EXHIBIT 10.12
WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT
THIS WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
is entered into as of March 31, 1998 by and between CALIFORNIA MICRO DEVICES
CORPORATION ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("BANK").
RECITALS
WHEREAS, Borrower is currently indebted to Bank pursuant to the terms
and conditions of that certain Credit Agreement between Borrower and Bank dated
as of July 12, 1996, as amended from time to time ("Credit Agreement").
WHEREAS, as of the two two fiscal quarter periods ending September 30,
1997 and December 31, 1997, Borrower was in default of the requirement that
pre-tax profit not be less than $1.00 on a rolling two quarter basis, as set
forth in Section 4.9 (c) of the Credit Agreement (the "Existing Defaults").
WHEREAS, Borrower has requested that Bank waive the Existing Defaults,
and Bank is willing to waive the Existing Defaults on the condition that the
Credit Agreement be amended as follows:
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. In consideration of the amendment to the Credit agreement described
below, Bank hereby waives the Existing Defaults. Such waiver is limited to the
Existing Defaults, and implies no agreement on the part of Bank to waive any
subsequent defaults under the Credit Agreement.
2. Section 4.9 (c) of the Credit Agreement is hereby amended to read as
follows:
"(c) Net Income after taxes not less than $1.00 on an
annual basis, determined as of each fiscal year end, and pre-tax
profit not less than $1.00 on a rolling two fiscal quarter basis,
determined as of each fiscal quarter end; provided however, that
no default under this Section 4.9 (c) shall be deemed to have
occurred if, within 10 days after Borrower first knew, or, using
reasonable due diligence, should have known, of a violation of
this Section 4.9 (c), Borrower pledges and grants to Bank a first
priority security interest in cash, cash equivalents and/or
marketable securities acceptable to Bank, the aggregate market
value of which (when margined in accordance with Bank's then
standard margin rates) shall be and remain equal to or greater
than the outstanding principal balance of the Line of Credit
(inclusive of outstanding, but undrawn, Letters of Credit) until
Borrower returns to compliance with the terms of this Section 4.9
(c). Any such pledge and security interest shall be evidenced by
documentation acceptable to Bank."
3. Except as specifically provided herein, all terms and conditions of
the Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.
4. Borrower hereby makes all representations and warranties contained in
the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
CALIFORNIA MICRO DEVICES WELLS FARGO BANK, NATIONAL
CORPORATION ASSOCIATION
By: /s/ John E. Trewin By: /s/ Christian Kambour
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Title: Vice President & CFO Title: Vice President
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