SECOND MODIFICATION AGREEMENT
BY THIS SECOND MODIFICATION AGREEMENT (the "Agreement"), made and
entered into as of the 4th day of November, 1998, BANK ONE, ARIZONA, NA, a
national banking association, as administrative agent for the Banks (as
hereinafter defined) (the "Administrative Agent"), and MICROCHIP TECHNOLOGY
INCORPORATED, a Delaware corporation (the "Borrower"), in consideration of the
mutual covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, hereby confirm and
agree as follows:
RECITALS:
A. Borrower, the Administrative Agent, The First National Bank of
Chicago, a national banking association, as Documentation Agent and the "Banks"
named therein entered into that Credit Agreement dated October 28, 1997 to
provide financial accommodations to the Borrower as provided therein, which
Credit Agreement (as modified, the "Credit Agreement") was previously modified
by that Modification Agreement, dated as of the 30th day of March, 1998.
B. Borrower and the Administrative Agent, with the consent of the
Banks, desire to modify the Credit Agreement as set forth herein.
C. All undefined capitalized terms used herein shall have the meaning
given them in the Credit Agreement.
AGREEMENT:
SECTION 1. ACCURACY OF RECITALS.
1.1 Borrower acknowledges the accuracy of the Recitals.
SECTION 2. MODIFICATIONS.
2.1 The Credit Agreement is hereby amended as hereinafter provided,
which amendments (the "Credit Agreement Amendments") are effective as of October
28, 1997:
2.1.1 Section 6.10 of the Credit Agreement is hereby amended
to read as follows:
Section 6.10 [Intentionally left blank.]
2.1.2 Section 6.11 of the Credit Agreement is hereby amended
to read as follows:
SECTION 6.11 DEBT/WORTH RATIO. At any time, permit
the ratio of Consolidated Debt to Consolidated Effective
Tangible Net Worth to be greater than 0.9 to 1.0.
2.1.3 Exhibit "F" to the Credit Agreement is amended to read
as attached hereto.
2.2 Each of the Loan Documents is modified to provide that it shall be
a default or an event of default thereunder if Borrower shall fail to comply
with any of the covenants of Borrower herein or if any representation or
warranty by Borrower herein is materially incomplete, incorrect, or misleading
as of the date hereof.
2.3 Each reference in the Loan Documents to any of the Loan Documents
is hereby amended to be a reference to such document as modified herein.
SECTION 3. RATIFICATION OF LOAN DOCUMENTS.
The Loan Documents are ratified and affirmed by Borrower and shall
remain in full force and effect as modified herein.
SECTION 4. BORROWER REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to the Banks:
4.1 No default or event of default under any of the Loan Documents as
modified herein, nor any event, that, with the giving of notice or the passage
of time or both, would be a default or an event of default under the Loan
Documents as modified herein has occurred and is continuing.
4.2 There has been no material adverse change taken as a whole, in the
financial condition of Borrower or any other person whose financial statement
has been delivered to the Administrative Agent in connection with the Loans from
the most recent financial statement received by the Administrative Agent.
4.3 Each and all representations and warranties of Borrower in the Loan
Documents are accurate in all material respects on the date hereof.
4.4 Borrower has no claims, counterclaims, defenses, or set-offs with
respect to the Loans or the Loan Documents as modified herein.
4.5 The Loan Documents as modified herein are the legal, valid, and
binding obligation of Borrower, enforceable against Borrower in accordance with
their terms.
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SECTION 5. BORROWER COVENANTS.
Borrower covenants with the Banks:
5.1 Borrower shall execute, deliver, and provide to the Administrative
Agent such additional agreements, documents, and instruments as reasonably
required by the Banks to effectuate the intent of this Agreement.
5.2 Borrower fully, finally, and absolutely and forever releases and
discharges the Banks and the Administrative Agent and their present and former
directors, shareholders, officers, employees, agents, representatives,
successors and assigns, and their separate and respective heirs, personal
representatives, successors and assigns, from any and all actions, causes of
action, claims, debts, damages, demands, liabilities, obligations, and suits, of
whatever kind or nature, in law or equity of Borrower, whether now known or
unknown to Borrower, and whether contingent or matured, (i) in respect of the
Loans, the Loan Documents, or the actions or omissions of the Banks and the
Administrative Agent in respect of the Loans or the Loan Documents and (ii)
arising from events occurring prior to the date of this Agreement.
SECTION 6. CONDITIONS PRECEDENT.
The agreements of the Banks and the Administrative Agent and the
modifications contained herein shall not be binding upon the Banks until the
Banks have executed and delivered consents to this Agreement and waivers to the
Covenant Defaults and the Administrative Agent has received, at Borrower's
expense, all of the following, all of which shall be in form and content
satisfactory to the Administrative Agent and shall be subject to approval by
Administrative Agent:
6.1 An original of this Agreement fully executed by the Borrower.
6.2 Such resolutions or authorizations and such other documents as the
Administrative Agent may require relating to the existence and good standing of
the Borrower, and the authority of any person executing this Agreement or other
documents on behalf of the Borrower.
6.3 Payment of all the internal and external costs and expenses
incurred by the Administrative Agent in connection with this Agreement
(including, without limitation, inside and outside attorneys, expenses, and
fees).
SECTION 7. INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR
WAIVER.
The Loan Documents as modified herein contain the complete
understanding and agreement of Borrower and the Banks in respect of the Loans
and supersede all prior representations, warranties, agreements, arrangements,
understandings, and negotiations. No provision of the Loan Documents as modified
herein may be changed, discharged, supplemented, terminated, or waived except in
a writing signed by the parties thereto.
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SECTION 8. BINDING EFFECT.
The Loan Documents as modified herein shall be binding upon and shall
inure to the benefit of Borrower and the Banks and their successors and assigns
and the executors, legal administrators, personal representatives, heirs,
devisees, and beneficiaries of Borrower, provided, however, Borrower may not
assign any of its right or delegate any of its obligation under the Loan
Documents and any purported assignment or delegation shall be void.
SECTION 9. CHOICE OF LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Arizona, without giving effect to conflicts of law
principles.
SECTION 10. COUNTERPART EXECUTION.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same document. Signature pages may be detached from the counterparts and
attached to a single copy of this Agreement to physically form one document.
DATED as of the date first above stated.
MICROCHIP TECHNOLOGY INCORPORATED,
a Delaware corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
BORROWER
BANK ONE, ARIZONA, NA, a national banking
association
By:______________________________________
Name:____________________________________
Title:___________________________________
ADMINISTRATIVE AGENT
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