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EXHIBIT 10.6
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EXECUTION COPY
WAIVER, CONSENT AND AMENDMENT dated as of
August 13, 2001 to the Credit Agreement dated as of
August 4, 1999, as amended and restated as of April
3, 2000, as amended (the "Credit Agreement"), among
ON SEMICONDUCTOR CORPORATION (formerly known as SCG
HOLDING CORPORATION, "Holdings"), SEMICONDUCTOR
COMPONENTS INDUSTRIES, LLC (the "Borrower"), the
LENDERS party thereto, THE CHASE MANHATTAN BANK, as
administrative agent, collateral agent and
syndication agent, and CREDIT LYONNAIS NEW YORK
BRANCH, CREDIT SUISSE FIRST BOSTON and XXXXXX
COMMERCIAL PAPER INC., as co-documentation agents.
A. Pursuant to the Credit Agreement, the Lenders have extended
credit to the Borrower, and have agreed to extend credit to the Borrower, in
each case pursuant to the terms and subject to the conditions set forth therein.
B. Holdings and the Borrower have requested that the Lenders agree
to amend and waive certain provisions of the Credit Agreement pursuant to the
terms and subject to the conditions set forth herein.
C. The undersigned Lenders are willing so to waive such provisions
and to amend the Credit Agreement pursuant to the terms and subject to the
conditions set forth herein.
D. Capitalized terms used but not defined herein have the meanings
assigned to them in the Credit Agreement, as amended hereby.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, and subject to the conditions set forth
herein, the parties hereto hereby agree as follows:
SECTION 1. Waiver. The undersigned Lenders hereby waive any Default
arising from the failure of the Borrower to comply with the requirements of
Section 6.12 or 6.13 of the Credit Agreement during the period from and
including June 29, 2001 to and including December 31, 2002.
SECTION 2. Amendments to Section 1.01 (Defined Terms). Section 1.01
of the Credit Agreement is hereby amended as follows:
(a) by deleting in its entirety the definition of the term
"Applicable Rate" and substituting the following therefor:
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"Applicable Rate" means, for any day (a) with respect to any Loan,
(i) 3.00% per annum, in the case of an ABR Loan, or 4.00% per annum,
in the case of a Eurodollar Loan, plus (ii) either (A) 2.00% per
annum prior to and including September 30, 2001, or (B) 3.00% per
annum from and including October 1, 2001 to and including the
Supplemental Interest Termination Date, or (C) 1.00% per annum on
and after the date that the aggregate principal amount of
outstanding Loans plus the LC Exposure is less than $750,000,000
(notwithstanding whether clause (A) or (B) above would otherwise
apply) to and including the Supplemental Interest Termination Date,
and (b) with respect to the commitment fees payable hereunder, 0.50%
per annum; provided that all Supplemental Interest shall cease to
accrue on the Supplemental Interest Termination Date and, if the
Supplemental Interest Termination Date does not occur on March 31,
2003, then any Supplemental Interest that accrues after March 31,
2003, shall be reduced to a rate per annum determined by multiplying
the rate otherwise applicable pursuant to clause (a)(ii) above by a
fraction, the numerator of which shall be equal to the total amount
of Supplemental Interest accrued prior to March 31, 2003, that
remains unpaid on March 31, 2003 (giving effect to any payments made
on March 31, 2003), and the denominator of which shall be equal to
the total amount of Supplemental Interest accrued prior to March 31,
2003.
(b) by deleting in its entirety the definition of the term
"Consolidated EBITDA" and substituting the following therefor:
"Consolidated EBITDA" means, for any period (subject to Section
1.05), Consolidated Net Income for such period plus (a) without
duplication and to the extent deducted in determining such
Consolidated Net Income, the sum of (i) consolidated interest
expense for such period, (ii) consolidated income tax expense for
such period, (iii) all amounts attributable to depreciation and
amortization for such period, (iv) the aggregate amount of letter of
credit fees accrued during such period, (v) all extraordinary
charges during such period, (vi) noncash expenses during such period
resulting from the grant of stock options to management and
employees of Holdings, the Borrower or any of the Subsidiaries,
(vii) the aggregate amount of deferred financing expenses for such
period, (viii) all other noncash expenses or losses of Holdings, the
Borrower or any of the Subsidiaries for such period (excluding any
such charge that constitutes an accrual of or a reserve for cash
charges for any future period), (ix) any non-recurring fees,
expenses or charges realized by Holdings, the Borrower or any of the
Subsidiaries for such period related to any offering of capital
stock or incurrence of Indebtedness, (x) noncash dividends on the
Cumulative Preferred Stock, (xi) cash restructuring charges (A)
during the fiscal year ending on December 31, 2001 and the portion
of the fiscal year ending on June 30, 2002 (or any fiscal quarter of
such portion) not in excess of $131,000,000 in the aggregate (for
all such periods), and (B) during any fiscal year (or any fiscal
quarter of any such fiscal year) ending on or prior to December 31,
2002 (or any quarter of such fiscal year) not in excess of an
additional $10,000,000 in the aggregate (for all such periods),
(xii) the amount of cash fees, service and product payments,
dividends and other distributions actually paid to the Borrower or a
Subsidiary by the
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OnMOS Joint Venture during such period and (xiii) fees and expenses
of Xxxxxxx & Marsal, Inc., paid by or reimbursed by the Borrower
pursuant to Section 9.03 hereof and minus (b) without duplication
and to the extent included in determining such Consolidated Net
Income, (i) any extraordinary gains for such period, (ii) all
noncash items increasing Consolidated Net Income for such period
(excluding any items that represent the reversal of any accrual of,
or cash reserve for, anticipated cash charges in any prior period)
and (iii) all gains during such period attributable to any sale or
disposition of assets (other than in the ordinary course of
business), all determined on a consolidated basis in accordance with
GAAP. For purposes of calculating the Leverage Ratio as of any date,
if the Borrower or any consolidated Subsidiary has made any
Permitted Acquisition or sale, transfer, lease or other disposition
of assets outside of the ordinary course of business permitted by
Section 6.05 during the period of four consecutive fiscal quarters
ending on the date on which the most recent fiscal quarter ended,
Consolidated EBITDA for the relevant period for testing compliance
shall be calculated after giving pro forma effect thereto, as if
such Permitted Acquisition or sale, transfer, lease or other
disposition of assets outside of the ordinary course of business
(and any related incurrence, repayment or assumption of Indebtedness
with any new Indebtedness being deemed to be amortized over the
applicable testing period in accordance with its terms) had occurred
on the first day of the relevant period for testing compliance.
(c) by deleting in its entirety the definition of the term "Interest
Payment Date" and substituting the following therefor:
"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each calendar month,
(b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than one month's duration, each day prior to the last
day of such Interest Period that occurs at intervals of one month's
duration after the first day of such Interest Period, and (c) with
respect to any Swingline Loan, the day that such Loan is required to
be repaid.
(d)(i) by deleting the phrase "other than Indebtedness permitted by
Section 6.01" at the end of clause (c) of the definition of the term "Prepayment
Event" and substituting the phrase "excluding any Indebtedness (other than,
prior to the Transition Date, Permitted Convertible Debt) permitted by Section
6.01"; and
(ii) by inserting the following text at the end of the definition
of the term "Prepayment Event":
(d) prior to the Transition Date, the issuance by Holdings, the
Borrower or any Subsidiary of any Equity Interests, other than (i)
any such issuance by the Borrower or any Subsidiary to Holdings or
the Borrower or to another Subsidiary, (ii) the issuance of Equity
Interests expressly permitted by Section 6.01(d), (iii) the issuance
of common stock or preferred stock of Holdings pursuant to the TPG
Equity Purchase and (iv) Equity Interests issued in the form, or
upon the exercise of, options to acquire common stock of Holdings
issued to members of management and employees of Holdings, the
Borrower or any Subsidiary and options or warrants in respect of the
capital stock of Holdings issued as compensation to consultants to
Holdings, the Borrower or any Subsidiary.
(e) by adding the following text at the end of the definition of the
term "Consolidated Net Income":
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For purposes of calculating Consolidated EBITDA and Excess Cash
Flow, Consolidated Net Income shall be calculated excluding all
income, expenses, gains, losses and other items of the OnMOS Joint
Venture.
(f) by deleting in its entirety clause (a) of the definition of the
term "Excess Cash Flow" and substituting the following therefor:
(a) Consolidated Net Income for such fiscal year, adjusted to
exclude any gains or losses attributable to Prepayment Events, plus
(without duplication) the amount of cash dividends or other
distributions actually paid to the Borrower or a Subsidiary by the
OnMOS Joint Venture during such period; plus
(g) by adding the text "(plus, without duplication, any Supplemental
Interest deducted in calculating Consolidated EBITDA)" after the text
"Consolidated EBITDA" in the definition of the term "Leverage Ratio".
(h) to add each of the following defined terms in the appropriate
alphabetical order:
"Facilities Transfer" means the transfer by the Borrower and/or one
or more of its Subsidiaries of the packaging and testing facilities
located in Carmona, Philippines, Seremban, Malaysia and Guadalajara,
Mexico, which transfer may involve one or more transactions or
series of transactions taking the form of (i) sales, leases or other
transfers or dispositions of assets, (ii) sales or other transfers
or dispositions of capital stock and/or debt securities of
Subsidiaries that directly or indirectly own such facilities, (iii)
other types of transfers or dispositions, (iv) facilities closures
or (v) any one or combination of the foregoing.
"Interest Expense Coverage Ratio" shall have the meaning assigned to
such term in Section 6.12.
"Liquidity Amount" means, at any time, the aggregate amount of cash
and Permitted Investments owned by the Borrower and its consolidated
subsidiaries at such time, excluding (i) cash or Permitted
Investments owned by the OnMOS Joint Venture and (ii) cash or
Permitted Investments subject to any Lien in favor of any Person
other than the Collateral Agent for the benefit of the Secured
Parties.
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"OnMOS Joint Venture" means a Person organized (or to be organized)
in a jurisdiction outside the United States to which Subsidiaries of
Holdings will contribute the assets and operations of their TMOS
business.
"Partial Facilities Transfer" shall have the meaning assigned to
such term in Section 6.15.
"Permitted Convertible Debt" means Indebtedness of Holdings in
respect of subordinated convertible debt securities (i) that is
unsecured and subordinated to the Obligations on terms no less
favorable to the Lenders than the terms of the Subordinated Debt,
(ii) that does not provide for scheduled payments of principal
earlier than 91 days after the final scheduled repayment of
principal of the Term Loans, (iii) that is convertible into common
equity of Holdings and (iv) the other terms (excluding the aggregate
principal amount and conversion rate thereof) of which are
reasonably satisfactory to the Administrative Agent in all material
respects.
"Qualified Liquidity Financing" means the issuance by Holdings of
preferred stock, common stock or warrants in respect of preferred
stock or common stock to TPG, or the incurrence by Holdings or the
Borrower of Indebtedness for borrowed money owed to TPG, in each
case for cash consideration; provided that (a) any such Indebtedness
shall be unsecured, (b) the terms of any such preferred stock or
Indebtedness shall not include any covenants, redemption provisions,
events of default or other terms that would entitle the holder
thereof to make any claim or assert any right or remedy prior to
payment in full of the Obligations and termination of the
Commitments and (c) prior to any such issuance of preferred stock or
incurrence of Indebtedness, TPG and Holdings or the Borrower, as
applicable, shall have entered into an agreement with the
Administrative Agent, in form and substance reasonably satisfactory
to the Administrative Agent, effectively subordinating any and all
obligations in respect of such preferred stock or Indebtedness to
the Obligations and providing that, prior to repayment in full of
all the Obligations and termination of the Commitments, the holder
or holders of such preferred stock or Indebtedness, as applicable,
shall not be entitled to receive any cash payments in respect
thereof or to exercise any rights or remedies (other than, in the
case of clauses (b) and (c) above, rights and remedies the exercise
of which would not constitute or result in a Default).
"Senior Leverage Ratio" means, on any date, the ratio of (a) Total
Senior Indebtedness as of such date to (b) Consolidated EBITDA
(plus, without duplication, any Supplemental Interest deducted in
calculating Consolidated EBITDA) for the period of four consecutive
fiscal quarters of Holdings ended on such date.
"Supplemental Interest" means the portion of any interest accrued in
respect of any Loan attributable to clause (a)(ii) of the definition
of the term Applicable Rate.
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"Supplemental Interest Termination Date" means (a) if all
Supplemental Interest accrued to but excluding March 31, 2003, has
been paid on or prior to March 31, 2003, then March 31, 2003, or (b)
otherwise, June 30, 2003.
"Total Senior Indebtedness" means, as of any date, the aggregate
principal amount of Indebtedness of Holdings, the Borrower and the
Subsidiaries outstanding on such date, determined on a consolidated
basis, excluding the Subordinated Debt, any Permitted Convertible
Debt, the Junior Subordinated Note, Qualified Liquidity Financing
and any other Indebtedness that is effectively subordinated to the
Obligations on terms no less favorable to the Lenders than the terms
of the Subordinated Debt.
"TPG Equity Purchase" means the purchase by TPG of common stock or
preferred stock of Holdings for cash consideration in an amount
equal to $100,000,000 and the immediate contribution by Holdings to
the Borrower of such cash as common equity; provided that, in the
case of any such purchase of preferred stock, (a) the terms of such
preferred stock shall not include any covenants, redemption
provisions, events of default or other terms that would entitle the
holder thereof to make any claim or assert any right or remedy prior
to payment in full of the Obligations and termination of the
Commitments and (b) prior to any such issuance of preferred stock,
TPG and Holdings shall have entered into an agreement with the
Administrative Agent, in form and substance reasonably satisfactory
to the Administrative Agent, effectively subordinating any and all
obligations in respect of such preferred stock to the Obligations
and providing that, prior to the repayment in full of all the
Obligations and termination of the Commitments, the holder or
holders of such preferred stock shall not be entitled to receive any
cash payments in respect thereof or to exercise any rights (other
than in the case of clauses (a) and (b) above, rights and remedies
the exercise of which would not constitute or result in a Default).
"Transition Date" means the date on which the Borrower shall have
delivered to the Administrative Agent financial statements
demonstrating that as of the end of the immediately preceding fiscal
quarter of Holdings (a) the Leverage Ratio was less than or equal to
3.75 to 1.00, (b) the Senior Leverage Ratio was less than or equal
to 2.75 to 1.00 and (c) the Interest Expense Coverage Ratio for the
period of four consecutive fiscal quarters ending on the last day of
such quarter was greater than or equal to 2.50 to 1.00.
SECTION 3. Amendments to Section 2.11 (Prepayment of Loans). Section
2.11 of the Credit Agreement is hereby amended as follows:
(a) Paragraph (c) of Section 2.11 of the Credit Agreement is deleted
in its entirety and replaced with the following:
(c) (i) Prior to the Transition Date, in the event and on each
occasion that any Net Proceeds are received by or on behalf of
Holdings, the Borrower or any Subsidiary in respect of any
Prepayment Event, the Borrower shall, within ten Business Days after
such Net Proceeds are received, prepay
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Term Borrowings in an aggregate amount equal to (A) 100% (or 50%, in
the case of Net Proceeds from the sale of Equity Interests in the
OnMOS Joint Venture) of such Net Proceeds if such Net Proceeds
result from an event described in clause (a) of the definition of
the term "Prepayment Event", (B) 100% of such Net Proceeds if such
Net Proceeds result from an event (other than the issuance of
Permitted Convertible Debt) described in clause (b) or (c) of the
definition of the term "Prepayment Event" and (C) 75% of such Net
Proceeds if such Net Proceeds result from the issuance of Permitted
Convertible Debt or an event described in clause (d) of the
definition of the term "Prepayment Event".
(ii) After the Transition Date, in the event and on each occasion
that any Net Proceeds are received by or on behalf of Holdings, the
Borrower or any Subsidiary in respect of any Prepayment Event, the
Borrower shall, within ten Business Days after such Net Proceeds are
received, prepay Term Borrowings in an aggregate amount equal to
such Net Proceeds, provided that, in the case of any event described
in clause (a) of the definition of the term "Prepayment Event"
(other than the sale, transfer or other disposition of Receivables
in connection with a Permitted Receivables Financing), if the
Borrower shall deliver to the Administrative Agent a certificate of
a Financial Officer to the effect that Holdings, the Borrower and
the Subsidiaries intend to apply the Net Proceeds from such event
(or a portion thereof specified in such certificate), within 180
days after receipt of such Net Proceeds, to acquire real property,
equipment or other assets to be used in the business of the Borrower
and the Subsidiaries, and certifying that no Default has occurred
and is continuing, then no prepayment shall be required pursuant to
this paragraph in respect of the Net Proceeds in respect of such
event (or the portion of such Net Proceeds specified in such
certificate, if applicable) except to the extent of any such Net
Proceeds therefrom that have not been so applied by the end of such
180-day period, at which time a prepayment shall be required in an
amount equal to such Net Proceeds that have not been so applied.
(b) Paragraph (d) of Section 2.11 of the Credit Agreement is amended
by deleting the text "50%" and replacing it with the text "75% (or, after the
Transition Date, 50%)".
SECTION 4. Amendment to Section 2.13 (Interest). Paragraph (d) of
Section 2.13 of the Credit Agreement is hereby amended by adding the following
text at the end of such paragraph:
Notwithstanding the foregoing, Supplemental Interest shall not be
required to be paid at the time required by the preceding sentence,
except that (A) 50% of the total amount of Supplemental Interest
accrued prior to March 31, 2003 shall be payable on March 31, 2003
(to the extent not previously paid) and (B) if the Supplemental
Interest Termination Date does not occur on March 31, 2003, then all
Supplemental Interest remaining unpaid on June 30, 2003, shall be
payable in full on June 30, 2003; provided that all unpaid
Supplemental Interest shall be payable upon repayment in full of the
Loans.
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SECTION 5. Amendments to Section 5.01 (Financial Statements and
Other Information). Section 5.01 of the Credit Agreement is hereby amended as
follows:
(a) Clause (c) of Section 5.01 is amended by deleting the text
"Sections 6.12 and 6.13" and inserting the text "Sections 6.12, 6.13, and, prior
to the Transition Date, 6.14, 6.15 and 6.16" therefor.
(b) Clause (f) of Section 5.01 is amended by deleting the text "and"
following the ";".
(c) Clause (g) of Section 5.01 is amended by substituting the text
"; and" for the text ".".
(d) Section 5.01 is further amended by inserting the following new
clause (h):
(h) in respect of each fiscal month ending on or prior to the
earlier of (i) the Transition Date and (ii) March 31, 2003, (A)
within 30 days after the end of each of the first two fiscal months
of each fiscal quarter of Holdings, (1) Holdings' unaudited
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for each
such month in substantially the form of Schedule 5.01(h) and (2) a
letter executed by a Financial Officer describing the results of the
Borrower's business for such fiscal month and for the then elapsed
portion of the fiscal year and (B) within 45 days after the end of
the last fiscal month of each fiscal quarter of Holdings, (1)
Holdings' unaudited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of
the end of and for such fiscal quarter, in substantially the form of
Schedule 5.01(h), (2) a letter executed by a Financial Officer
describing the results of the Borrower's business for such fiscal
month and for the then elapsed portion of the fiscal year and (3) a
variance analysis setting forth Holdings' consolidated financial
results for such quarter relative to the figures set forth in
Holdings' financial plan provided to the Lenders in attendance at
the June 28, 2001 bank meeting held at the offices of the
Administrative Agent, including an updated 6-month cash reforecast
based upon Holdings' consolidated financial results for such
quarter.
SECTION 6. Amendments to Section 6.01 (Indebtedness; Certain Equity
Securities). Section 6.01 of the Credit Agreement is hereby amended as follows:
(a) Clause (ix) of Section 6.01(a) is hereby deleted in its entirety
and replaced by "(ix) Permitted Convertible Debt;".
(b) Section 6.01 is hereby further amended by inserting the
following new paragraphs (e) and (f):
(e) Notwithstanding anything contained in Section 6.01(a), (b) or
(c), (i) Holdings may issue preferred stock, or Holdings or the
Borrower may incur Indebtedness, in each case pursuant to a
Qualified Liquidity
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Financing and (ii) Holdings may issue preferred stock pursuant to
the TPG Equity Purchase.
(f) Notwithstanding anything contained in Section 6.01(a), the OnMOS
Joint Venture may incur Indebtedness that is guaranteed by Mosel in
an aggregate principal amount not exceeding $10,000,000 at any time
outstanding, provided that such Indebtedness shall not be Guaranteed
by, or otherwise be recourse to, any of Holdings, the Borrower or
the Subsidiaries (other than the OnMOS Joint Venture or any
subsidiaries of the OnMOS Joint Venture). Any such Indebtedness of
the OnMOS Joint Venture shall be deemed not to be Indebtedness of
Holdings, the Borrower and the Subsidiaries for the purpose of
calculating Funded Indebtedness and Total Senior Indebtedness and
any interest expense with respect to such Indebtedness shall be
excluded from consolidated interest expense for the purpose of
calculating Consolidated Cash Interest Expense.
SECTION 7. Amendments to Section 6.04 (Investments, Loans, Advances,
Guarantees and Acquisitions). Section 6.04 of the Credit Agreement is hereby
amended as follows:
(a) Clause (h) of Section 6.04 is hereby amended by adding the text
"after the Transition Date," at the beginning thereof.
(b) Clause (s) of Section 6.04 is hereby amended by deleting the
text "and" at the end thereof.
(c) Clause (t) of Section 6.04 is amended by (i) deleting the text
"$100,000,000" and replacing it with the text "$40,000,000 (or, after the
Transition Date, $100,000,000)" and (ii) by deleting the text "." at the end
thereof and replacing it with the text "; and".
(d) Section 6.04 is further amended by adding the following new
Clause (u):
(u) the creation by the Borrower of a limited liability company
organized under the laws of a jurisdiction in the United States of
America and the Borrower's contribution to the OnMOS Joint Venture
through such limited liability company of (i) $51 in exchange for a
51% interest therein and (ii) the assets and operations of the TMOS
business of the Subsidiaries and Holdings; provided that promptly
following the contribution of such assets and operations to the
OnMOS Joint Venture contemplated by this clause (u), the Borrower
shall deliver to the Administrative Agent copies of all definitive
documentation regarding such investment, certified by a Financial
Officer as complete and correct.
SECTION 8. Amendments to Section 6.05 (Asset Sales). Section 6.05 of
the Credit Agreement is hereby amended as follows:
(a) by deleting clause (d) in its entirety and replacing
it with the text "(d) the Borrower may consummate the Facilities
Transfer;".
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(b) by deleting the text "$50,000,000" in clause (e) and replacing
it with the text "$30,000,000 (or, after the Transition Date, $50,000,000)".
(c) by inserting the text ", except for sales of Equity Interests in
the OnMOS Joint Venture to the extent such sales do not result in the failure of
the Borrower to comply with Section 6.17" immediately following the text
"Subsidiary" and before the text ")" in clause (e).
(d) by adding the text "and" at the end of clause (e) thereof;
(e) by adding the following new paragraph at the end thereof:
(f) sales, transfers and other dispositions of assets listed on
Schedule 6.05 hereto.
(f) by deleting in its entirety the final proviso thereto and
substituting the following text therefor:
provided that (i) all sales, transfers, leases and other dispositions permitted
hereby shall be made for fair value (other than those permitted by clause (b)
above) and for consideration of at least 80% cash or cash equivalents (other
than those permitted by clause (b) and (f) above) and (ii) the fair value of all
consideration (other than cash and cash equivalents) received in respect of
dispositions permitted by clause (f) above does not exceed $15,000,000.
SECTION 9. Amendment to Section 6.09 (Transactions with Affiliates).
Section 6.09 of the Credit Agreement is hereby amended:
(a) by deleting the text "and (i)" and replacing it with
the text ", (i)" and deleting the text "." at the end thereof; and
(b) by adding the following new text at the end of
Section 6.09:
and (j) any ancillary agreements entered into between Holdings, the
Borrower or any Subsidiary and the OnMOS Joint Venture at any time
that Holdings owns directly and indirectly less than 80% of the
economic interest of the OnMOS Joint Venture; provided, however,
that, prior to the Transition Date, all management fees payable to
TPG or its Affiliates shall accrue and not be payable in cash, it
being understood that any such fees may be paid by the issuance of
common stock of or warrants in respect of common stock of Holdings
and any other fees may be paid in cash
SECTION 10. Amendment to Section 6.12 (Interest Expense Coverage
Ratio). Section 6.12 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
SECTION 6.12. Interest Expense Coverage Ratio. (a) The
Borrower will not permit the ratio of (i) Consolidated EBITDA (plus,
without duplication, any Supplemental Interest deducted in
calculating Consolidated EBITDA) to (ii) Consolidated Cash Interest
Expense (excluding any Supplemental Interest otherwise included
therein) (the "Interest Expense
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Coverage Ratio"), in each case for any period of four consecutive fiscal
quarters ending on any date during any period set forth below, to be less than
the ratio set forth below opposite such period:
Period Ratio
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January 1, 2003 to and including December 31, 2003 2.00 to 1.00
January 1, 2004 to and including July 2, 2004 2.25 to 1.00
July 3, 2004 to and including December 31, 2004 2.50 to 1.00
January 1, 2005 to and including July 1, 2005 2.75 to 1.00
July 2, 2005 and thereafter 3.00 to 1.00
(b) For purposes of calculating the Interest Expense
Coverage Ratio under clause (a) of this Section 6.12, Consolidated
EBITDA for the period of four consecutive fiscal quarters of
Holdings (i) ended March 31, 2003 shall be deemed to be equal to
Consolidated EBITDA for the fiscal quarter then ended multiplied by
4, (ii) ended June 30, 2003 shall be deemed to be equal to
Consolidated EBITDA for the two consecutive fiscal quarters then
ended multiplied by 2 and (iii) ended September 30, 2003 shall be
deemed to be equal to Consolidated EBITDA for the three consecutive
fiscal quarters then ended multiplied by 4/3.
SECTION 11. Amendment to Section 6.13 (Leverage Ratio). Section 6.13
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:
SECTION 6.13. Leverage Ratio. (a) The Borrower will not
permit the Leverage Ratio as of the end of any fiscal quarter during
any period set forth below to exceed the ratio set forth opposite
such period:
Period Ratio
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January 1, 2003 to and including June 30, 2003 5.00 to 1.00
July 1, 2003 to and including December 31, 2003 4.75 to 1.00
January 1, 2004 to and including July 2, 2004 4.50 to 1.00
July 3, 2004 to and including December 31, 2004 4.25 to 1.00
January 1, 2005 to and including July 1, 2005 4.00 to 1.00
July 2, 2005 and thereafter 3.75 to 1.00
(b) For purposes of calculating the Leverage Ratio under
clause (a) of this Section 6.13, Consolidated EBITDA for the period
of
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four consecutive fiscal quarters of Holdings (i) ended March 31,
2003 shall be deemed to be equal to Consolidated EBITDA for the
fiscal quarter then ended multiplied by 4, (ii) ended June 30, 2003
shall be deemed to be equal to Consolidated EBITDA for the two
consecutive fiscal quarters then ended multiplied by 2 and (iii)
ended September 30, 2003 shall be deemed to be equal to Consolidated
EBITDA for the three consecutive fiscal quarters then ended
multiplied by 4/3. In addition, for purposes of this Section 6.13,
the Funded Indebtedness component of the Leverage Ratio shall be
calculated excluding any Supplemental Interest otherwise included
therein.
SECTION 12. Amendment to Section 6.14 (Capital Expenditures).
Section 6.14 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
SECTION 6.14. Capital Expenditures. The Borrower and
Subsidiaries shall not incur or make any Capital Expenditures:
(a) prior to the Transition Date, during any period set
forth below in an amount exceeding the amount set forth opposite
such period:
Maximum
Period Capital Expenditures
------ --------------------
July 1, 2001 to December 31, 2001 $35,000,000
January 1, 2002 to March 31, 2003 $52,500,000
April 1, 2003 to December 31, 2003 $87,500,000
Each fiscal year thereafter $150,000,000
Notwithstanding the foregoing, if the actual amount of Capital
Expenditures incurred or made by the Borrower and its Subsidiaries
during the period from July 1, 2001 to December 31, 2001, is less
than $35,000,000, then the Borrower and its Subsidiaries may incur
or make additional Capital Expenditures during the period January 1,
2002 to March 31, 2003, in excess of $52,500,000, but such
additional Capital Expenditures during such period shall not exceed
the lesser of (i) $15,000,000 and (ii) the excess of $35,000,000
over the actual amount of Capital Expenditures incurred or made from
July 1, 2001, to December 31, 2001.
(b) after the Transition Date, in an amount exceeding
$150,000,000 in any fiscal year, provided that such $150,000,000
permitted amount shall be increased with respect to any fiscal year
by an amount equal to the portion of Excess Cash Flow for the
immediately preceding fiscal year that is not required to be applied
to make prepayments of Loans pursuant to Section 2.11(d).
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After the Transition Date the amount of Capital Expenditures
permitted to be made by the immediately preceding paragraph (b) in
respect of any fiscal year shall be increased by (i) the unused
amount of Capital Expenditures that were permitted to be made during
the immediately preceding fiscal year pursuant to the immediately
preceding paragraph (b) (without giving effect to the proviso to
such paragraph) minus (ii) an amount equal to the unused permitted
Capital Expenditures carried forward to such preceding fiscal year.
For purposes of determining compliance with this
Section, Capital Expenditures incurred or made by the OnMOS Joint
Venture and its subsidiaries shall be disregarded.
SECTION 13. Addition of New Section 6.15 to the Credit Agreement.
The Credit Agreement is hereby amended by adding the following new section
following Section 6.14:
SECTION 6.15. Minimum Consolidated EBITDA. (a) The
Borrower will not permit Consolidated EBITDA for any period set
forth below to be less than the amount set forth opposite such
period (subject to adjustment pursuant to paragraph (b) below):
Period Amount
------ ------
July 1, 2001 to and including $(15,000,000)
December 31, 2001
July 1, 2001 to and including $0.0
March 31, 2002
July 1, 2001 to and including $35,000,000
June 30, 2002
October 1, 2001 to and including $80,000,000
September 30, 2002
January 1, 2002 to and including $120,000,000
December 31, 2002
(b) Following the completion of the Facilities Transfer,
the amounts set forth in paragraph (a) above shall be reduced (i)
for the period from July 1, 2001 to and including December 31, 2001,
by $31,400,000, (ii) for the period from July 1, 2001 to and
including March 31, 2002, by $47,100,000 and (iii) for each of the
periods (A) from July 1, 2001 to and including June 30, 2002, (B)
from October 1, 2001 to and including September 30, 2002 and (C)
from January 1, 2002 to and including December 31, 2002, by
$62,800,000.
For purposes of this paragraph (b), Consolidated EBITDA for any
period during which the Facilities Transfer is completed shall be
calculated after giving pro forma effect to the Borrower's
consummation of the Facilities
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Transfer, as if the consummation of the Facilities Transfer had
occurred on the first day of the relevant period for testing
compliance.
Following any transfer in partial completion of the Facilities
Transfer (a "Partial Facilities Transfer"), the Borrower and the
Administrative Agent shall agree to reduce the amount set forth in
paragraph (a) above in respect of the period during which such
Partial Facilities Transfer occurred, provided that (i) any such
reduction shall be based on the ratio of (A) Consolidated EBITDA
attributable to all of the business of Holdings, the Borrower and
the Subsidiaries transferred pursuant to such Partial Facilities
Transfer to (B) the Consolidated EBITDA attributable to all assets
of the business of Holdings, the Borrower and its Subsidiaries that
may be transferred pursuant to the Facilities Transfer, (ii) any
such reduction shall not exceed the amount of the reduction set
forth for the relevant period in paragraph (b) above that would be
allowed for the relevant period and (iii) there shall be such a
reduction in respect of no more than one Partial Facilities
Transfer.
SECTION 14. Addition of New Section 6.16 to the Credit Agreement.
The Credit Agreement is hereby amended by adding the following new section
following Section 6.15:
SECTION 6.16. Minimum Cash and Cash Equivalents. Prior
to the Transition Date, the Borrower will not permit the Liquidity
Amount for any period of five consecutive Business Days ending on or
after the date hereof (calculated at the close of business on each
Business Day), to be less than $50,000,000.
SECTION 15. Addition of New Section 6.17 to the Credit Agreement.
The Credit Agreement is hereby amended by adding the following new section
following Section 6.16:
SECTION 6.17. OnMOS Joint Venture Interest. At all times
after consummation of its investment in the OnMOS Joint Venture the
Borrower shall own (directly or indirectly) at least 51% of the
voting power represented by the outstanding Equity Interests of the
OnMOS Joint Venture.
SECTION 16. Schedules. The Credit Agreement is hereby amended by
adding a new Schedule 5.01(h) and a new Schedule 6.05 in the respective forms
attached to this Amendment.
SECTION 17. Amendments to Section 7.01 (Events of Default). Section
7.01 is hereby amended as follows:
(a) Clause (n) is hereby amended by deleting the text
"or" at the end thereof.
(b) Clause (o) is hereby amended by adding the text "or"
at the end thereof.
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(c) Section 7.01 is hereby further amended by inserting
the following new paragraph (p) at the end thereof:
(p) the TPG Equity Purchase shall not have
been consummated on or prior to September 7, 2001;
SECTION 18. Amendment to Section 9.04 (Successors and Assigns).
Paragraph (b) of Section 9.04 of the Credit Agreement is hereby amended by
deleting the text "$5,000,000" and replacing it with the text "$1,000,000".
SECTION 19. Consent to Consultant. For the period from the date
hereof through the earlier of (a) the Transition Date and (b) March 31, 2003,
the Borrower consents to the engagement of (on terms to be agreed upon), and
agrees to pay (in accordance with Section 9.03 of the Credit Agreement) the
reasonable fees and reasonable out-of-pocket expenses (not to exceed $250,000 in
the aggregate) of, Xxxxxxx & Marsal, Inc., a third party consulting firm engaged
by counsel to the Administrative Agent to evaluate and monitor the Borrower's
business plan and perform other services requested by counsel to the
Administrative Agent with respect to the Borrower. The Borrower will cooperate
with Xxxxxxx & Marsal, Inc., in connection with its performance of services for
counsel to the Administrative Agent (including providing access to the records
(financial and otherwise), properties, books, contracts and personnel of the
Borrower and its Subsidiaries).
SECTION 20. Amendment Fee. In consideration of the agreements of the
Lenders contained in this Amendment, the Borrower agrees to pay to the
Administrative Agent, for the account of each Lender that delivers an executed
counterpart of this Amendment at or prior to 12:00 (noon) on August 13, 2001, an
amendment fee in an amount equal to 0.25% of the sum of such Lender's Revolving
Commitment and outstanding Term Loans; provided that such fee shall not be
payable unless and until this Amendment becomes effective as provided in Section
20.
SECTION 21. Representations and Warranties. Each of Holdings and the
Borrower represents and warrants to the Administrative Agent and to each of the
Lenders that:
(a) This Amendment has been duly authorized, executed and delivered
by each of Holdings and the Borrower and constitutes a legal, valid and binding
obligation of Holdings and the Borrower, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
(b) After giving effect to this Amendment, each of the
representations and warranties of Holdings and the Borrower set forth in the
Loan Documents is true and correct on and as of the date hereof, except to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties are true and correct as of
such earlier date.
(c) Immediately after giving effect to this Amendment, no Default
shall have occurred and be continuing.
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SECTION 22. Conditions to Effectiveness. This Amendment shall become
effective as of the date first above written when (i) the Administrative Agent
shall have received counterparts of this Amendment that, when taken together,
bear the signatures of (a) Holdings, (b) the Borrower and (c) the Required
Lenders, (ii) all fees and expenses required to be paid or reimbursed by the
Borrower under or in connection with this Amendment or the Credit Agreement and
(in the case of expenses to be reimbursed, including fees, charges and
disbursements of counsel or other advisors) invoiced in writing to the Borrower
on or prior to August 13, 2001, shall have been paid or reimbursed, as
applicable (including all fees and disbursements of counsel previously
invoiced), (iii) the Administrative Agent and the Borrower shall have received a
written acknowledgment from TPG that all management fees (other than fees
permitted by the final proviso to Section 6.09) payable to TPG or its Affiliates
by Holdings, the Borrower or any Subsidiary shall accrue and not be payable
until such time as the Obligations shall have been repaid in full and (iv)
Holdings shall have received a written commitment to make, on or prior to
September 7, 2001, the TPG Equity Purchase and a copy of such written commitment
shall have been delivered to the Administrative Agent.
SECTION 23. Credit Agreement. Except as specifically waived or
amended hereby, the Credit Agreement shall continue in full force and effect in
accordance with the provisions thereof as in existence on the date hereof. After
the date hereof, any reference to the Credit Agreement shall mean the Credit
Agreement as amended or modified hereby. This Amendment shall be a Loan Document
for all purposes.
SECTION 24. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 25. Counterparts. This Amendment may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one agreement. Delivery of an executed
signature page to this Amendment by facsimile transmission shall be effective as
delivery of a manually signed counterpart of this Amendment.
SECTION 26. Expenses. The Borrower agrees to reimburse the
Administrative Agent for its reasonable out-of-pocket expenses in connection
with this Amendment, including the fees, charges and disbursements of Cravath,
Swaine & Xxxxx, counsel for the Administrative Agent.
SECTION 27. Headings. The Section headings used herein are for
convenience of reference only, are not part of this Amendment and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year
first written above.
ON SEMICONDUCTOR CORPORATION,
by /s/
----------------------------
Name: Authorized Officer
Title:
SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC,
by /s/
----------------------------
Name: Authorized Officer
Title:
THE CHASE MANHATTAN BANK,
individually and as administrative
agent,
by /s/
----------------------------
Name: Authorized Officer
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
individually and as co-documentation
agent,
by /s/
----------------------------
Name: Authorized Officer
Title:
CREDIT SUISSE FIRST BOSTON
individually and as co-documentation
agent,
by /s/
----------------------------
Name: Authorized Officer
Title:
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XXXXXX COMMERCIAL PAPER INC.,
individually and as co-documentation
agent,
by /s/
----------------------------
Name:
Title: Authorized Officer
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SIGNATURE PAGE TO THE WAIVER, CONSENT AND
AMENDMENT DATED AS OF AUGUST 13, 2001 TO THE
CREDIT AGREEMENT AMONG ON SEMICONDUCTOR
CORPORATION, SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC, THE LENDERS PARTY THERETO,
THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE
AGENT, COLLATERAL AGENT AND SYNDICATION
AGENT, AND CREDIT LYONNAIS NEW YORK BRANCH,
CREDIT SUISSE FIRST BOSTON AND XXXXXX
COMMERCIAL PAPER INC., AS CO-DOCUMENTATION
AGENTS.
Name of Institution
by /s/
----------------------------
Name:
Title: Authorized Officer
