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EXHIBIT 10.49
EXECUTION VERSION
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of May 14, 1999, is entered into by and among:
(1) SILICON VALLEY GROUP, INC., a Delaware corporation
("Borrower");
(2) Each of the financial institutions listed in Schedule I to
the Credit Agreement referred to in Recital A below (collectively, the
"Lenders"); and
(3) ABN AMRO BANK N.V., acting through its San Francisco
Representative Office, as agent for Lenders (in such capacity, "Agent").
RECITALS
A. Borrower, the Lenders and Agent are parties to a Credit Agreement
dated as of June 30, 1998, as amended by a First Amendment to Credit Agreement
dated as of October 23, 1998 (as so amended, the "Credit Agreement").
B. Borrower has requested the Lenders and Agent to amend the Credit
Agreement in certain respects.
C. The Lenders and Agent are willing so to amend the Credit Agreement
upon the terms and subject to the conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower, the Lenders and Agent hereby agree as follows:
1. DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the Credit Agreement, as amended by
this Amendment. The rules of construction set forth in Section I of the Credit
Agreement shall, to the extent not inconsistent with the terms of this
Amendment, apply to this Amendment and are hereby incorporated by reference.
2. AMENDMENTS TO CREDIT AGREEMENT. Subject to the satisfaction of the
conditions set forth in Paragraph 4 below, the Credit Agreement is hereby
amended as follows:
(a) Paragraph 1.01 is amended as follows:
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(i) The definition of "Adjusted Net Income" set forth
therein is amended to read in its entirety as follows:
"Adjusted Net Income" shall mean, with respect to
Borrower for any period, the sum, determined on a
consolidated basis in accordance with GAAP where
applicable, of:
(a) The net income or net loss of
Borrower and its Subsidiaries for such period
after provision for income taxes;
plus
(b) To the extent deducted in
calculating such net income or net loss for such
period under clause (a) above, all
non-recurring, non-cash charges taken by
Borrower and its Subsidiaries during such period
in connection with acquisitions permitted by
Subparagraph 5.02(d) (including charges for the
write-off of in-process research and development
costs relating to such acquisitions); provided,
however, that the sum of all such charges so
added to net income or net loss in calculating
the Adjusted Net Income of Borrower during the
period from the date of this Agreement through
the Maturity Date shall not at any time exceed
the Acquisition Charge Cap at such time;
plus
(c) To the extent deducted in
calculating such net income or net loss for such
period under clause (a) above, all
Xxxxxxx-Xxxxxxx Charges taken by Borrower and
its Subsidiaries during such period; provided,
however, that the sum of all such charges so
added to net income or net loss in calculating
the Adjusted Net Income of Borrower during the
period from the date of this Agreement through
the Maturity Date shall not at any time exceed
Fifteen Million Dollars ($15,000,000).
(ii) The definition of "EBITDA" set forth therein is
amended to read in its entirety as follows:
"EBITDA" shall mean, with respect to Borrower for
any period, the sum, determined on a consolidated basis in
accordance with GAAP, of the following:
(a) The net income or net loss of
Borrower for such period before provision for
income taxes;
plus
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(b) To the extent deducted in calculating
such net income or net loss for such period under
clause (a) above, the sum of (i) all Interest
Expenses of Borrower and its Subsidiaries
accruing during such period and (ii) all
depreciation and amortization expenses of Borrower
and its Subsidiaries accruing during such period;
minus
(c) To the extent added in calculating such
net income or net loss for such period under clause
(a) above, all interest income of Borrower and its
Subsidiaries accruing during such period;
plus
(d) To the extent deducted in calculating
such net income or net loss for such period under
clause (a) above, all non-recurring, non-cash
charges taken by Borrower and its Subsidiaries
during such period in connection with acquisitions
permitted by Subparagraph 5.02(d) (including
charges for the write-off of in-process research
and development costs relating to such
acquisitions); provided, however, that the sum of
all such charges so added to net income or net loss
in calculating the EBITDA of Borrower during the
period from the date of this Agreement through the
Maturity Date shall not at any time exceed the
Acquisition Charge Cap at such time;
plus
(e) For the purposes of calculating the
Fixed Charge Coverage Ratio of Borrower for any
period only, to the extent deducted in calculating
such net income or net loss for such period under
clause (a) above, all Xxxxxxx-Xxxxxxx Charges taken
by Borrower and its Subsidiaries during such
period; provided, however, that the sum of all such
charges so added to net income or net loss in
calculating the EBITDA of Borrower during the
period from the date of this Agreement through the
Maturity Date shall not at any time exceed Fifteen
Million Dollars ($15,000,000).
(iii) The definition of "Fixed Charge Coverage Ratio" set
forth therein is amended by changing the proviso at the end
thereof to read in its entirety as follows:
Provided, however, that, in calculating Borrower's Fixed
Charge Coverage Ratio for the consecutive two-quarter
period ending on October 1, 1999
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and the consecutive three-quarter period ending on December 31,
1999, the amounts to be used in clauses (a)(i), (a)(ii), (b)(i)
and (b)(ii) shall be the actual respective amounts for such
periods annualized.
(iv) A new definition of "Senior Debt/EBITDA", to read in
its entirety as follows, is added thereto in the appropriate
alphabetical order:
"Senior Debt/EBITDA Ratio" shall mean, with respect
to Borrower for any period, the ratio, determined on a
consolidated basis in accordance with GAAP, of:
(a) Borrower's Senior Indebtedness on
the last day of such period;
to
(b) Borrower's EBITDA for such period.
(v) The definition of "Tangible Net Worth" set forth
therein is amended to read in its entirety as follows:
"Tangible Net Worth" shall mean, with respect to
Borrower at any time, the remainder at such time,
determined on a consolidated basis in accordance with
GAAP, of:
(a) The sum of (i)the total assets of
Borrower and its Subsidiaries at such time plus
(ii) the after tax effect of the lesser of (A)
the sum of all Xxxxxxx-Xxxxxxx Charges taken by
Borrower and its Subsidiaries prior to such time
and (B) Fifteen Million Dollars ($15,000,000);
minus
(b) The sum (without limitation and
without duplication of deductions) of (i) the
total liabilities of Borrower and its
Subsidiaries, (ii) all reserves established by
Borrower and its Subsidiaries for anticipated
losses and expenses (to the extent not deducted
in calculating total assets in clause (a)
above), and (iii) all intangible assets of
Borrower and its Subsidiaries (to the extent
included in calculating total assets in clause
(a) above), including, without limitation,
goodwill (including any amounts, however
designated on the balance sheet, representing
the cost of acquisition of businesses and
investments in excess of underlying tangible
assets), trademarks, trademark rights, trade
name rights, copyrights, patents, patent rights,
licenses, unamortized debt
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discount, marketing expenses, organizational
expenses, non-compete agreements and deferred
research and development.
(vi) New definitions of "Xxxxxxx-Xxxxxxx Acquisition"
and "Xxxxxxx-Xxxxxxx Charges", to read in their entirety as
follows, are added thereto in the appropriate alphabetical
order:
"Xxxxxxx-Xxxxxxx Acquisition" shall mean the
acquisition of certain assets and liabilities of the
Xxxxxxx-Xxxxxxx Semiconductor Equipment Group, a division
of Xxxxxxx-Xxxxxxx Company.
"Xxxxxxx-Xxxxxxx Charges" shall mean, with respect
to any period, all non-recurring charges taken by Borrower
and its Subsidiaries during such period in connection with
the Xxxxxxx-Xxxxxxx Acquisition (including charges for the
write-off of in-process research and development costs,
consolidation, relocation and other charges relating to
such acquisition).
(b) Subparagraph 5.02(b) is amended by changing the reference to
"clause (xi) of Subparagraph 5.02(a)" set forth in clause (xiv) thereof
to "clause (xii) of Subparagraph 5.02(a)".
(c) Subparagraph 5.03(b) is hereby amended to read in its
entirety as follows:
(b) Fixed Charge Coverage Ratio. Borrower shall not permit
its Fixed Charge Coverage Ratio for any period set forth below to
be less than the ratio set forth opposite such period below:
The consecutive two -quarter
period beginning on April
3, 1999 and ending on
October 1, 1999 2.00;
The consecutive three-quarter
period beginning on April
3, 1999 and ending on
December 31, 1999 2.50;
The consecutive four-quarter
period beginning on April
3, 1999 and ending on
March 31, 2000 3.00;
Each consecutive four-quarter
period ending on the
last day of each quarter
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thereafter 3.50.
(d) Subparagraph 5.03(d) is hereby amended to read in its
entirety as follows:
(d) Tangible Net Worth. Borrower shall not permit its
Tangible Net Worth on the last day of any fiscal quarter (such
date to be referred to in this Subparagraph 5.03(d) as a
"determination date") which occurs on or after March 31, 1999
(such date to be referred to in this Subparagraph 5.03(d) as the
"base date") to be less than the sum on such determination date
of the following:
(i) Five Hundred Thirteen Million Three Hundred
Thousand Dollars ($513,300,000);
plus
(ii) Eighty percent (80%) of the sum of:
(A) The sum of Borrower's consolidated
quarterly net income (ignoring any quarterly
losses) for each fiscal quarter after the base
date through and including the fiscal quarter
ending on the determination date; and
(B) The after tax effect of the lesser
of (A) the sum of all Xxxxxxx-Xxxxxxx Charges
taken by Borrower and its Subsidiaries for each
fiscal quarter after the base date through and
including the fiscal quarter ending on the
determination date, and (B) Fifteen Million
Dollars ($15,000,000);
plus
(iii) Seventy-five percent (75%) of the Net
Proceeds of all Equity Securities issued by Borrower and
its Subsidiaries (to Persons other than Borrower or its
Subsidiaries) during the period commencing on the base
date and ending on the determination date;
plus
(iv) Seventy-five percent (75%) of the principal
amount of all debt securities of Borrower and its
Subsidiaries converted into Equity Securities of
Borrower and its Subsidiaries during the period
commencing on the base date and ending on the
determination date.
minus
(v) The lesser of (A) the aggregate amount paid
by Borrower (including reasonable expenses incurred in
connection therewith) to repurchase up to one million
shares of its common stock during the period
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commencing on the base date and ending on the
determination date and (B) $10,000,000.
(e) Subparagraph 5.03(e) is hereby amended to read in its
entirety as follows:
(e) Profitability.
(i) For the quarter ending April 2, 1999, Borrower
shall not permit its Adjusted Net Income to be a loss
exceeding $19,000,000.
(ii) During the period October 3, 1998 - April 2,
1999, Borrower shall not permit the sum of its quarterly
losses based upon its Adjusted Net Income for each quarter
(excluding any quarterly profits) to exceed $26,000,000.
(iii) Borrower shall not permit its Adjusted Net
Income for the consecutive three-quarter period beginning
on April 3, 1999 and ending on December 31, 1999 to be a
loss.
(iv) Thereafter, Borrower shall not permit (A) its
Adjusted Net Income for any quarter to be a loss exceeding
$10,000,000, (B) its Adjusted Net Income to be a loss in
more than two quarters in any consecutive four-quarter
period (commencing with the consecutive four-quarter
period ending on March 31, 2000) or (C) its Adjusted Net
Income for any consecutive four-quarter period (commencing
with the consecutive four-quarter period ending on March
31, 2000) to be a loss.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Agent and the Lenders that the following are true and correct on the
date of this Amendment and that, after giving effect to the amendments set forth
in Paragraph 2 above, the following will be true and correct on the Effective
Date (as defined below):
(a) The representations and warranties of Borrower and its
Subsidiaries set forth in Paragraph 4.01 of the Credit Agreement and in
the other Credit Documents are true and correct in all material
respects;
(b) No Default has occurred and is continuing; and
(c) Each of the Credit Documents is in full force and effect.
(Without limiting the scope of the term "Credit Documents," Borrower expressly
acknowledges in making the representations and warranties set forth in this
Paragraph 3 that, on and after the date hereof, such term includes this
Amendment.)
4. EFFECTIVE DATE. The amendments effected by Paragraph 2 above shall
become effective on May 14, 1999 (the "Effective Date"), subject to receipt by
Agent and the Lenders on
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or prior to the Effective Date of the following, each in form and substance
satisfactory to Agent, the Lenders and their respective counsel:
(a) This Amendment duly executed by Borrower, the Required
Lenders and Agent;
(b) A Certificate of the Secretary of Borrower, dated the
Effective Date, certifying that the Restated Certificate of
Incorporation and Bylaws of Borrower, in the form delivered to Agent on
the Closing Date, are in full force and effect and have not been
amended, supplemented, revoked or repealed since such date;
(c) A nonrefundable amendment fee equal to 0.150% of each
Lender's Commitment, to be paid to each Lender that executes this
Amendment on or before May 14, 1999; and
(d) Such other evidence as Agent or any Lender may reasonably
request to establish the accuracy and completeness of the
representations and warranties and the compliance with the terms and
conditions contained in this Amendment and the other Credit Documents.
5. EFFECT OF THIS AMENDMENT. On and after the Effective Date, each
reference in the Credit Agreement and the other Credit Documents to the Credit
Agreement shall mean the Credit Agreement as amended hereby. Except as
specifically amended above, (a) the Credit Agreement and the other Credit
Documents shall remain in full force and effect and are hereby ratified and
confirmed and (b) the execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power, or remedy of the Lenders or Agent, nor constitute a waiver of any
provision of the Credit Agreement or any other Credit Document.
6. MISCELLANEOUS.
(a) Counterparts. This Amendment may be executed in any number
of identical counterparts, any set of which signed by all the parties
hereto shall be deemed to constitute a complete, executed original for
all purposes.
(b) Headings. Headings in this Amendment are for convenience of
reference only and are not part of the substance hereof.
(c) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California without
reference to conflicts of law rules.
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IN WITNESS WHEREOF, Borrower, Agent and the Lenders have caused this
Amendment to be executed as of the day and year first above written.
BORROWER: SILICON VALLEY GROUP, INC.
By:
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Name:
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Title:
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AGENT: ABN AMRO BANK, N.V.
By:
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Name:
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Title:
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By:
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Name:
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Title:
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LENDERS: ABN AMRO BANK, N.V.
By:
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Name:
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Title:
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By:
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Name:
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Title:
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COMERICA BANK-CALIFORNIA
By:
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Name:
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Title:
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FLEET NATIONAL BANK
By:
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Name:
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Title:
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KEYBANK NATIONAL ASSOCIATION
By:
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Name:
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Title:
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XXXXX FARGO BANK, N.A.
By:
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Name:
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Title:
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