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EXHIBIT 10.38.5
FIFTH AMENDMENT
TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
Fifth Amendment dated as of January 14, 2000 to Revolving Credit and
Term Loan Agreement (the "Fifth Amendment"), by and among WESTERN DIGITAL
CORPORATION, a Delaware corporation (the "Borrower") and BANKBOSTON, N.A. and
the other lending institutions listed on Schedule 1 to the Credit Agreement (as
hereinafter defined) (the "Banks"), amending certain provisions of the Revolving
Credit and Term Loan Agreement dated as of November 4, 1998 (as amended and in
effect from time to time, the "Credit Agreement") by and among the Borrower, the
Banks, BankBoston, N.A. as agent for the Banks (in such capacity, the "Agent")
and The CIT Group/Business Credit, Inc. as co-agent for the Banks. Terms not
otherwise defined herein which are defined in the Credit Agreement shall have
the same respective meanings herein as therein.
WHEREAS, the Borrower and the Banks have agreed to modify certain terms
and conditions of the Credit Agreement as specifically set forth in this Fifth
Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. LIMITATION ON NEW REVOLVING CREDIT LOANS AND LETTERS OF
CREDIT.
(a) Notwithstanding anything to the contrary contained in the Credit
Agreement and the other Loan Documents, the Borrower hereby agrees that from the
Effective Date (as defined in Section 8 hereof) through and including the
Revolving Credit Loan Maturity Date (the "Limitation Period"), it will not
request to borrow any Revolving Credit Loans, request any Letters of Credit be
issued, extended or renewed or borrow any Revolving Credit Loans or request the
issuance, renewal or extension of any Letters of Credit (with the parties hereto
hereby agreeing that the only Letters of Credit to be outstanding during the
Limitation Period shall be the Letters of Credit which have been issued prior to
the date hereof). The parties hereto hereby acknowledge and agree that during
the Limitation Period the Banks and the Agent shall have no obligation to make
Revolving Credit Loans or issue, extend or renew Letters of Credit.
(b) The parties hereto hereby acknowledge and agree that after the
termination of the Limitation Period, the Banks shall have no obligation to make
Revolving Credit Loans and the Agent shall have no obligation to issue, extend
or renew Letters of Credit.
SECTION 2. AMENDMENT TO SECTION 1 OF THE CREDIT AGREEMENT. Section 1.1
of the Credit Agreement is hereby amended as follows:
(a) the definition of "Revolving Credit Loan Maturity Date" is hereby
amended by deleting the date "November 2, 2001" which appears in such definition
and substituting in place thereof the date "March 31, 2000";
(b) the definition of "Term Loan Maturity Date" is hereby amended by
deleting the date "November 2, 2001" which appears in such definition and
substituting in place thereof the
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words "The earlier to occur of (a) January 31, 2000 and (b) the date on which
the Borrower incurs the Vendor Indebtedness";
(c) Section 1.1 of the Credit Agreement is further amended by inserting
the following definitions in the appropriate alphabetical order:
Vendor. That certain vendor of the Borrower which has been
previously identified as the "Vendor" to the Banks and the Agent by the
Borrower.
Vendor Indebtedness. Indebtedness of the Borrower to the Vendor
incurred pursuant to the Vendor Loan Agreement in the original principal
amount of not less than $16,625,000 in the aggregate.
Vendor Loan Agreement. That certain Loan Agreement dated or to be
dated on or after January 13, 2000 between the Vendor and the Borrower
and in form and substance satisfactory to the Agent.
Vixel. Vixel Corporation, a Delaware corporation.
SECTION 3. AMENDMENT TO SECTION 2.3 OF THE CREDIT AGREEMENT. Section 2.3
of the Credit Agreement is hereby amended by deleting Section 2.3 in its
entirety and restating it as follows:
2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall
have the right at any time and from time to time upon five (5)
Business Days prior written notice to the Agent to reduce by
$5,000,000 or a whole multiple of $500,000 in excess thereof or
terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced pro rata in accordance
with their respective Commitment Percentages of the amount
specified in such notice or, as the case may be, terminated,
provided, however, notwithstanding the foregoing, from January 1,
2000 through and including the Revolving Credit Loan Maturity
Date, the Borrower shall only have the right to terminate the
Total Commitment in its entirety and shall not have the right to
reduce the Total Commitment by any smaller amount. Promptly after
receiving any notice of the Borrower delivered pursuant to this
Section 2.3, the Agent will notify the Banks of the substance
thereof. Upon the effective date of any such reduction or
termination, the Borrower shall pay to the Agent for the
respective accounts of the Banks the full amount of any
commitment fee then accrued on the amount of such reduction. No
reduction or termination of the Commitments may be reinstated.
SECTION 4. AMENDMENT TO SECTION 4 OF THE CREDIT AGREEMENT. Section 4.4.
of the Credit Agreement is hereby amended by deleting Section 4.4 in its
entirety and restating it as follows:
4.4. OPTIONAL REPAYMENT OF TERM LOAN. The Borrower shall have the
right at any time to prepay the Term Notes on or before the Term Loan
Maturity Date, as a whole, or in part, upon not less than five (5)
Business Days prior written notice to the Agent, without premium or
penalty (but subject to Section 6.9 hereof), provided, that (a) each
partial prepayment shall be in the principal amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, and (b) each partial
prepayment shall be allocated among the Banks, in proportion, as nearly
as practicable, to the respective outstanding amount of each
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Bank's Term Note, with adjustments to the extent practicable to equalize
any prior prepayments not exactly in proportion. Any prepayment of
principal on the Term Loan shall include all interest accrued to the
date of prepayment and shall be applied against the scheduled
installments of principal due on the Term Loan in the inverse order of
maturity. No amount repaid with respect to the Term Loan may be
reborrowed.
SECTION 5. AMENDMENT TO SECTION 10 OF THE CREDIT AGREEMENT. Section 10
of the Credit Agreement is hereby amended as follows:
(a) Section 10.1(i) of the Credit Agreement is hereby amended by
deleting the text of Section 10.1(f) in its entirety and restating it as
follows:
(i) the (i) Indebtedness evidenced by the Subordinated Debt
Documents; and (ii) Vendor Indebtedness, provided, that as to the Vendor
Indebtedness, (1) the net proceeds received by the Borrower from such
Vendor Indebtedness is in the original principal amount of not less than
the aggregate amount of the Term Loans outstanding on such date,
together with any and all interest accrued thereon; and (2) the Borrower
will use the proceeds received from the Vendor Indebtedness to prepay in
full the outstanding amount of the Term Loans, together with any and all
interest accured thereon.
(b) Section 10.2(xii) of the Credit Agreement is hereby amended by
deleting the text of Section 10.2(xii) in its entirety and restating it as
follows:
(xii) the (i) liens in favor of the Indenture Trustee to the
extent expressly provided in Section 7.07 of the Subordinated Indenture;
and (ii) lien solely on the Vixel Stock in favor of the Vendor to secure
the Vendor Indebtedness permitted by Section 10.1(i)(ii), provided, that
as to lien on the Vixel Stock to secure the Vendor Indebtedness, (1)
such lien shall only be permitted to be granted after the aggregate
amount of the Term Loans of all the Banks have been repaid in full in
cash; and (2) such security interest covers only the Vixel Stock and no
other asset of the Borrower or any Subsidiary.
(c) Section 10.5.2(a)(i) of the Credit Agreement is hereby amended by
deleting the words "enter into a sale and leaseback arrangement in respect of
the real property located in Rochester, Minnesota in an arms-length transaction
for fair and reasonable value" and substituting in place thereof the words
"enter into a sale of the real property (together with the fixtures located
thereon) located in Rochester, Minnesota in an arms-length transaction for fair
and reasonable value so long as immediately prior to the consummation of such
sale (1) the aggregate outstanding amount of the Term Loans, including all
accrued interest thereon, has been repaid in full in cash and (2) the Borrower
has provided to the Agent cash collateral in an amount sufficient to cash
collateralize the Maximum Drawing Amount (together with any Reimbursement
Obligations and any Unpaid Reimbursement Obligations) of all issued and
outstanding Letters of Credit, and the Borrower has executed and delivered to
the Agent a cash collateral agreement in respect of such cash collateral in form
and substance satisfactory to the Agent with appropriate instructions
prohibiting the Borrower's withdrawal of such funds so long as they remain cash
collateral".
SECTION 6. AMENDMENT TO SECTION 11 OF THE CREDIT AGREEMENT. Section 11.1
of the Credit Agreement is hereby amended by deleting the table contained in
Section 11.1 of the Credit Agreement in its entirety and restating it as
follows:
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PERIOD AMOUNT
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Closing Date - last day of Second Fiscal $416,000,000
Quarter, 1999
First Day of Third Fiscal Quarter, 1999 - $423,000,000 last day of Third
Fiscal Quarter, 1999
First Day of Fourth Fiscal Quarter, 1999 - $410,000,000 last day of
Fourth Fiscal Quarter, 1999
First Day of First Fiscal Quarter, 2000 - $238,000,000 last day of First
Fiscal Quarter, 2000
First Day of Second Fiscal Quarter, 2000 - $176,000,000 last day of
Second Fiscal Quarter, 2000
At any time thereafter $155,000,000
SECTION 7. LIMITED WAIVER. The Borrower has requested that the Banks
waive compliance with Section 11.1 of the Credit Agreement for the fiscal
quarter ended October 2, 1999. Subject always to compliance by the Borrower with
the terms and provisions of the Credit Agreement and the other Loan Documents
and the terms and conditions contained herein, from and after the effectiveness
of this Fifth Amendment the Banks hereby waive the provisions of Section 11.1 of
the Credit Agreement for the fiscal quarter ended October 2, 1999 and solely
with respect to the determination of compliance for such fiscal quarter ended
October 2, 1999.
SECTION 8. CONDITIONS TO EFFECTIVENESS. This Fifth Amendment shall not
become effective until the date (the "Effective Date") on which Agent receives
the following:
(a) a counterpart of this Fifth Amendment, executed by the Borrower, the
Guarantors and the Banks; and
(c) payment by the Borrower to the Agent for the pro rata accounts of
the Banks an amendment fee of $200,000.
SECTION 9. REPRESENTATIONS AND WARRANTIES. The Borrower hereby repeats,
on and as of the date hereof, each of the representations and warranties made by
it in Section 8 of the Credit Agreement, and such representations and warranties
remain true as of the date hereof (except to the extent of changes resulting
from transactions contemplated or permitted by the Credit Agreement and the
other Loan Documents and changes occurring in the ordinary course of business
that singly or in the aggregate are not materially adverse, and to the extent
that such representations and warranties relate expressly to an earlier date),
provided, that all references therein to the Credit Agreement shall refer to
such Credit Agreement as amended hereby. In addition, the Borrower hereby
represents and warrants that the execution and delivery by the Borrower and its
Subsidiaries of this Fifth Amendment and the performance by the Borrower and its
Subsidiaries of all of its agreements and obligations under the Credit Agreement
as amended hereby and the other Loan Documents are within the corporate
authority of each the Borrower and its Subsidiaries and has been duly authorized
by all necessary corporate action on the part of the Borrower and its
Subsidiaries.
SECTION 10. RATIFICATION, ETC. Except as expressly amended hereby, the
Credit Agreement, the Security Documents and all documents, instruments and
agreements related thereto are hereby ratified and confirmed in all respects and
shall continue in full force and effect. The Credit Agreement and this Fifth
Amendment shall be read and construed as a single agreement. All references in
the Credit Agreement or any related agreement or instrument to the Credit
Agreement shall hereafter refer to the Credit Agreement as amended hereby.
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SECTION 11. NO WAIVER. Except as expressly set forth in Section 7
hereof, nothing contained herein shall constitute a waiver of, impair or
otherwise affect any Obligations, any other obligation of the Borrower or any
rights of the Bank Agents or the Banks consequent thereon.
SECTION 12. COUNTERPARTS. This Fifth Amendment may be executed in one or
more counterparts, each of which shall be deemed an original but which together
shall constitute one and the same instrument.
SECTION 13. GOVERNING LAW. THIS FIFTH AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).
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IN WITNESS WHEREOF, the parties hereto have executed this Fifth
Amendment as a document under seal as of the date first above written.
WESTERN DIGITAL CORPORATION
By:
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Title:
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BANKBOSTON, N.A.
By:
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Title:
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THE CIT GROUP/BUSINESS CREDIT, INC.
By:
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Title:
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HELLER FINANCIAL, INC.
By:
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Title:
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FLEET CAPITAL CORPORATION
By:
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Title:
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FINOVA CAPITAL CORPORATION
By:
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Title:
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LASALLE BUSINESS CREDIT, INC.
By:
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Title:
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FINOVA CAPITAL CORPORATION,
SUCCESSOR BY MERGER TO:
FREMONT FINANCIAL CORPORATION
By:
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Title:
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FLEET BUSINESS CREDIT CORPORATION
(F/K/A SANWA BUSINESS CREDIT CORP.)
By:
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Title:
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RATIFICATION OF GUARANTY
The undersigned guarantors hereby acknowledges and consents to the
foregoing Fifth Amendment as of January 14, 2000, and agrees that the Guarantee
dated as of November 4, 1998 from WD UK, the Guaranty dated as of February 12,
1999 from Connex, Inc. and the Guaranty dated as of September 22, 1999 from
SageTree, Inc. in favor of the Agent and each of the Banks remains in full force
and effect, and each Guarantor confirms and ratifies all of its obligations
thereunder.
CONNEX, INC.
By:
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Title:
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WESTERN DIGITAL (U.K.) LIMITED
By:
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Title:
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SAGETREE, INC.
By:
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Title:
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