the terms of the Series B
Preferred Stock Purchase Agreement attached hereto as Exhibit B (the
"Series B Issuance and Sale");
(b) the amendment of the Articles of Incorporation of SEMX to permit the
issuance of the Series B Preferred Stock in form and substance
approved by Agent;
(c) the loan to, or equity investment in ISP by SEMX from the proceeds of
the sale of the Series B Preferred Stock in the amount of Five Hundred
Thousand Dollars ($500,000) (the "ISP Advance"), provided that, if
such Advance is a loan, ISP executes and delivers to SEMX a promissory
Note in the amount of the ISP Advance and such Note is endorsed by
SEMX to the Agent, for the benefit of the Lenders; and
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(d) provided that, no Default or Event of Default has occurred and is
continuing or would occur as a result of the following events: (i)
scheduled payment of dividends without acceleration to the holders of
the Series B Preferred Stock in the amounts stated in the Certificate
of Designation, Number, Powers, Preferences and Relative,
Participating, Optional and Other Rights of Series B Preferred Stock,
attached as Exhibit A to the Series B Preferred Stock Purchase
Agreement, (ii) the redemption of the Series B Preferred Stock, (iii)
the exercise of the Warrants to purchase an aggregate amount of
1,000,000 shares of common stock of SEMX (the "Common Stock") subject
to adjustment or the repurchase by SEMX of the Warrant; and (iv) incur
any expense under the Registration Rights Agreement dated as of June
1, 2000, to register shares of the Common Stock; provided further that
with respect to (ii), (iii) and (iv) above, the Agent receive prior
notice of such event.
((a), (b), (c), and (d) together, the "Approved Actions") and hereby waives
any violation of Sections 7.4, 7.5, 7.7, 7.8, 7.15 and 7.20 of the Credit
Agreement which would arise as a result of the Approved Actions, but for
the execution of this Consent and Waiver, provided, however, that each
Borrower, hereby affirms, that, other than as expressly waived herein,
Sections 7.4, 7.5, 7.7, 7.8, 7.15 and 7.20 of the Agreement shall be in
full force and effect, subject to the terms and conditions of the
Agreement.
SECTION 2. Conditions to Effectiveness. This Amendment shall become
effective only upon the satisfaction of all of the following conditions
precedent (the date of satisfaction of such conditions being referred to herein
as the "Second Amendment Effective Date"):
(a) The Borrowers and the Agent shall have duly executed and delivered
this Amendment (whether the same or different copies);
(b) The Agent shall have received an executed copy of the Series B
Preferred Stock Purchase Agreement (and all documents, schedules and opinions
delivered in connection) in form and substance reasonably satisfactory to the
Agent;
(c) The Agent shall have received a certificate of the Secretary or
Assistant Secretary of SEMX dated as of date hereof, certifying (i) that
attached thereto are true and complete copies of the resolutions of the board of
directors of SEMX authorizing the Series B Issuance and Sale, (ii) that said
resolutions are all of the resolutions adopted by the board of directors of SEMX
in connection with the Series B Issuance and Sale and such resolutions are in
full force and effect without modification as of such date, (iii) that the
Articles of Incorporation of SEMX amended to reflect the Series B Issuance and
Sale are attached to such certificate, (iv), that the By-laws of SEMX, if
amended to reflect changes relating to the Series B Issuance and Sale, are
attached to such certificate or if not so amended, that no amendments have
occurred since the Closing Date and (v) as to the incumbency and signatures of
each of its officers executing this Second Amendment and any other documents to
which it is a party.
(d) The Agent shall have received such other documents, opinions,
approvals or appraisals as the Agent may reasonably request.
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SECTION 3. Representations and Warranties. In order to induce the Agent
to enter into this Amendment, each of the Borrowers represents and warrants to
the Agent that (i) it has the full power, capacity, right and legal authority to
execute, deliver and perform its obligations under this Amendment and any Other
Documents to which it is a party, and each of the Borrowers has taken all
appropriate action necessary to authorize the execution and delivery of, and the
performance of its obligations under, this Amendment and the Other Documents to
which it is a party, (ii) this Amendment, the Agreement (as amended by this
Amendment) and the Other Documents to which it is a party constitute legal,
valid and binding obligations of each of the Borrowers enforceable against such
Borrower in accordance with its terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization or moratorium or similar laws affecting
the rights of creditors generally, (iii) the representations and warranties
contained in the Agreement and in each of the Other Documents to which it is a
party are true and correct on and as of the Second Amendment Effective Date as
though made on and as of such date, except for changes which have occurred and
which were not prohibited by the terms of the Agreement, (iv) after giving
effect to the terms of Section 1 hereof, no Default or Event of Default has
occurred and is continuing, or would result from the execution, delivery and
performance by any of the Borrowers of this Amendment, the Agreement (as amended
by this Amendment) or any of the Other Documents to which it is a party, (v)
after giving effect to the transactions contemplated by the Series B Preferred
Stock Purchase Agreement, no Borrower is in default in the payment or
performance of any of its obligations under any mortgage, indenture, security
agreement, contract, undertaking or other agreement or instrument to which it is
a party or which purports to be binding upon it or any of its properties or
assets, which default would have a material adverse effect on the management,
business, operations, properties, assets or condition (financial or otherwise)
of such Borrower, (vi) each of the Borrowers is in compliance with all
applicable statutes, laws, rules, regulations, orders and judgements, the
contravention or violation of which would have a material adverse effect on the
management, business, operations, properties, assets or condition (financial or
otherwise) of such Borrower, (vii) no material adverse change in the business,
properties, assets, or in the condition (financial or otherwise) of any Borrower
has occurred, and (viii) no litigation or administrative proceeding of or before
any court or governmental body or agency is now pending, nor, to the best
knowledge of each of the Borrowers upon reasonable inquiry, is any such
litigation or proceeding now threatened against such Borrower or any of its
properties, nor, to the best knowledge of such Borrower upon reasonable inquiry,
is there a valid basis for the initiation of any such litigation or proceeding,
which if adversely determined (after giving effect to all applicable insurance
coverage then in existence) would have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of such
Borrower.
SECTION 4. Reference to and Effect on the Documents. (a) Each reference
in the Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of like import, and each reference to the Agreement in the Other Documents other
than the Agreement, shall mean and be a reference to the Agreement as amended
hereby.
(b) Except as specifically amended hereby, the Agreement and all Other
Documents, and all other documents, agreements, instruments or writings entered
into in connection therewith,
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shall remain in full force and effect and are hereby ratified, confirmed and
acknowledged by each of the Borrowers. The amendments, consents, waivers and
ratifications set forth above are limited precisely as written and shall not be
deemed to (i) be a consent to any waiver or modification of any other term or
condition of the Agreement or any document delivered pursuant thereto or (ii)
prejudice any right or rights which the Agent may now or in the future have in
connection with the Agreement or the Other Documents.
(c) The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of the Agent under any of
the Other Documents, nor constitute a waiver or modification of any provision of
any of the Other Documents, nor a waiver of any now existing or hereafter
arising Defaults or Events of Default.
SECTION 5. Expenses. Each of the Borrower hereby agrees, jointly and
severally, to pay the Agent on demand all costs, expenses, charges and taxes
(other than any income taxes relating to income of the Agent), including,
without limitation, all reasonable fees and disbursements of counsel, incurred
by the Agent in connection with the negotiation, preparation, reproduction,
execution, delivery, administration and enforcement of this Amendment and the
Other Documents to be delivered hereunder.
SECTION 6. Condition Subsequent. The Borrowers shall use the proceeds
of the sale of the Series B Preferred Stock to repay in full all amounts
outstanding under Term Loan II within one business day of the receipt of such
proceeds from the Borrower. The remainder of the proceeds from the sale of the
Series B Preferred Stock may be used to fund the ISP Advance, capital
expenditures or working capital purposes.
SECTION 7. Governing Law. This Amendment and the rights and obligations
of the parties hereunder shall be governed by and construed and interpreted in
accordance with the substantive laws of the State of New York, without regard
for its conflict of laws principles.
SECTION 8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
SECTION 9. Successors. This Amendment shall be binding upon the
successors, assigns, heirs, executors and administrators of the parties hereto.
SECTION 10. Counterparts. This Amendment may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Amendment by signing any such
counterpart.
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IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SEMX CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: X X Xxxxx
Title:Chairman
XXXXXX COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: X X Xxxxx
Title:Chairman
AMERICAN SILICON PRODUCTS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: X X Xxxxx
Title:Chairman
SPM HOLDINGS CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: X X Xxxxx
Title:Chairman
TYPE III, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: X X Xxxxx
Title:Chairman
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THERMAL PACKAGING SOLUTIONS INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: X X Xxxxx
Title:Chairman
PNC BANK, NATIONAL ASSOCIATION, as
Lender and as Agent
By: /s/
-------------------------------
Name:
Title:
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