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Exhibit 10.61
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of December 18, 1998, is entered into by and among:
(1) LAM RESEARCH CORPORATION, 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") that execute this Amendment; and
(3) ABN AMRO BANK, N.V., San Francisco International Branch, as
agent for the Lenders (in such capacity, "Agent").
RECITALS
A. Borrower, the Lenders and Agent are parties to a Credit Agreement
dated as of April 13, 1998, as amended by that certain First Amendment to Credit
Agreement dated as of August 10, 1998 (as amended, the "Credit Agreement").
B. Borrower has requested the Lenders and Agent to amend the Credit
Agreement in certain respects.
C. The Lenders executing this Amendment 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 executing this Amendment 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:
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(a) Paragraph 1.01 is amended by adding thereto, in the
appropriate alphabetical order, definitions of the term "Cash Balances"
and "Second Amendment Effective Date" to read in their entirety as
follows:
"Cash Balances" shall mean, with respect to Borrower and
its Subsidiaries at any time, the remainder, determined on a
consolidated basis in accordance with GAAP, of:
(a) The unrestricted, unencumbered sum of (i) the
cash of Borrower and its Subsidiaries at such time and
(ii) the market value of cash equivalents (less than
ninety (90) days in term) and short-term marketable
securities (less than one (1) year in term) at such time;
minus
(b) The sum of (i) the aggregate principal amount
of all Loans outstanding at such time, (ii) the aggregate
amount available for drawing under all Letters of Credit
outstanding at such time and (iii) the aggregate amount of
all Reimbursement Obligations outstanding at such time.
"Second Amendment Effective Date" shall mean December 18,
1998.
(b) Subparagraph 5.02(l) is amended by changing clause (iv)
thereof to read in its entirety as follows:
(iv) Borrower shall not permit its Tangible Net Worth (A)
on December 27, 1998 to be less than $350,000,000 and (B) on any
date of determination (such date to be referred to herein as a
"determination date") which occurs after December 27, 1998 (such
date to be referred to herein as the "base date") to be less than
the sum on such determination date of the following:
(1) $350,000,000;
plus
(2) Seventy-five percent (75%) of the sum of
Borrower's consolidated quarterly net income
(ignoring any quarterly losses) for each quarter
ending after the base date through and including
the quarter ending immediately prior to the
determination date;
plus
(3) One hundred percent (100%) of the Net
Proceeds of all Equity Securities issued by
Borrower and its Subsidiaries during the period
commencing on the base date and ending on the
determination date;
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plus
(4) One hundred percent (100%) of the
aggregate decrease in the total liabilities of
Borrower and its Subsidiaries resulting from
conversions of convertible Subordinated
Indebtedness or other liabilities of Borrower and
its Subsidiaries into Equity Securities of Borrower
and its Subsidiaries during the period commencing
on the base date and ending on the determination
date.
(c) Subparagraph 5.02(l) is further amended by changing clause
(v) thereof to read in its entirety as follows:
(v) Borrower shall not incur a cumulative net loss
(exclusive of net income) greater than $35,000,000, determined in
accordance with GAAP, for the two quarter period commencing on
December 28, 1998 and ending on June 30, 1999.
(d) Subparagraph 5.02(l) is further amended by adding thereto a
new clause (vi) to read in its entirety as follows:
(vi) Borrower shall not permit the Cash Balances of
Borrower and its Subsidiaries to be less than $150,000,000 at any
time; provided, however, that if the net profits of Borrower and
its Subsidiaries, determined in accordance with GAAP, for each of
the fiscal quarter periods ending on September 26, 1999 and
December 26, 1999 is $1.00 or greater, commencing on the
fifteenth day following the date Borrower is first required to
deliver the Financial Statements for the fiscal quarter period
ending on December 26, 1999, Borrower shall no longer be required
to maintain such minimum Cash Balances.
(e) Schedule 1.01(a) is hereby amended to read in its entirety as
set forth on Attachment 1 hereto.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Agent and the Lenders 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 or Event of Default has occurred and is
continuing; and
(c) All of the Credit Documents are in full force and effect.
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(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 December 18, 1998 (the "Effective Date"), subject to receipt
by Agent and the Lenders of the following, each in form and substance
satisfactory to Agent, the Lenders executing this Amendment 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 (i) the 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 and (ii) resolutions have been duly
adopted by the Board of Directors of Borrower and are continuing in
effect, which authorize the execution, delivery and performance by
Borrower of this Amendment and the consummation of the transactions
contemplated hereby;
(c) A favorable written opinion of Steve Debenham, internal
counsel to Borrower, and Jackson Tufts Cole & Black, LLP, external
counsel to Borrower, each dated the Effective Date, addressed to Agent,
covering such legal matters as Agent may reasonably request and
otherwise in form and substance satisfactory to Agent;
(d) A nonrefundable amendment fee equal to one-tenth of one
percent (0.10%) of the Total Commitment to be shared among the Lenders
that execute this Amendment on or before December 18, 1998 pro rata in
accordance with such Lenders' respective Proportionate Share; and
(e) Such other evidence as Agent or any Lender executing this
Amendment 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.
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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.
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IN WITNESS WHEREOF, Borrower, Agent and the Lenders executing this
Amendment have caused this Amendment to be executed as of the day and year first
above written.
BORROWER: LAM RESEARCH CORPORATION
By:
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Name:
Title:
AGENT: ABN AMRO BANK, N.V., SAN FRANCISCO
INTERNATIONAL BRANCH, AS AGENT
By:
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Name:
Title:
By:
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Name:
Title:
LENDERS: ABN AMRO BANK, N.V., SAN FRANCISCO
INTERNATIONAL BRANCH, AS A LENDER
By:
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Name:
Title:
By:
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Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, AS A LENDER
By:
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Name:
Title:
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DEUTSCHE BANK AG NEW YORK AND/OR CAYMAN
ISLANDS BRANCHES, AS A LENDER
By:
----------------------------------------
Name:
Title:
By:
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Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, AS A LENDER
By:
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Name:
Title:
BANKBOSTON, N.A., AS A LENDER
By:
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Name:
Title:
UNION BANK OF CALIFORNIA, N.A., AS A LENDER
By:
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Name:
Title:
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ATTACHMENT 1
SCHEDULE 1.01(a)
PRICING GRID
LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5
------- ------- ------- ------- -------
APPLICABLE MARGINS:
Base Rate Loans 0.00% 0.00% 0.00% 0.00% 0.00%
LIBOR Loans 0.55% 0.75% .90% 1.00% 1.25%
COMMITMENT FEE PERCENTAGE:
0.225% 0.25% 0.30% 0.325% 0.40%
LC USAGE FEE PERCENTAGE:
Non-Financial Performance
Letters of Credit 0.275%* 0.25%* 0.45%* 0.50%* 0.625%*
Financial Performance Letters
of Credit 0.55%* 0.75%* 0.90%* 1.00%* 1.25%*
* Does not include LC Issuance Fees payable to Issuing Bank
EXPLANATION
1. The Applicable Margin for each Borrowing and Loan, the Commitment Fee
Percentage, and the LC Usage Fee Percentage will be determined as
provided below and will vary depending upon whether Level 1 pricing,
Level 2 pricing, Level 3 pricing, Level 4 pricing or Level 5 pricing is
applicable.
2. From the Closing Date until the First Amendment Effective Date, Level 1
pricing shall apply.
3. From the First Amendment Effective Date until the Second Amendment
Effective Date, Level 3 pricing shall apply.
4. On and after the Second Amendment Effective Date until the date that
either Paragraph 5 or Paragraph 6 below is applicable, Level 5 Pricing
will apply.
5. Commencing on the fifteenth day following the date Borrower is required
to deliver the quarterly Financial Statements and information under
Subparagraphs 5.01(a)(i) of the Credit Agreement for the fiscal quarter
period ending on December 26, 1999, the pricing
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will vary depending upon Borrower's profitability and Senior
Indebtedness Ratio (as applicable) as set forth in such Financial
Statements and information for the immediately preceding fiscal quarter
as follows:
(a) If Borrower does not have net profits of $1.00 or greater,
determined in accordance with GAAP, during both the fiscal
quarter period ending on September 26, 1999 and the fiscal
quarter period ending on December 26, 1999, Level 5 pricing will
still apply.
(b) If Borrower has net profits of $1.00 or greater, determined in
accordance with GAAP, during both the fiscal quarter period
ending on September 26, 1999 and the fiscal quarter period ending
on December 26, 1999 and Borrower's Senior Indebtedness Ratio is
less than 0.10, Level 2 pricing will apply.
(c) If Borrower has net profits of greater than $1.00, determined in
accordance with GAAP, during both the fiscal quarter ending on
September 26, 1999 and the fiscal quarter ending on December 26,
1999 and Borrower's Senior Indebtedness Ratio is greater than or
equal to 0.10 but less than 0.15, Level 4 pricing will apply.
(d) If Borrower has net profits of greater than $1, determined in
accordance with GAAP, during both the fiscal quarter ending on
September 26, 1999 and the fiscal quarter ending on December 26,
1999 and Borrower's Senior Indebtedness Ratio is greater than or
equal to 0.15, Level 5 pricing will apply.
6. On and after the fifteenth day following the Borrower's failure to
deliver to Agent the Financial Statements and information required under
Subparagraphs 5.01(a)(i) and (iii) of the Credit Agreement within the
time periods set forth therein commencing with the fifteenth day
following the date Borrower is required to deliver such Financial
Statements and information for the fiscal quarter ending on December 26,
1999, and until the fifteenth day following receipt by Agent of such
Financial Statements and information, Level 5 pricing will apply.
7. Examples:
(a) The Senior Indebtedness Ratio for the fiscal quarter ending March
26, 2000 is 0.09. Assuming Borrower had net profits of greater
than $1.00, determined in accordance with GAAP, during both the
fiscal quarter period ending on September 26, 1999 and the fiscal
quarter period ending on December 26, 1999 and the Financial
Statements and information are delivered within the time periods
required under the Credit Agreement, commencing May 30, 2000,
Level 2 pricing will apply.
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(b) The Senior Indebtedness Ratio for the fiscal quarter ending June
30, 2000 is 0.14. Assuming Borrower had net profits of greater
than $1.00, determined in accordance with GAAP, during both the
fiscal quarter period ending on September 26, 1999 and the fiscal
quarter period ending on December 26, 1999 and the Financial
Statements and information are delivered within the time periods
set forth in the Credit Agreement, commencing September 3, 2000,
Level 4 pricing will apply.
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