EXHIBIT 10.1
AMENDMENT AGREEMENT
This AMENDMENT AGREEMENT (this "Amendment") is entered into as of
June 18, 2002 among SOLECTRON CORPORATION, a Delaware corporation (the
"Company"), the several financial institutions party to the Credit Agreement
referred to below (each a "Lender" and, collectively, the "Lenders"), XXXXXXX
XXXXX CREDIT PARTNERS L.P., as Sole Lead Arranger, Sole Book Runner and
Co-Syndication Agent ("Lead Arranger"), and Bank of America, N.A., as
Administrative Agent.
The Company, the Lenders, Lead Arranger and the Administrative
Agent entered into a 364-Day Credit Agreement dated as of February 14, 2002 (as
in effect as of the date of this Amendment, the "Credit Agreement").
The Company has requested that the Lenders agree to certain
amendments to the Credit Agreement and provide certain consents together
therewith and the Lenders have agreed to such request, subject to the terms and
conditions of this Amendment.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
1. Definitions; References; Interpretation.
(a) Unless otherwise specifically defined herein, each term used herein
(including in the Recitals hereof and in the Consent and Agreement attached
hereto as Exhibit A) which is defined in the Credit Agreement shall have the
meaning assigned to such term in the Credit Agreement.
(b) As used herein, "Amendment Documents" means this Amendment, the
Consent and Agreement related hereto and the Credit Agreement (as amended by
this Amendment).
(c) Each reference to "this Agreement", "hereof", "hereunder", "herein"
and "hereby" and each other similar reference contained in the Credit Agreement,
and each reference to "the Credit Agreement" and each other similar reference in
the other Loan Documents, shall from and after the Effective Date refer to the
Credit Agreement as amended hereby.
(d) The rules of interpretation set forth in Sections 1.02, 1.03 and
1.05 of the Credit Agreement shall be applicable to this Amendment.
2. Amendments to Credit Agreement. Subject to the terms and conditions
hereof, effective as of the date of satisfaction of the conditions set forth in
Section 4 (the "Effective Date") the Credit Agreement is amended as follows as
of May 31, 2002:
(a) Amendments to Article I of the Credit Agreement.
(1) The definition of "Applicable Rate" is amended by replacing
the pricing table set forth therein in its entirety with the pricing table set
forth in Annex I attached to this
1.
Amendment;
(2) A new definition of "Cash Interest Coverage Ratio Compliance
Date" as set forth below shall be inserted immediately following the definition
of "Capital Stock":
"`Cash Interest Coverage Ratio Compliance Date' means the
last day of any fiscal quarter ending on or after November
30, 2002 during which the Borrower has maintained a Cash
Interest Coverage Ratio as of the end of such fiscal
quarter and the immediately prior fiscal quarter of not
less than 4:00 to 1.00."
(3) The definition of "Cash Interest Coverage Ratio" is amended
in its entirety as follows:
"`Cash Interest Coverage Ratio' means, as of any date of
determination, the ratio of:
(x) the sum of (i) Consolidated EBITDA for the
period of the four prior fiscal quarters ending on such
date, (ii) the Non-Cash Restructuring Charges deducted in
calculating Consolidated Net Income for such period and
(iii) the Cash Restructuring Charges deducted in
calculating Consolidated Net Income for such period;
provided that, the cumulative aggregate amount of Cash
Restructuring Charges taken in fiscal quarters ending on
or after May 31, 2002 but on or prior to August 29, 2003
and which are included in calculating the Cash Interest
Coverage Ratio shall not exceed $235,000,000, to
(y) Consolidated Cash Interest Charges during such
period."
(4) A new definition of "Cash Restructuring Charges" as set forth
below shall be inserted immediately following the definition of "Cash Interest
Coverage Ratio":
"`Cash Restructuring Charges' means, in respect of any
period, any cash restructuring charges taken by the
Borrower and its Subsidiaries on a consolidated basis
during such period in accordance with GAAP; provided that,
for purposes of calculating the Cash Interest Coverage
Ratio in respect of any fiscal quarter ending on or prior
to February 28, 2002, the sum of Cash Restructuring
Charges and Non-Cash Restructuring Charges for such
quarter shall not exceed the amount set forth on Schedule
7.13 relating to any such fiscal quarter."
(5) The definition of "Consolidated Cash Interest Charges" is
amended in its entirety as follows:
"`Consolidated Cash Interest Charges' means, for any
period, for the Borrower and its Subsidiaries on a
consolidated basis, the sum of cash
2.
payments for (a) all interest, premium payments, fees,
charges and related expenses of the Borrower and its
Subsidiaries in connection with borrowed money or in
connection with the deferred purchase price of assets, in
each case to the extent treated as interest in accordance
with GAAP, (b) the portion of rent expense of the Borrower
and its Subsidiaries with respect to such period under
capital leases that is treated as interest in accordance
with GAAP and (c) the portion of rent expense comprising
interest with respect to the Synthetic Lease Obligations
of the Borrower and its Subsidiaries plus any net payment
made, or minus any net payment received, by the Borrower
or any consolidated Subsidiary under any Swap Contract
consisting of an interest rate swap relating to
Indebtedness of the Borrower or any such Subsidiary. This
definition shall not include non-cash interest charges
(including accretion on the Borrower's XXXXx)."
(6) The definition of "Consolidated Tangible Net Worth" is
amended in its entirety as follows:
"`Consolidated Tangible Net Worth' means, as of any date
of determination, for the Borrower and its Subsidiaries on
a consolidated basis, Shareholders' Equity of the Borrower
and its Subsidiaries on that date minus the Intangible
Assets of the Borrower and its Subsidiaries on that date;
provided that, to the extent any charge relating to a
reduction in goodwill taken by Borrower and its
Subsidiaries on a consolidated basis results in gain or
income relating thereto, then such gain or income shall be
excluded from the calculation of Consolidated Tangible Net
Worth as of such date of determination for purposes of
testing the Borrower's compliance with Section 7.13(a)
(the intent of the parties being that the effect of any
such reduction in goodwill and any related gain or income
on the calculation of Consolidated Tangible Net Worth for
the purposes of testing the Borrower's compliance with
Section 7.13(a) be neutral)."
(7) A new definition of "Non-Cash Restructuring Charges" as set
forth below shall be inserted immediately following the definition of "New
Revolving Loan Commitments":
"`Non-Cash Restructuring Charges' means, for any period,
any non-cash restructuring charges, other than charges
relating to accounts receivable or inventory write-downs,
taken by the Borrower and its Subsidiaries during such
period on a consolidated basis in accordance with GAAP;
provided that, for purposes of calculating the Cash
Interest Coverage Ratio in respect of any fiscal quarter
ending on or prior to February 28, 2002, the sum of
Non-Cash Restructuring Charges and Cash Restructuring
Charges for such quarter shall not exceed the amount set
forth on Schedule 7.13 relating to any such fiscal
quarter."
(8) The definition of "Restricted Junior Payment" is amended by
inserting the following at the end thereof:
3.
"or (C) any repurchase, prepayments, redemption or
acquisition of the XXXXx that does not violate the terms
of this Agreement, including, but not limited to, any such
repurchase, prepayments, redemption or acquisition made in
accordance with Section 7.14";
(9) The definition of "Restructuring Charges" is deleted in its
entirety.
(b) Amendments to Article VI of the Credit Agreement.
(1) Section 6.14(b) is amended by inserting immediately after the
phrase "`Material Subsidiary'" in both instances where it appears therein the
following:
"or `First Tier Foreign Subsidiary', as the case may be,"
(c) Amendments to Article VII of the Credit Agreement.
(1) Section 7.01(t) is amended in its entirety to provide as
follows:
"(t) Liens consisting of pledges of cash collateral to
secure (i) Synthetic Lease Obligations in existence on the
Closing Date and any refinancings or extensions thereof
(provided that the aggregate amount of such cash
collateral securing such Synthetic Lease Obligations shall
not at any time exceed $124,000,000 (plus on a one-time
basis any reasonable premium or other reasonable amount
paid, and fees and expenses reasonably incurred, in
connection with the first refinancing or restructuring of
such obligations after June 18, 2002) less any amount of
such cash collateral released to the Borrower or its
Subsidiaries subsequent to June 18, 2002 as a result of
any refinancing or restructuring of such obligations or
otherwise, other than any of such cash collateral utilized
to collateralize any reasonable premium or other
reasonable amount paid, and fees and expenses reasonably
incurred, in each case to the extent the same are
capitalized in connection with any such refinancing or
restructuring), or (ii) Indebtedness of any non-U.S.
Subsidiary solely for the purpose of repatriating, on a
tax-efficient basis, cash held by any non-U.S. Subsidiary
out of the applicable foreign jurisdiction for the benefit
of any Loan Party; and";
(2) Section 7.10 is amended in its entirety to provide as
follows:
"(a) Make or become legally obligated to make any
expenditure in respect of the purchase or other
acquisition of any fixed or capital asset (excluding
normal replacements and maintenance which are properly
charged to current operations, Permitted Acquisitions, and
acquisitions of assets as a result of the termination of
Synthetic Lease Obligations), except for capital
expenditures not exceeding, in the aggregate for the
Borrower and its Subsidiaries for any consecutive
four-quarter period beginning on September 1, 2001, and
each four-quarter period beginning on each
4.
September 1 thereafter an amount equal to $300,000,000.00;
provided, however, that so long as no Default or Event of
Default has occurred and is continuing or would result
from such expenditure, upon the receipt by the
Administrative Agent of a notice confirming the Investment
Grade Ratings of the Borrower, this Section 7.10(a) shall
be terminated and be of no further force and effect;
provided however that, upon the occurrence of the Cash
Interest Coverage Ratio Compliance Date, this Section
7.10(a) shall be terminated and be of no further force and
effect provided that the Borrower instead complies with
Section 7.10(b).
(b) Make or become legally obligated to make any
expenditure in respect of the purchase or other
acquisition of any fixed or capital asset (excluding
normal replacements and maintenance which are properly
charged to current operations, Permitted Acquisitions, and
acquisitions of assets as a result of the termination of
Synthetic Lease Obligations), except for capital
expenditures not exceeding, in the aggregate for the
Borrower and its Subsidiaries for any consecutive
four-quarter period beginning immediately after the Cash
Interest Coverage Ratio Compliance Date, and each
four-quarter period beginning on a twelve month
anniversary of the Cash Interest Coverage Ratio Compliance
Date, an amount equal to $600,000,000.00; provided,
however, that so long as no Default or Event of Default
has occurred and is continuing or would result from such
expenditure, upon the receipt by the Administrative Agent
of a notice confirming the Investment Grade Ratings of the
Borrower, this Section 7.10(b) shall be terminated and be
of no further force and effect; provided however that,
this Section 7.10(b) shall only have force and effect in
the event that the Borrower has satisfied the conditions
therefor set forth in the proviso to Section 7.10(a). For
the avoidance of doubt, no amount permitted to be expended
under Section 7.10(a) may be carried over for expenditure
under this Section 7.10(b).";
(3) Section 7.13(a) is amended in its entirety to provide as
follows:
"(a) Consolidated Tangible Net Worth. (i) For the fiscal
quarter of the Borrower ended May 31, 2002, permit
Consolidated Tangible Net Worth as of the end of such
fiscal quarter of the Borrower to be less than
$2,000,000,000.00; and
(ii) For any fiscal quarter ending after May 31, 2002,
permit Consolidated Tangible Net Worth as of the end of
any such fiscal quarter of the Borrower to be less than
the sum of (x) (A) in the case of the fiscal quarter of
the Borrower ending August 31, 2002, $1,850,000,000.00 and
(B) in the case of any fiscal quarter of the Borrower
ending after August 31, 2002, $1,800,000,000.00, (y) an
amount equal to 50% of the Consolidated Net Income earned
in each fiscal quarter ending after May 31, 2002 (with no
deduction for a net loss in any such fiscal quarter), and
(z) an amount
5.
equal to 50% of the aggregate increases in Shareholders'
Equity of the Borrower and its Subsidiaries after May 31,
2002 by reason of the issuance of Capital Stock of the
Borrower (including upon any conversion of debt securities
of the Borrower into such Capital Stock) during any fiscal
quarter of the Borrower ending subsequent to May 31,
2002.";
(4) Section 7.13(b) is amended in its entirety to provide as
follows:
"(b) Cash Interest Coverage Ratio. Permit the Cash
Interest Coverage Ratio as of the end of any fiscal
quarter of the Borrower to be less than the following
amounts:
Fiscal Quarter Ending Minimum Ratio
--------------------- -------------
May 31, 2002 3.75:1.00
August 31, 2002 3.00:1.00
November 30, 2002 2.50:1.00
February 28, 2003 3.00:1.00
May 31, 2003
and thereafter 4.00:1.00
(5) Section 7.13 is amended by adding a new subsection (d)
thereto as follows:
"(d) Liquidity Ratio. Permit as of the end of any fiscal
quarter of the Borrower the ratio of:
(x) the sum of (1) cash-on-hand, (2) cash
equivalents, (3) marketable securities and (4) current
accounts receivable, in each case not subject to a Lien,
to
(y) all accounts payable of the Borrower and its
Subsidiaries on a consolidated basis and Consolidated
Indebtedness other than (1) Subordinated Indebtedness, (2)
Indebtedness under the XXXXX, (3) Attributable
Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis in respect of capital leases and
Synthetic Lease Obligations which are fully cash
collateralized and (4) Indebtedness of the
6.
Borrower and its Subsidiaries on a consolidated basis
described under clause (b) of the definition of
"Indebtedness" herein, unless and until any such
Indebtedness constitutes a matured reimbursement
obligation or matured payment obligation and is no longer
contingent,
to be less than 1.20 to 1.00; provided that, from and
after the Cash Interest Coverage Ratio Compliance Date,
this Section 7.13(d) shall be terminated and be of no
further force and effect."
(d) Amendment to Exhibit C of the Credit Agreement. Exhibit C of the
Credit Agreement is replaced in its entirety by Exhibit C attached to this
Amendment.
3. Representations and Warranties. The Company hereby represents and
warrants to the Administrative Agent, the Lead Arranger and the Lenders as
follows:
(a) After giving effect to the amendments set forth in Section 2, no
Default or Event of Default has occurred and is continuing (or would result from
the amendment of the Credit Agreement contemplated hereby).
(b) The execution, delivery and performance by the Company of the
Amendment Documents have been duly authorized by all necessary corporate and
other action and do not and will not require any registration with, consent or
approval of, or notice to or action by, any Person (including any Governmental
Authority) in order to be effective and enforceable.
(c) The Amendment Documents constitute the legal, valid and binding
obligations of the Company, enforceable against it in accordance with their
respective terms.
(d) All representations and warranties of the Company contained in the
Credit Agreement are true and correct in all material respects (except to the
extent such representations and warranties expressly refer to an earlier date,
in which case they shall be true and correct as of such earlier date and except
that this subsection (d) shall be deemed instead to refer to the last day of the
most recent fiscal quarter and fiscal year for which financial statements have
then been delivered in respect of the representations and warranties made in
subsections 5.05(a) and (b) of the Credit Agreement.
(e) The Company is entering into this Amendment on the basis of its own
investigation and for its own reasons, without reliance upon the Administrative
Agent, the Lead Arranger and the Lenders or any other Person.
(f) The Company's obligations under the Credit Agreement and under the
other Loan Documents are not subject to any defense, counterclaim, set-off,
right of recoupment, abatement or other claim.
4. Conditions of Effectiveness.
7.
(a) The effectiveness of Section 2 of this Amendment shall be subject to
the satisfaction of each of the following conditions precedent:
(1) The Administrative Agent shall have received from the Company
and the Required Lenders a duly executed original (or, if elected by the
Administrative Agent, an executed facsimile copy) of this Amendment.
(2) The Administrative Agent shall have received the consent of a
number of Subsidiaries of the Company satisfactory to the Administrative Agent,
in form and substance satisfactory to the Administrative Agent, which are
Guarantors, parties to a Pledge Agreement or parties to the Interco
Subordination Agreement, in their capacities as such, to the execution and
delivery hereof by the Company.
(3) The Administrative Agent shall have received evidence of
payment by the Company of all fees, costs and expenses due and payable as of the
Effective Date hereunder and under the Credit Agreement, including any fees
arising under or referenced in Section 5 of this Amendment and any costs and
expenses payable under Section 7(g) of this Amendment (including the
Administrative Agent's and the Lead Arranger's Attorney Costs, to the extent
invoiced on or prior to the Effective Date).
(4) The Administrative Agent shall have received from the
Company, in form and substance satisfactory to the Administrative Agent, a copy
of the resolutions passed by the board of directors of the Company, certified as
of the Effective Date by the Secretary or an Assistant Secretary of such Person,
authorizing the execution, delivery and performance of the Amendment Documents.
(5) The Administrative Agent shall have received all other
documents it or the Required Lenders may reasonably request relating to any
matters relevant hereto, all in form and substance satisfactory to the
Administrative Agent.
(6) The representations and warranties in Section 3 of this
Amendment shall be true and correct on and as of the Effective Date with the
same effect as if made on and as of the Effective Date.
(b) For purposes of determining compliance with the conditions specified
in Section 4(a), each Lender that has executed this Amendment shall be deemed to
have consented to, approved or accepted, or to be satisfied with, each document
or other matter either sent, or made available for inspection, by the
Administrative Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to such Lender.
(c) From and after the Effective Date, the Credit Agreement is amended
as set forth herein. Except as expressly amended pursuant hereto, the Credit
Agreement shall remain unchanged and in full force and effect and is hereby
ratified and confirmed in all respects.
(d) The Administrative Agent will notify the Company and the Lenders of
the
8.
occurrence of the Effective Date.
5. Fees. The Company shall pay (through the Administrative Agent) to
each Lender that executes and delivers this Amendment by no later than 5:00 p.m.
(Pacific time) on or before June 17, 2002, a non-refundable amendment fee equal
to 0.20% of such Lender's Commitment as of the Effective Date. Such amendment
fee shall be fully-earned upon becoming due and payable, shall not be refundable
for any reason whatsoever and shall be in addition to any fee, cost or expense
otherwise payable by the Company pursuant to the Credit Agreement or this
Amendment.
6. FASB 145. The company has notified the Administrative Agent and the
Lenders of a recent change in FASB 145 which will allow the Company to report,
when and if it elects to apply FASB 145 to its fiscal year end results, gains
resulting from the extinguishment of debt as ordinary income rather than an
extraordinary item. In accordance with Section 1.3 of the Credit Agreement the
Company, the Administrative Agent and the Required Lenders agree that, and
consent to, such ordinary income items being included in the Company's
Consolidated Net Income for the relevant period as net income from continuing
operations in accordance with GAAP after such election is made.
7. Miscellaneous.
(a) The Company acknowledges and agrees that the execution and delivery
by the Administrative Agent, the Lead Arranger and the Lenders of this Amendment
shall not be deemed to create a course of dealing or an obligation to execute
similar waivers or amendments under the same or similar circumstances in the
future.
(b) This Amendment shall be binding upon and inure to the benefit of the
parties hereto and thereto and their respective successors and assigns.
(c) This Amendment shall be governed by and construed in accordance with
the law of the State of New York (including Sections 5-1401 and 5-1402 of the
General Obligations Law of the State of New York); provided that, the
Administrative Agent and the Lenders shall retain all rights arising under
Federal law.
(d) This Amendment may be executed in any number of counterparts, each
of which shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this document (and any other document required
herein) may be delivered by any party thereto either in the form of an executed
original or an executed original sent by facsimile transmission to be followed
promptly by mailing of a hard copy original, and that receipt by the
Administrative Agent of a facsimile transmitted document purportedly bearing the
signature of a Lender or the Company shall bind such Lender or the Company,
respectively, with the same force and effect as the delivery of a hard copy
original. Any failure by the Administrative Agent to receive the hard copy
executed original of such document shall not diminish the binding effect of
receipt of the facsimile transmitted executed original of such document of the
party whose hard copy page was not received by the Administrative Agent.
9.
(e) This Amendment and the other Amendment Documents contains the entire
and exclusive agreement of the parties hereto with reference to the matters
discussed herein. This Amendment supersedes all prior drafts and communications
with respect hereto. This Amendment may not be amended except in accordance with
the provisions of Section 10.01 of the Credit Agreement.
(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment, the
Credit Agreement or the Loan Documents.
(g) The Company agrees to pay or reimburse Bank of America (including in
its capacity as Administrative Agent) and the Lead Arranger, upon demand, for
all reasonable costs and expenses (including reasonable Attorney Costs) incurred
by Bank of America (including in its capacity as Administrative Agent) and the
Lead Arranger in connection with the development, preparation, negotiation,
execution and delivery of the Amendment Documents.
(h) The Company hereby agrees and covenants that within fifteen (15)
Business Days after the Effective Date it will provide to the Administrative
Agent the consent of each Subsidiary of the Company not previously delivered in
accordance with Section 4(a)(2), in form and substance satisfactory to the
Administrative Agent, which is a Guarantor, a party to a Pledge Agreement or a
party to the Interco Subordination Agreement, in their capacities as such, to
the execution and delivery hereof by the Company. The Company hereby agrees and
acknowledges that any failure on its part to comply with the covenant set forth
in the preceding sentence shall be an immediate Event of Default under the
Credit Agreement.
[signature pages follow]
10.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first above written.
SOLECTRON CORPORATION
By: /s/ XXXXX X. XXXXX
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Treasury
BANK OF AMERICA, N.A., AS ADMINISTRATIVE
AGENT AND A LENDER
By:
------------------------------------
Name:
Title:
S-1.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first above written.
SOLECTRON CORPORATION
By:
------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., AS ADMINISTRATIVE
AGENT AND A LENDER
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: XXXXX X. XXXXXXX
Title: Managing Director
S-1.
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
AS SOLE LEAD ARRANGER, SOLE BOOK RUNNER AND
CO-SYNDICATION AGENT AND A LENDER
By: /s/ Xxxxxxx Xxxx
------------------------------------
Authorized Signatory
S-2.
ADDISON CDO, LIMITED (ACCT 1279)
By: Pacific Investment Management Company LLC,
as its Investment Advisor
By: /s/ XXXXX X. XXXXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxxxx
Executive Vice President
S-3.
THE BANK OF NOVA SCOTIA
By: /s/ XXXX XXXXXXX
------------------------------------
Name: Xxxx Xxxxxxx
Title: Director
S-4.
BEDFORD CDO, LIMITED (ACCT 1276)
By: Pacific Investment Management Company LLC,
as its Investment Advisor
By: /s/ XXXXX X. XXXXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxxxx
Executive Vice President
S-5.
BNP PARIBAS
By: /s/ XXXXXX XXXXXX
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
By: /s/ XXXXXXX XXX PHO
------------------------------------
Name: Xxxxxxx Xxx Pho
Title: Associate
S-6.
DELANO COMPANY (ACCT 274)
By: Pacific Investment Management Company LLC,
as its Investment Advisor
By: /s/ XXXXX X. XXXXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxxxx
Executive Vice President
S-7.
THE DEVELOPMENT BANK OF
SINGAPORE LTD., LOS ANGELES AGENCY
By: /s/ WIL XXX XXXX
------------------------------------
Name: Wil Xxx Xxxx
Title: General Manager
S-8.
FLEET NATIONAL BANK
By: /s/ XXXX XXXX
------------------------------------
Name: Xxxx Xxxx
Title: Director
S-9.
JPMORGAN CHASE BANK
By: /s/ XXXXXXX X.XXXXXXXX
------------------------------------
Name: Xxxxxxx X.Xxxxxxxx
Title: Vice President
S-10.
OAK HILL CREDIT PARTNERS I, LIMITED
By: Oak Hill CLO Management I, LLC
As Investment Manager
By: /s/ XXXXX X. XXXXX
------------------------------------
Name: XXXXX X. XXXXX
Title: Authorized Signatory
S-11.
OAK HILL SECURITIES FUND, L.P.
By: Oak Hill Securities GenPar, L.P.
its General Partner
By: Oak Hill Securities MGP, Inc.
its General Partner
By: /s/ XXXXX X. XXXXX
------------------------------------
Name: XXXXX X. XXXXX
Title: Authorized Signatory
S-12.
OAK HILL SECURITIES FUND II, L.P.
By: Oak Hill Securities GenPar II, L.P.
its General Partner
By: Oak Hill Securities MGP II, Inc.
its General Partner
By: /s/ XXXXX X. XXXXX
------------------------------------
Name: XXXXX X. XXXXX
Title: Authorized Signatory
S-13.
THE PRESIDENT & FELLOWS OF
HARVARD COLLEGE (REF. HARVARD
SPECIAL SITUATIONS ACCOUNT)
BY: WHIPPORWILL ASSOCIATES, INCORPORATED
AS: AGENT AND AUTHORIZED SIGNATORY
By: /s/ XXXXXXX X. XXXXXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
S-14.
THE ROYAL BANK OF SCOTLAND plc
By: /s/ XXXXXXX XXXXXXXX
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice-President
S-15.
SEQUILS-MAGNUM, LTD. (#1280)
By: Pacific Investment Management Company LLC,
as its Investment Advisor
By: /s/ XXXXX X. XXXXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxxxx
Executive Vice President
S-16.
STANDARD CHARTERED BANK
By: /s/ XXXX XXXXXXX-XXXXXXXX
------------------------------------
Name: XXXX XXXXXXX-XXXXXXXX
Title: Sr. Vice President
By: /s/ XXXXXX XXXXXXX
------------------------------------
Name: XXXXXX XXXXXXX
Title: Vice President
S-17.
SUNAMERICA SENIOR FLOATING RATE
FUND, INC.
By: Xxxxxxxxx Capital Partners LLC
as subadvisor
By: /s/ XXXXXXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Managing Partner
S-18.
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx Grzawkowski
------------------------------------
Name: Xxxxx Grzawkowski
Title: Associate
S-19.
EXHIBIT A
CONSENT AND AGREEMENT
OF
GUARANTORS, PLEDGORS AND CREDITOR SUBSIDIARIES
Each of the undersigned, in its capacity as a Guarantor, a party
to the Interco Subordination Agreement and/or the Pledge Agreement, acknowledges
that its consent to the foregoing Amendment Agreement (the "Agreement") is not
required, but each of the undersigned nevertheless does hereby consent to the
foregoing Agreement and to the documents and agreements referred to therein.
Nothing herein shall in any way limit any of the terms or provisions of the
Guaranty of the undersigned, the Interco Subordination Agreement or the Pledge
Agreement executed by the undersigned in the Administrative Agent's and the
Lenders' favor, or any other Loan Document executed by the undersigned (as the
same may be amended from time to time), all of which are hereby ratified and
affirmed in all respects.
THE SUBSIDIARIES LISTED ON SCHEDULE A
By:
------------------------------------
Title:
---------------------------------
SCHEDULE A
American Information and Communications, Inc.
Americom Wireless Services, Inc.
Apex Data, Inc.
Artesyn Solutions, Inc.
C-MAC Credit Corporation
C-MAC Design Corporation
C-MAC Finance LLC
C-MAC Holdings Inc.
C-MAC Interconnect USA Inc.
C-MAC Microtechnology Holdings Inc.
C-MAC Network Systems, Inc.
C-MAC Nevada Inc.
C-MAC Properties, Inc.
C-MAC Quartz Crystals Inc.
C-MAC West Coast Operations, Inc.
Fine Pitch (Xxxxxx Hill) Corporation
Fine Pitch Technology, Inc.
Force Computers, Inc.
Iphotonics, Inc.
Kavlico Corporation
Kavlico International, Inc.
Memquest, Inc.
Metaltek, Inc.
Natsteel Electronics, Inc.
Navox Corporation
Nel (US) Holdings, Inc.
Patria Design, Inc.
Rivus Internet Group, Inc.
Scrantom Engineering, Inc.
Shinei USA, Inc.
Smart Modular Technologies, Inc.
Smart Modular Technologies (MA) Inc.
Smart Modular Technologies (P.R.), Inc.
Solectron California Corporation
Solectron Capital Trust 1
Solectron Federal Systems, Inc.
Solectron Funding Corporation
Solectron Georgia Corporation
Solectron Global Services, Inc.
Solectron Holdings Inc.
Solectron Holdings Ltd.
Solectron International Distribution, Inc.
Solectron Massachusetts Corporation
A-1
Solectron Oregon Corporation
Solectron Puerto Rico, Inc.
Solectron South Carolina Corporation
Solectron Technology, Inc.
Solectron Texas, Inc.
Solectron Texas L.P.
Solectron Washington, Inc.
Stream International L.L.C.
Stream International, Inc.
Stream International Services Corporation
Stream Services, Inc.
A-2
Annex I
Pricing Grid for Credit Agreement (364-Day)
APPLICABLE APPLICABLE
DEBT RATINGS FACILITY FEE APPLICABLE UTILIZATION FEE
PRICING LEVEL S&P/XXXXX'X RATE LIBO RATE RATE
------------- ------------ ------------ ---------- ---------------
1 BBB/Baa2 12.5 bps 75.0 bps 12.5 bps
(or better)
2 BBB-/Baa3 20.0 bps 105.0 bps 25.0 bps
3 BB+/Ba1 25.0 bps 125.0 bps 25.0 bps
4 BB/Ba2 30.0 bps 145.0 bps 50.0 bps
5 BB-/Ba3 50.0 bps 175.0 bps 50.0 bps
6 B+/B1 62.5 bps 212.5 bps 50.0 bps
(or lower)
I-1
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ____________, ___
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of February
14, 2002 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement"; terms defined therein being used
herein as therein defined), among Solectron Corporation, a Delaware corporation
(the "Borrower"), Xxxxxxx Sachs Credit Partners L.P., as sole lead arranger,
sole book runner and co-syndication agent, JPMorgan Chase Bank, as
co-syndication agent, The Bank of Nova Scotia, as documentation agent, each
lender from time to time party thereto (collectively, the "Lenders," and
individually, a "Lender"), and Bank of America, N.A., as Administrative Agent.
The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the _______________ of the Borrower, and that, as such,
he/she is authorized to execute and deliver this Compliance Certificate to the
Administrative Agent on the behalf of the Borrower, and that:
[Use following for fiscal YEAR-END financial statements]
1. Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Agreement for the fiscal year of
the Borrower ended as of the above date, together with the report and opinion of
an independent certified public accountant required by such section.
2. Attached hereto as Schedule 2 is a list of Material Subsidiaries and
First Tier Foreign Subsidiaries.
[Use following for fiscal QUARTER-END financial statements]
1. Attached hereto as Schedule 1 are the unaudited financial statements
required by Section 6.01(b) of the Agreement for the fiscal quarter of the
Borrower ended as of the above date. Such financial statements fairly present
the financial condition, results of operations and cash flows of the Borrower
and its Subsidiaries in accordance with GAAP as at such date and for such
period, subject only to normal year-end audit adjustments and the absence of
footnotes.
2. Attached hereto as Schedule 2 is a list of Material Subsidiaries and
First Tier Foreign Subsidiaries.
C-1
3. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by the attached financial
statements.
4. A review of the activities of the Borrower during such fiscal period
has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrower performed and
observed all its Obligations under the Loan Documents, and
[select one:]
[to the knowledge of the undersigned after due inquiry, no Default or Event of
Default exists as of the date hereof]
--or--
[the following covenants or conditions have not been performed or
observed and the following is a list of each such Default or Event of Default,
its nature and status and the action that the Borrower proposes to take with
respect thereto:]
5. The representations and warranties contained in Article V of the
Agreement, or which are contained in any document furnished at any time under or
in connection with the Loan Documents, are true and correct in all material
respects on and as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date.
6. The financial covenant analyses and information set forth on
Schedules 3 and 4 attached hereto are true and accurate on and as of the date of
this Compliance Certificate.
(remainder of page intentionally left blank)
C-2
IN WITNESS WHEREOF, the undersigned has executed this Compliance
Certificate as of __________, __________.
By: __________________________________
Name:
Title:
C-3
SCHEDULE 1
to the Compliance Certificate
For the Quarter/Year ended ___________, ______ (the "Statement Date")
[Attach Financial Statements]
C-4
SCHEDULE 2
to the Compliance Certificate
For the Quarter/Year ended ___________, ______ (the "Statement Date")
List of Material Subsidiaries and First Tier Foreign Subsidiaries:
C-5
SCHEDULE 3
to the Compliance Certificate
($ in 000's)
For the Quarter/Year ended ___________, ______ (the "Statement Date")
I. SECTION 7.10 - CAPITAL EXPENDITURES.
(a) If required to comply with Section 7.10(a):
For the four-quarter period beginning on September 1, 2001,
and each four-quarter period beginning on September 1
thereafter.
A. Capital expenditures: $
------------
B. Capital expenditures permitted to be made: $ 300,000
------------
C. Remaining availability (amount overspent) for
covenant compliance (Line I.(a).B - I.(a).A): $
------------
(b) If required to comply with Section 7.10(b):
For the four-quarter period beginning immediately after the
Cash Interest Coverage Ratio Compliance Date, and each
four-quarter period beginning on the twelve month
anniversary thereof.
A. Capital expenditures: $
------------
B. Capital expenditures permitted to be made: $ 600,000
------------
C. Remaining availability (amount overspent) for
covenant compliance (Line I.(b).B - I.(b).A): $
------------
II. SECTION 7.13(a) - CONSOLIDATED TANGIBLE NET WORTH.
Actual Consolidated Tangible Net Worth at the
Statement Date:
1. Shareholders' Equity: $
------------
2. Intangible Assets: $
------------
3. Consolidated Tangible Net Worth
(Line II.1 - Line II.2)[(1)]: $
------------
--------
[(1)] To the extent any charge relating to a reduction in goodwill taken by
Borrower and its Subsidiaries on a consolidated basis results in gain or income
relating thereto, then such gain or income shall be excluded from the
calculation of Consolidated Tangible Net Worth as of the Statement Date.
C-6
(i) If Statement Date is May 31, 2002:
A. Minimum required Consolidated
Tangible Net Worth: $ 2,000,000
------------
B. Excess (deficiency) for covenant compliance
(Line II.3 - II.(i).A): $
------------
(ii) If Statement Date is after May 31, 2002:
A. Starting figure for Consolidated Tangible Net Worth
as of the Closing Date[(2)]: $
------------
B. 50% of Consolidated Net Income for each fiscal
quarter ending after May 31, 2002 (no reduction for
net losses): $
------------
C. 50% of aggregate increases in Shareholders' Equity
of the Borrower and its Subsidiaries after May 31,
2002 from issuance and sale of Capital Stock of the
Borrower (including from conversion of debt
securities) during any fiscal quarter ending
subsequent to May 31, 2002: $
------------
D. Minimum required Consolidated Tangible Net Worth
(Lines II.(ii).A + II.(ii).B + II.(ii).C): $
------------
E. Excess (deficiency) for covenant compliance
(Line II.3 - II.(ii).D): $
------------
III. SECTION 7.13(b) - CASH INTEREST COVERAGE RATIO.
A. Consolidated EBITDA for four consecutive fiscal quarters
ending on the Statement Date ("Subject Period"):
1. Consolidated Net Income for Subject Period: $
------------
2. Consolidated Interest Charges for Subject
Period: $
------------
3. Provision for income taxes for Subject Period: $
------------
4. Depreciation expenses for Subject Period: $
------------
5. Amortization expenses for intangibles for
Subject Period: $
------------
6. Consolidated EBITDA (sum of Lines III.A.1
through III.A.5): $
------------
--------
[(2)] In the case of the fiscal quarter ending August 31, 2002, insert
$1,850,000,000.00; and in the case of any fiscal quarter ending after August 31,
2002, insert $1,800,000,000.00.
C-7
B. Non-Cash Restructuring Charges deducted in
calculating Consolidated Net Income for Subject Period: $
------------
C. Cash Restructuring Charges deducted in calculating
Consolidated Net Income for Subject Period:[(3)]
D. Consolidated Cash Interest Charges for Subject Period: $
------------
E. Cash Interest Coverage Ratio ((Line III.A.6 + Line III.B
+ Line III.C) / Line III.D): _____ to 1.0
Minimum required: _____ to 1.0
IV. SECTION 7.13(c) - CONSOLIDATED INDEBTEDNESS TO
CAPITALIZATION RATIO.
A. Consolidated Indebtedness at the Statement Date: $
------------
B. Shareholders' Equity at the Statement Date: $
------------
C. Consolidated Indebtedness to Capitalization Ratio
(Line IV.A / (Line IV.A + Line IV.B)): _____ to 1.0
Maximum permitted: 0.5 to 1.0
V. SECTION 7.13(d) - LIQUIDITY RATIO.
A. Cash and cash equivalents not subject to a Lien as of
the Statement Date
1. Cash-on-hand: $
------------
2. Cash equivalents: $
------------
3. Marketable securities: $
------------
4. Accounts receivable: $
------------
5. Cash and cash equivalents not
subject to a Lien
(sum of Lines V.A.1 through V.A.4): $
------------
B. Consolidated Indebtedness and accounts payable as
of the Statement Date
1. Accounts payable: $
------------
2. Consolidated Indebtedness: $
------------
--------
[(3)] The cumulative aggregate amount of Cash Restructuring Charges taken in
fiscal quarters ending on or after May 31, 2002 but on or prior to August 29,
2003 and which are included in calculating the Cash Interest Coverage Ratio
shall not exceed $235,000,000.
C-8
3. Consolidated Indebtedness and accounts
payable (Line V.B.1 + Line V.B.2): $
------------
C. Excluded Indebtedness as of the Statement Date
1. Subordinated Indebtedness: $
------------
2. Indebtedness under the XXXXX: $
------------
3. Attributable Indebtedness in respect of capital
leases and Synthetic Lease Obligations which are
fully cash collateralized: $
------------
4. Indebtedness described under clause (b) of the
definition of "Indebtedness" (unless and until
any such Indebtedness constitutes a matured
reimbursement obligation or matured
payment obligation and is no longer contingent): $
------------
5. Excluded Indebtedness
(sum of Lines V.C.1 through Line V.C.4): $
------------
D. Liquidity Ratio ((Line V.A.5) /
(Line V.B.3 - Line V.C.5)) ____ to 1.00
Minimum required: 1.20 to 1.00
Attached hereto is a schedule of marketable securities and their
associated values included in Line V.A.3 above.
C-9
SCHEDULE 4
to the Compliance Certificate
For the Quarter/Year ended ________, ____ (the "Statement Date")
[Attach list of marketable securities and associated values.]
C-10
