THE CHERRY CORPORATION
SECOND AMENDMENT TO CREDIT AGREEMENT
To each of the Banks signatory hereto
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of
May 12, 1995, as heretofore amended (as so amended, the "CREDIT AGREEMENT")
among the undersigned, The Cherry Corporation, a Delaware corporation (the
"COMPANY"), Xxxxxx Trust and Savings Bank, as Agent and you (the "BANKS").
All capitalized terms used herein without definition shall have the same
meanings herein as such terms have in the Credit Agreement.
The Company has requested that the Banks make certain amendments to the
Credit Agreement, and the Banks are willing to do so under the terms and
conditions set forth in this Amendment.
1. AMENDMENTS.
Upon acceptance hereof by the Required Banks in the space provided for
that purpose below, the Credit Agreement shall be and hereby is amended as
follows:
(a) Section 8.7 of the Credit Agreement shall be amended in its
entirety and as so amended shall read as follows:
"SECTION 8.7. CONSOLIDATED TANGIBLE NET WORTH FOR THE COMPANY
AND ITS SUBSIDIARIES. The Company shall at all times have
Consolidated Tangible Net Worth of not less than the Minimum Required
Amount. For purposes of this Section 8.7, the "MINIMUM REQUIRED
AMOUNT" shall mean $100,000,000 through February 28, 1999 and shall
increase (but never decrease) as of March 1, 1999 and as of each March
1st thereafter, by an amount equal to 50% of the cumulative positive
Consolidated Net Income earned each fiscal year commencing and
completed after February 28, 1999 (but without subtraction for any
negative Consolidated Net Income for any such fiscal year)."
(b) Section 8.8 of the Credit Agreement shall be amended in its
entirety and as so amended shall read as follows:
"SECTION 8.8. LEVERAGE RATIO FOR THE COMPANY AND ITS
SUBSIDIARIES. At all times the Company shall have a Leverage Ratio of
not greater than 50%."
(c) The ratio of "3.0 to 1.0" appearing in the last line of
Section 8.10 of the Credit Agreement shall be deleted and the ratio of "2.0
to 1.0" shall be inserted in its stead.
(d) The definition of the term "DOMESTIC CASH AND CASH EQUIVALENTS"
appearing in Section 10 of the Credit Agreement shall be amended in its
entirety and as so amended shall read as follows:
"CASH AND CASH EQUIVALENTS" shall mean as of the date of any
determination thereof, the sum of (i) all cash on hand of the Company
and its Subsidiaries held in deposit accounts and (ii) all investments
of the Company and its Subsidiaries of a type described in
Sections 8.13(a), (b) or (c) hereof maturing within sixty (60) days
from the date of determination thereof, all as determined on a
consolidated basis in accordance with GAAP."
(e) The term "DOMESTIC CASH AND CASH EQUIVALENTS" wherever appearing
the Credit Agreement (including all Schedules and Exhibits) shall be
deleted and the term "CASH AND CASH EQUIVALENTS" substituted therefor.
2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:
(a) The Company and the Required Banks shall have executed and
delivered this Amendment.
(b) Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Banks and their counsel.
(c) Cherry Semiconductor Corporation shall have executed and
delivered to the Banks its consent to this Amendment in the form set forth
below.
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3. REPRESENTATIONS.
In order to induce the Banks to execute and deliver this Amendment, the
Company hereby represents to the Banks that as of the date hereof, the
representations and warranties set forth in Section 6 of the Credit Agreement
are and shall be and remain true and correct (except that the representations
contained in Section 6.3 shall be deemed to refer to the most recent
financial statements of the Company delivered to the Bank) and no Default or
Event of Default has occurred and is continuing under the Credit Agreement or
shall result after giving effect to this Amendment.
4. MISCELLANEOUS.
(a) Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit
Agreement, the Notes, or any other instrument or document executed in
connection therewith, or in any certificate, letter or communication issued
or made pursuant to or with respect to the Credit Agreement, any reference in
any of such items to the Credit Agreement being sufficient to refer to the
Credit Agreement as amended hereby.
(b) The Company agrees to pay on demand all costs and expenses of or
incurred by the Agent in connection with the negotiation, preparation,
execution and delivery of this Amendment, including the fees and expenses of
counsel for the Agent.
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(c) This Amendment may be executed in any number of counterparts, and
by the different parties on different counterpart signature pages, all of
which taken together shall constitute one and the same agreement. Any of the
parties hereto may execute this Amendment by signing any such counterpart and
each of such counterparts shall for all purposes be deemed to be an original.
This Amendment shall be governed by the internal laws of the State of
Illinois.
Dated as of November 13, 1998.
THE CHERRY CORPORATION
By
Its _____________________________
Accepted and agreed to in Chicago, Illinois as of the date and year last
above written.
XXXXXX TRUST AND SAVINGS BANK,
individually and as Agent
By
Its Vice President
BANK OF AMERICA ILLINOIS
By
Its _____________________________
SOCIETE GENERALE
By
Its _____________________________
BAYERISCHE VEREINSBANK AG
By
Its _____________________________
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GUARANTOR'S CONSENT
The undersigned, Cherry Semiconductor Corporation, has heretofore
executed and delivered to the Banks a Guaranty dated May 12, 1995 and hereby
consents to the Amendment to the Credit Agreement as set forth above and
confirms that its Guaranty and all of the undersigned's obligations
thereunder remain in full force and effect. The undersigned further agrees
that the consent of the undersigned to any further amendments to the Credit
Agreement shall not be required as a result of this consent having been
obtained, except to the extent, if any, required by the Guaranty referred to
above.
CHERRY SEMICONDUCTOR CORPORATION
By
Its _____________________________
