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EXHIBIT 10-II(2)
SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
This Second Amendment to Revolving Credit Agreement ("Second Amendment") is
effective as of September 1, 1998 between MEMC ELECTRONIC MATERIALS, INC., a
Delaware corporation ("Borrower"), as the Borrower, and Xxxx XX, a company
formed under the laws of the Federal Republic of Germany ("Xxxx"), as the
Initial Lender and as Agent.
Recitals
WHEREAS, Borrower and Xxxx entered into a Revolving Credit Agreement dated
as of July 10, 1995 (as amended by the First Amendment dated March 3, 1998, the
"Credit Agreement") pursuant to which Xxxx agreed to extend up to US$75,000,000
of credit to Borrower on a revolving basis;
WHEREAS, Borrower, Xxxx and certain affiliates of Xxxx have agreed to
extend additional credit to Borrower and to restructure the existing financing
provided by Xxxx and its affiliates to Borrower; and
WHEREAS, as part of such restructuring, Borrower and Xxxx desire to change
the interest rate payable by Borrower to Xxxx under the Credit Agreement.
NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants and conditions hereinafter set forth, the parties agree as follows:
1. The definition of "Eurodollar Rate" in Section 1.01 of the Credit
Agreement is hereby deleted in its entirety.
2. The following definitions are hereby inserted in proper alphabetical
order into Section 1.01 of the Credit Agreement:
"Applicable Spread" means a percentage per annum equal to the excess
of (a) the Bloomberg fair market sector curves (adjusted for the chosen
interest rate method) applicable two business days prior to the Initial
Termination Date to a B3 rated industrial borrower for the period from the
Initial Termination Date through the latest possible Termination Date
(taking into account, if applicable, the latest Extension Termination Date)
over (b) the corresponding Swap Rate for such period.
"Extension Certificate" has the meaning specified in Section 2.15.
"Extension Request Notice" has the meaning set forth in Section 2.15.
"Extension Termination Date", if any, means the earlier of (a) either
(i) the first anniversary of the Initial Termination Date, or (ii) if there
has been an earlier applicable Extension Termination Date on or prior to
December 31, 1999, the first anniversary of such prior Extension
Termination Date, or (iii) if there has been an earlier applicable
Extension Termination Date after December 31, 1999 and on or before
December 31, 2000, the first anniversary of such prior Extension
Termination Date and (b) the termination in whole of the Commitments
pursuant to Section 2.04 or Section 6.01; provided, that in no event shall
an Extension Termination Date be after December 31, 2001.
"Initial Termination Date" for any Advance means September 30, 1998.
"Interest Coverage Ratio" means, with respect to the Borrower and its
Subsidiaries on a Consolidated basis for any period, a ratio of (a)
Consolidated EBIT of the Borrower and its subsidiaries for such period to
(b) interest payable on all Debt during such period.
"Interest Rate" means a rate per annum at all times equal to the sum
of (i) the British Bankers' Association (BBA) LIBOR rate (as shown on the
Reuters page FRBD or comparable pages) for such Interest Period for such
Advance, divided by a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period, plus (ii) the Applicable
Spread.
"Replacement Financing Arrangement" means a financing arrangement with
any Person who is not an Affiliate of the Borrower or the Agent or any
Lender on substantially the terms which would apply hereunder during the
period from the then applicable Termination Date to the latest possible
Extension Termination Date, provided that the interest rate of such
Replacement Financing Arrangement shall be no higher than the Interest Rate
and, if no lesser interest rate is available, shall be the Interest Rate.
"Swap Rate" means the US-Dollar denominated interbank interest rate
swap rates/LIBOR offered rates as shown on Reuters page ICAP and other
comparable brokerage pages, adjusted for the chosen interest rate method
(annual/semi-annual compounding, etc.).
3. The definition of "Debt" in Section 1.01 of the Credit Agreement shall
be amended by deleting in its entirety the proviso beginning in the seventh
line.
4. The definition of "Eligible Assignee" in Section 1.01 of the Credit
Agreement is hereby deleted in its entirety and the following is substituted in
lieu thereof:
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"Eligible Assignee" means any Person approved by all of the Lenders;
provided, however, that neither the Borrower nor any Subsidiary of the
Borrower shall qualify as an Eligible Assignee.
5. The definition of "Termination Date" set forth in Section 1.01 of the
Credit Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
"Termination Date" means the earlier of (a) either the Initial
Termination Date or, if applicable, the Extension Termination Date and (b)
the termination in whole of the Commitments pursuant to Section 2.04 or
Section 6.01.
6. Section 2.03 of the Credit Agreement shall be amended as follows: in the
fifth line, "1/8 of 1%" is hereby deleted and "1/4 of 1%" is substituted in lieu
thereof.
7. Section 2.07(a) of the Credit Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"(a) Interest on the Advances. The Borrower shall pay interest on the
unpaid principal amount of each Advance owing to each Lender from the date
of such Advance until such principal amount shall be paid in full at an
interest rate equal to (i) from September 1, 1998, until and including the
Initial Termination Date, 6.903% and (ii) as of the day after the Initial
Termination Date, the Interest Rate, payable in arrears on the last day of
such Interest Period and on the date such Advance shall be paid in full."
8. The following Section 2.15 is hereby added at the end of Article II of
the Credit Agreement:
"SECTION 2.15. Extension. If the then applicable Termination Date is a
date on or before December 31, 2000 and the Borrower may desire that the
Lenders extend the then applicable Termination Date to the Extension
Termination Date, then (a) the Borrower shall give written notice of said
fact (the "Extension Request Notice") to the Agent and the Lenders no later
than four (4) months before the Termination Date, (b) the Borrower shall
use its best efforts to obtain and enter into on or before the date which
is two months prior to the Termination Date a Replacement Financing
Arrangement and (c) if the Borrower shall not have entered into a
Replacement Financing Arrangement on or before the date which is two months
prior to the Termination Date, the Borrower shall deliver to the Agent and
the Lenders a certificate of the Borrower (the "Extension Certificate") (x)
certifying that the Borrower has not entered into a Replacement Financing
Arrangement, but the Borrower used its best efforts to do so as required by
clause (b) and setting forth such evidence and back-up detail as necessary
to demonstrate the efforts made, including a written letter from each bank
from which a Replacement Financing Arrangement as required by clause (b)
was requested, indicating that Borrower made such a request and that the
request was denied, and (y) requesting that the Termination Date be
extended to the Extension Termination Date. For purposes of this Section,
the Borrower shall be deemed to have complied with the requirement to use
its "best efforts" by requesting from and, if applicable, diligently
negotiating a Replacement Financing Arrangement as required by clause (b)
with each of three (3) commercial banks that are nationally recognized in
the United States and each have total assets in excess of $20,000,000,000.
The Agent shall have the right to designate, within ten (10) Business Days
after receipt of an Extension Request Notice, one of the three banks
referred to in the preceding sentence. For purposes of this Section,
diligent negotiation shall mean negotiation in good faith and without
denial or unreasonable delay of any reasonable request by any such bank for
information in connection with its consideration of providing a Replacement
Financing Arrangement to Borrower. For the avoidance of doubt, nothing
herein is intended to prevent Borrower from obtaining a Replacement
Financing Arrangement on terms equal to or better than those provided
hereunder.
Following receipt of the Extension Certificate, the Agent and/or the
Lenders shall have the right (without any obligation to do so) to obtain
for the Borrower a Replacement Financing Arrangement on terms equal to or
better than those provided hereunder.
If the Borrower has (a) delivered the Extension Request Notice within
the time period specified above, (b) used its best efforts to obtain and
enter into a Replacement Financing Arrangement and delivered the Extension
Certificate within the time period specified above and (c) not unreasonably
or in bad faith refused to enter into a Replacement Financing Arrangement
(with terms equal to or better than those provided hereunder) obtained for
the Borrower by the Agent or any of the Lenders pursuant to the preceding
paragraph, the Termination Date shall be extended to the Extension
Termination Date and the interest rate shall be the Interest Rate. The
Agent shall provide the Borrower with a written notice setting forth the
Interest Rate.
The Borrower shall be responsible for the payment of any customary
commitment fee and other fees in connection with obtaining a Replacement
Financing Arrangement.
For the avoidance of doubt, in no event shall an Extension Termination
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Date be requested by the Borrower after December 31, 2000 or be on a date
after December 31, 2001."
9. Section 5.02 of the Credit Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
"SECTION 5.02. Negative Covenants. On and after September 1, 1998 and
so long as any Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will not, unless the Lenders shall
otherwise consent in writing:
(a) Liens, etc. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any lien, security interest
or other charge or encumbrance, or any other type of preferential
arrangement, upon or with respect to any of its properties, whether
now owned or hereafter acquired, or assign, or permit any of its
Subsidiaries to assign, any right to receive income, in each case to
secure any Debt of any Person, other than:
(i) purchase money liens or purchase money security
interests upon or in any property acquired or held by the
Borrower or any Subsidiary in the ordinary course of business to
secure the purchase price of such property or to secure
indebtedness incurred solely for the purpose of financing the
acquisition of such property;
(ii) liens or security interests existing on such property
at the time of its acquisition (other than any such lien or
security interest created in contemplation of such acquisition);
(iii) liens for taxes, assessments and government charges or
levies to the extent not required to be paid under Section
5.01(b) hereof;
(iv) liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's liens and other
similar liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 30
days;
(v) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or
statutory obligations;
(vi) easements, rights of way and other encumbrances on
title to real property that do not render title to the property
encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes; and
(vii) liens incurred or deposits made in the ordinary course
of business to secure the performance of letters of credit, bids,
tenders, sales contracts, leases, surety, appeal and performance
bonds and other similar obligations not incurred in connection
with the borrowing of money;
provided, that the aggregate principal amount of the Debt, other
indebtedness, taxes, assessments, governmental charges or levies or
other obligations secured by the liens or security interests referred
to in clauses (i) through (vii) of this Section 5.02(a) shall not
exceed $45,000,000 in the aggregate at any time outstanding.
(b) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as allowed by generally accepted
accounting principles."
10. Unless otherwise provided herein, any term in initial capital letters
or all capital letters used as a defined term but not defined in this Second
Amendment shall have the meaning set forth in the Credit Agreement.
11. Except as modified herein, all terms and conditions of the Credit
Agreement shall remain in full force and effect.
12. This Second Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York.
13. This Second Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed an original and all of which taken together shall
constitute one and the same agreement. Delivery of any executed counterpart of a
signature page to this Second Amendment by telecopier shall be effective as
delivery of a manually executed counterpart of this Second Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be executed by their duly authorized representatives effective as of the day and
year first above written.
MEMC ELECTRONIC MATERIALS, INC., as Borrower
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By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Treasurer
XXXX XX, as Agent
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title:
By: /s/ Xxxxxx Xxxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxxx
Title:
XXXX XX, as the Initial Lender
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title:
By: /s/ Xxxxxx Xxxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxxx
Title:
