1
EXHIBIT 10.38
FIRST AMENDMENT
TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
First Amendment dated as of May 19, 1997 to Revolving Credit and Term
Loan Agreement (the "First Amendment"), by and among FLEXTRONICS INTERNATIONAL
LTD., a company incorporated in Singapore (the "Borrower"), BANKBOSTON, N.A.
(FORMERLY KNOWN AS THE FIRST NATIONAL BANK OF BOSTON) and the other lending
institutions listed on Schedule 1 to the Credit Agreement (as hereinafter
defined) (the "Banks"), amending certain provisions of the Revolving Credit and
Term Loan Agreement dated as of March 27, 1997 (as amended and in effect from
time to time, the "Credit Agreement") by and among the Borrower, the Banks and
BankBoston, N.A. as agent for the Banks (the "Agent"). Terms not otherwise
defined herein which are defined in the Credit Agreement shall have the same
respective meanings herein as therein.
WHEREAS, the Borrower and the Banks have agreed to modify certain
terms and conditions of the Credit Agreement as specifically set forth in this
First Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. AMENDMENT TO SECTION 9 OF THE CREDIT AGREEMENT. Section 9 of
the Credit Agreement is hereby amended as follows:
(a) Section 9.14 of the Credit Agreement is hereby amended
by deleting the words "forty-five (45) days following the Closing
Date" which appear in Section 9.14 and substituting in place thereof
the words "June 30, 1997";
(b) Section 9.16 of the Credit Agreement is hereby amended
by deleting the words "within forty-five days following the Closing
Date" which appear in Section 9.16 and substituting in place thereof
the words "by June 30, 1997"; and
(c) Section 9.17 of the Credit Agreement is hereby amended
by deleting Section 9.17 in its entirety and restating it as follows:
9.17. PAYMENT OF ASTRON OBLIGATION. The Borrower
shall make all payments under the Astron Sales Agreement, the
Services Agreement dated February 2, 1996 between the Borrower,
Astron Technologies Limited and Xxxxxxx Xxxx (the "Xxxx Service
Agreement") and the Supplemental Services Agreement dated February
2, 1996 between Astron Group Limited and Xxxxxxx Xxxx (the
"Supplemental Xxxx Agreement") which are able to be paid pursuant
to such agreements in Astron Consideration Shares (as to the
Astron Sales Agreement) or ordinary shares of the Borrower
(pursuant to the Xxxx Service Agreement and Supplemental Xxxx
Agreement); provided, however, the Borrower shall be permitted to
make such payments in cash so long as
2
Page 2
no Default or Event of Default has occurred and is continuing
and the Borrower can demonstrate to the satisfaction of the Agent
that the Leverage Ratio at the time of such cash payments is equal
to or less than 2.50:1.00 both before and after giving effect to
each such cash payment.
SECTION 2. AMENDMENT TO SECTION 27 OF THE CREDIT AGREEMENT. Section
27 of the Credit Agreement is hereby amended by inserting immediately after the
words "the amount of the Commitments of the Banks," which appear in the second
sentence of Section 27 the words "the release of any of the Guarantors, the
release of all or substantially all of the Collateral, the provisions of this
Section 27,".
SECTION 3. CONDITIONS TO EFFECTIVENESS. This First Amendment shall
not become effective until the Agent receives a counterpart of this First
Amendment, executed by the Borrower, the Guarantors and the Majority Banks.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
repeats, on and as of the date hereof, each of the representations and
warranties made by it in Section 8 of the Credit Agreement, and such
representations and warranties remain true as of the date hereof (except to the
extent of changes resulting from transactions contemplated or permitted by the
Credit Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date), provided, that all references therein to the
Credit Agreement shall refer to such Credit Agreement as amended hereby. In
addition, the Borrower hereby represents and warrants that the execution and
delivery by the Borrower of this First Amendment and the performance by the
Borrower of all of its agreements and obligations under the Credit Agreement as
amended hereby are within the corporate authority of each the Borrower and has
been duly authorized by all necessary corporate action on the part of the
Borrower.
SECTION 5. RATIFICATION, ETC. Except as expressly amended hereby, the
Credit Agreement and all documents, instruments and agreements related thereto,
including, but not limited to the Security Documents, are hereby ratified and
confirmed in all respects and shall continue in full force and effect. The
Credit Agreement and this First Amendment shall be read and construed as a
single agreement. All references in the Credit Agreement or any related
agreement or instrument to the Credit Agreement shall hereafter refer to the
Credit Agreement as amended hereby.
SECTION 6. NO WAIVER. Nothing contained herein shall constitute a
waiver of, impair or otherwise affect any Obligations, any other obligation of
the Borrower or any rights of the Agent or the Banks consequent thereon.
SECTION 7. COUNTERPARTS. This First Amendment may be executed in one
or more counterparts, each of which shall be deemed an original but which
together shall constitute one and the same instrument.
SECTION 8. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO CONFLICT OF LAWS).
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as a document under seal as of the date first above written.
3
Page 3
FLEXTRONICS INTERNATIONAL LTD.
By:____________________________________
Title:
BANKBOSTON, N.A.
By:____________________________________
Title:
4
Page 4
RATIFICATION OF GUARANTY
Each of the undersigned guarantors hereby acknowledges and consents to
the foregoing First Amendment as of May __, 1997, and agrees that each of the
Guarantees dated as of March 27, 1997 from each of the undersigned Guarantors
remain in full force and effect, and each of the Guarantors confirms and
ratifies all of its obligations thereunder.
FLEXTRONICS INTERNATIONAL USA, INC.
By:_________________________________
Title:
FLEXTRONICS INTERNATIONAL (UK) LTD.
By:_________________________________
Title:
FLEXTRONICS MANUFACTURING (HK) LTD.
By:_________________________________
Title:
FLEXTRONICS SINGAPORE PTE. LTD.
By:_________________________________
Title:
FLEXTRONICS HOLDING (UK) LTD.
By:_________________________________
Title:
FLEXTRONICS MALAYSIA SDN BHD
5
Page 5
By:_________________________________
Title:
FLEXTRONICS INTERNATIONAL
MARKETING (L) LTD.
By:_________________________________
Title:
FLEXTRONICS HOLDINGS AB
By:_________________________________
Title:
FLEXTRONICS INTERNATIONAL
SWEDEN AB
By:_________________________________
Title:
ASTRON GROUP LIMITED
By:_________________________________
Title: