EXHIBIT 4.4
Dated as of March 15, 1996
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017
Central Life Assurance Company
611 Fifth Avenue
Des Moines, Iowa 50309
Modern Woodmen of America
1701 First Avenue
Rock Island, Illinois 61201
Ladies and Gentlemen:
Reference is made to those certain Note Purchase Agreements between
Hutchinson Technology Incorporated, a Minnesota corporation (the "Company"), and
each of Teachers Insurance and Annuity Association of America, Central Life
Assurance Company and Modern Woodmen of America (collectively, the
"Purchasers"), each dated as of April 20, 1994 (collectively, the "Agreements"),
pursuant to which the Purchasers purchased the 7.46% Senior Notes of the Company
dated April 20, 1994 in the aggregate original principal amount of $30,000,000
(the "Notes"). The Purchasers or their successors or assigns (collectively, the
"Noteholders") are the registered holders of 100% of the aggregate outstanding
principal amount of the Notes as reflected in the Note Register required to be
maintained by the Company pursuant to Section 1O.1 of each of the Agreements,
and the Noteholders whose signatures are affixed below hold at least 66-2/3% of
the aggregate unpaid principal amount of the Notes outstanding as of the date
hereof.
The Company has informed the Noteholders that it proposes to enter into a
loan agreement with the Wisconsin Department of Development (the "Department"),
pursuant to which the Department will loan the Company $1,000,000 secured by
certain personal property, and a sale leaseback transaction, and has requested
that the Agreements be amended in certain respects to permit such transactions.
Now, therefore, the Company and the Noteholders (by their acceptance
hereof) hereby agree as follows:
1. AMENDMENT TO SECTION 6.3(a). Section 6.3(a) of each of the Agreements
is amended by restating clause (iv) thereof in its entirety as follows:
(iv) the Company may become and remain liable in respect of Funded
Debt relating to an equivalent principal amount of IDB Debt secured by
Liens permitted by subdivision (h) of SECTION 6.4 and in respect of Funded
Debt secured by Liens permitted by subdivision (i),(j) or (k) of SECTION
6.4, and any Subsidiary may become and remain liable in respect of
Subsidiary Secured Debt, if at the time of incurrence of any such Funded
Debt or Subsidiary Secured Debt and after giving effect to such incurrence
and to the concurrent retirement or incurrence of any other Debt by the
Company and its Subsidiaries and to the application of the proceeds of all
such incurred Debt, the aggregate principal amount outstanding of all Debt
of the Company and its Subsidiaries secured bv Liens permitted by
subdivision (g), (h), (i),(j) or (k) of SECTION 6.4 shall not exceed 19% of
Consolidated Net Worth, PROVIDED that, the Subsidiary Secured Debt
permitted by this subdivision (a)(iv) for which any one Subsidiary may
become and remain liable shall not at any one time exceed $500,000 in
aggregate principal amount outstanding; and
2. AMENDMENT TO SECTION 6.4.
(a) Section 6.4 of each of the Agreements is amended by (i) deleting
the word "and" at the end of clause (i) thereof, (ii) deleting the period at the
end of clause(j) thereof and adding ";and" at the end of said clause(j), and
(iii) adding a new clause (k) following clause (j) thereof, to read as follows:
(k) Liens on equipment of the Company securing Funded Debt in the
aggregate principal amount of $1,000,000 which was created pursuant to
that certain Major Economic Development Fund Agreement, dated as of March
21, 1996, between the Company and the Wisconsin Department of Development.
(b) Section 6.4 of each of the Agreements is further amended by
restating the penultimate and ultimate paragraphs thereof in their entirety as
follows:
It shall be a further condition to the creation, incurrence,
assumption, extension, renewal, refunding or refinancing of any Lien
otherwise permitted by subdivision (h), (i), (j) or (k) of this Section
that, on the date on which the Company or any of its Subsidiaries proposes
to take any such action and immediately after giving effect thereto, to the
substantially concurrent incurrence of any Debt and the substantially
concurrent retirement of any other Debt and to the application of the
proceeds of all such Debt, the Company or such Subsidiary, as the case may
be, shall be permitted to incur and remain liable in respect of at least
$1.00 of additional secured Funded Debt pursuant to subdivision (a)(iv) OF
SECTION 6.3. For all purposes of this Section, (A) Liens existing on or
with respect to any assets of any Person at the time it becomes a
Subsidiary shall be deemed to have been created at the time it becomes a
Subsidiary, (B) any extension, renewal, refunding or refinancing of any
Lien by
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the Company or any of its Subsidiaries shall be deemed to be an incurrence
of such Lien at the time of such extension, renewal, refunding or
refinancing, and (C) any Lien existing on any property at the time it is
acquired by the Company or any of its Subsidiaries shall be deemed to have
been created at the time of such acquisition.
In the event that any property or assets of the Company or any
Subsidiary shall become or be subject to a Lien not permitted by the
foregoing subdivisions (a) through (k) of this Section, the Company shall
make or cause to be made effective provision satisfactory to the holders of
the outstanding Notes whereby the Notes will be secured equally and ratably
with all other obligations secured by such Lien, and in any event, the
Notes shall have the benefit, to the full extent that (and with such
priority as) the holders thereof may be entitled under applicable law, of
an equitable Lien on such property or assets; PROVIDED, HOWEVER, that any
violation of this Section shall constitute a Default whether or not the
Company shall have made effective provision to secure the Notes equally and
ratably with any such other obligations or the holders of Notes shall be
entitled to such equal and ratable security or any such equitable Lien.
3. AMENDMENT TO SECTION 6.9. Section 6.9 of each of the Agreements is
amended by restating clause (d) thereof in its entirety as follows:
(d) the Company or any Subsidiary, in addition to making any sale,
lease, transfer, contribution or other disposition permitted by the
foregoing provisions of this Section, (i) may sell its interests, if any,
in and to the buildings and equipment constituting a part of the
Manufacturing Facility and the real estate appurtenant thereto as part of
the sale leaseback transaction described in clause (b) of Section 6.10
hereof and (ii) may sell any of its other assets for a consideration at
least equal to the fair market value thereof (as determined in good faith
by the Board of Directors) at the time of such sale but only if the assets
so sold, when taken together with all other assets of the Company and its
Subsidiaries (other than any buildings or equipment constituting a part of
the Manufacturing Facility and the real estate appurtenant thereto sold as
part of the sale leaseback transaction described in clause (b) of Section
6.10 hereof) then being or theretofore so sold (including deemed
dispositions pursuant to SECTION 6.8) during the period from and including
the first day of the then current fiscal year of the Company to and
including the date of such sale shall not have an aggregate fair market
value or an aggregate book value (such fair market value and such book
value to be determined in the case of any such assets as of the date of
sale or proposed sale thereof) which shall exceed 10% of Consolidated Net
Worth as at the end of the then most recently completed prior fiscal year
of the Company.
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4. AMENDMENT TO SECTION 6.10. Section 6.10 of each of the Agreements
is amended in its entirety to read as follows:
6.10 RESTRICTIONS ON LONG TERM LEASES AND SALE LEASEBACKS.
(a) The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly become or remain liable as lessee or as guarantor or
other surety with respect to any Long Term Lease unless, after giving
effect to such Long Term Lease, (i) the aggregate amount of all Long Term
Lease Rentals for which the Company and its Subsidiaries shall be liable in
any one fiscal year (including the then current and each future fiscal
year) under all Long Term Leases shall not exceed 10% of Consolidated Net
Worth as at the end of the then most recently completed fiscal quarter of
the Company, and (ii) the aggregate amount of Long Term Lease Rentals for
which all such Subsidiaries shall be liable in any one fiscal year
(including the then current and each future fiscal year) under all Long
Term Leases shall not exceed $200,000.
(b) The Company will not, and will not permit any of its Subsidiaries
to, sell or otherwise transfer to any other Person any property (real,
personal or mixed), whether now owned or hereafter acquired, with the
intention that, as part of the same or any related transaction, the Company
or any of its Subsidiaries shall lease as lessee all or any part of such
property or any other property which would be used for substantially the
same purpose, unless the cash proceeds received by the Company or a
Subsidiary in such sale or other transfer are at least equal to the fair
market value (as determined by the Board of Directors) of the property
sold or transferred and such proceeds are applied within 180 days of
receipt thereof either to the retirement of Debt of the Company and its
Subsidiaries or to the acquisition of assets useful in the conduct of the
business of the Company and its Subsidiaries; provided, however, that the
Company may sell to Meridean Eau Claire LLC for an aggregate price of
$15,300,000 the Company's interest in the buildings and equipment
constituting a part of the Manufacturing Facility and the real estate
appurtenant thereto and thereafter lease back from Meridean Eau Claire LLC
such buildings and equipment and real estate appurtenant to the
Manufacturing Facility.
5. AMENDMENT TO SECTION 9.1. Section 9.1 of each of the Agreements is
amended by adding thereto in the proper alphabetical order the following
additional defined term:
MANUFACTURING FACILITY: the manufacturing facility of the Company
located in Eau Claire, Wisconsin.
6. MISCELLANEOUS. Except as specifically amended hereby, all terms and
provisions of each of the Agreements shall remain in full force and effect.
This Letter Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
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Capitalized terms used but not otherwise defined in this Letter Amendment shall
have the meanings assigned to them bv each of the Agreements.
If you are in agreement with the foregoing, please so indicate by executing
the form of acknowledgment set forth below, whereupon this letter shall become a
binding, agreement effective as of the date hereof,
Very truly yours,
HUTCHINSON TECHNOLOGY
INCORPORATED
By /s/John A. Ingleman
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Its CFO
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Agreed to and accepted as of
the date first above written.
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/Marie A. Shmaruk
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Its Marie A. Shmaruk
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Associate Director-Private Placements
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CENTRAL LIFE ASSURANCE COMPANY
(now AMERICAN MUTUAL LIFE INSURANCE COMPANY)
By /s/Roger D. Fors
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Its Roger D. Fors
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Vice President
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MODERN WOODMEN OF AMERICA
By /s/Nick S. Coin
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Its Nick S. Coin
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Supervisor, Securities Division
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