To all: in the last 10Q filed with the SEC, MU modified their credit agreement. Major points are that they have added a new definition "Combined EBIT Income/Loss") and also changed (i.e. liberalized) the definition of what constitutes a maximum operation loss. From what I can tell, these changes prevent them from being in default of the loan.
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2. Amendments to Credit Agreement.
NEW: The following new definition shall be added to Article I of the Credit Agreement:
"Combined EBIT Income" or "Combined EBIT Losses" means, for any period, Combined Net Income or Combined Net Loss, as the case may be, for such period, plus the sum of (a) interest expense and (b) income tax expense, which were
deductible in determining Combined Net Income or Combined Net Loss for such period."
NEW: "7.17 Maximum Operating Losses. The Company shall not permit Combined EBIT Losses to exceed (a) 2% of Combined Tangible Net Worth in any fiscal quarter ending prior to the fiscal quarter ending February 26, 1998; 5% of Combined Tangible Net Worth for the fiscal quarter ending February 26, 1998; and 2% of Combined Tangible Net Worth for any fiscal quarter ending after February 26, 1998, or 5% of Combined Tangible Net Worth in any period of four consecutive fiscal quarters."
NEW: Item E. "Section 7.17: Maximum Combined Loss" to Schedule 2 of the Compliance Certificate shall be deleted in its entirety and the following new Item E. "Section 7.17: Maximum Operating Loss" to Schedule 2 of the Compliance Certificate shall be substituted therefor:
"E. SECTION 7.17: MAXIMUM OPERATING LOSS.
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1. Combined EBIT Loss for quarter ending on above date: $_______
2. Combined EBIT Loss for Subject Period: $_______
3. Line B.3 (Combined Tangible Net Worth) $_______
a. 2.0% of Line 3.E. for any fiscal quarter ending prior to
February 26,1998;
5.0% of Line 3.E. for the fiscal quarter ending February 26, 1998; and (My note: raised for this quarter only )
2.0% of Line 3.E. for any fiscal quarter ending after
February 26, 1998. $_______
b. 5% of Line E.3. $_______
Line E.1 not to exceed Line E.3.a.
Line E.2 not to exceed Line E.3.b."
3. Representations and Warranties. The Company hereby represents and warrants to the Agent and the Banks as follows:
(a) No Default or Event of Default has occurred and is continuing.
Ect.,ect.,ect...
4. Effective Date. This Amendment will become effective as of February 26, 1998 (Note date-two days before end of the quarter)
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Note: Old definition of Max Combined Net Loss:
Maximum Combined Net Loss. The Company shall not permit Combined Net Loss to exceed (a) 2% of Combined Tangible Net Worth in any fiscal quarter or (b) 5% of Combined Tangible Net Worth in any period of four consecutive fiscal quarters. |
