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EXHIBIT 10.47.3
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT ("Amendment") is entered into
as of April 7, 2001, by and among WESTERN DIGITAL TECHNOLOGIES, INC., a Delaware
corporation formerly known as Western Digital Corporation ("Borrower"), the
other Credit Parties party hereto, the lenders signatory hereto (each
individually a "Lender" and collectively the "Lenders"), GENERAL ELECTRIC
CAPITAL CORPORATION, as administrative agent for Lenders (in such capacity,
"Agent"), and BANK OF AMERICA, N.A., as documentation agent for Lenders
("Documentation Agent"; Agent and Documentation Agent are collectively referred
to as "Co-Agents" and each, a "Co-Agent").
RECITALS
A. Borrower, the other Credit Parties party thereto, Lenders, and
Co-Agents have entered into the Credit Agreement dated as of September 20, 2000,
as amended by the First Amendment to Credit Agreement dated as of March 8, 2001,
and the Second Amendment to Credit Agreement dated as of March 23, 2001
(collectively, "Credit Agreement"), pursuant to which Co- Agents and Lenders are
providing financial accommodations to or for the benefit of Borrower upon the
terms and conditions contained therein. Unless otherwise defined herein,
capitalized terms or matters of construction defined or established in Annex A
to the Credit Agreement shall be applied herein as defined or established
therein.
B. Borrower has requested in the letter attached hereto as Appendix A
that Co-Agent and Lenders make certain amendments to, and consent to certain
matters under, the Credit Agreement and other Loan Documents, and Co-Agent and
Lenders are willing to do so subject to the terms and conditions of this
Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the continued performance by
Borrower and each other Credit Party of their respective promises and
obligations under the Credit Agreement and the other Loan Documents, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower, the other Credit Parties signatory hereto,
Lenders, and Co-Agents hereby agree as follows:
1. Ratification and Incorporation of Credit Agreement and Other Loan
Documents. Except as expressly modified under this Amendment, (a) each Credit
Party hereby acknowledges, confirms, and ratifies all of the terms and
conditions set forth in, and all of its obligations under, the Credit Agreement,
and (b) all of the terms and conditions set forth in the Credit Agreement are
incorporated herein by this reference as if set forth in full herein.
2. Amendments to Credit Agreement. The Credit Agreement and other Loan
Documents are hereby amended as follows:
(a) Section 5.4(c) of the Credit Agreement is amended by deleting
each reference to "Guarantor" and substituting "Guarantor (other than Holdings)"
in lieu thereof.
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(b) Section 6.14 of the Credit Agreement is amended by (i) deleting
the "and" immediately preceding clause (e) thereof, (ii) replacing the period at
the end thereof with ", and" and (iii) adding the following new clause (f) at
the end thereof:
(f) dividends or other distributions made by Borrower to
Holdings out of legally available funds to enable Holdings to pay
its reasonable legal, accounting and operational expenses incurred
in the ordinary course in an aggregate amount not to exceed $750,000
in any Fiscal Year.
(c) Section 9.8 of the Credit Agreement is amended by deleting each
reference to "Guarantor" and substituting "Guarantor (other than Holdings)" in
lieu thereof.
(d) The definition of "Borrower" in Annex A of the Credit Agreement
is deleted in its entirety and the following is substituted therefor:
"Borrower" shall mean Western Digital Technologies, Inc., a
Delaware corporation formerly known as Western Digital Corporation.
(e) The definition of "Change of Control" in Annex A of the Credit
Agreement is deleted in its entirety and the following is substituted therefor:
"Change of Control" means any of the following: (a) any Person
or group of Persons (within the meaning of the Securities Exchange
Act) shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act) of 20% or more of the issued and
outstanding shares of capital Stock of Holdings having the right to
vote for the election of directors of Holdings under ordinary
circumstances; (b) the occurrence of a change in the composition of
the board of directors of Holdings as a result of which fewer than a
majority of all directors are Incumbent Directors (as defined
below); (c) Borrower shall cease to own and control all of the
economic and voting rights associated with all of the outstanding
capital Stock of any of its Subsidiaries; and (d) Holdings shall
cease to own and control all of the economic and voting rights
associated with all of the outstanding capital Stock of Borrower.
For purposes of this definition, "Incumbent Director" means any
director who is either (i) a director of Holdings as of the date on
which the Third Amendment becomes effective, or (ii) a director who
is elected or nominated for election to the board of directors of
Holdings with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination (but
shall not include any individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to
the election of directors to Holdings).
(f) The definition of "Excluded Subsidiaries" in Annex A of the
Credit Agreement is deleted in its entirety and the following is substituted
therefor:
"Excluded Subsidiaries" shall mean Connex, SageTree, Pacifica,
Cameo Technologies, Inc, a Delaware corporation formerly known as
WDC.NET, Inc., Keen Personal Media, Inc., a Delaware corporation,
Keen Personal Technologies,
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Inc., a Delaware corporation, SANavigator, Inc., a Delaware
corporation, Western Digital Ventures, Inc., a Delaware corporation,
WD Merger Sub, Inc., a Delaware corporation, and Targets that become
"Excluded Subsidiaries" in accordance with the provisions of Section
6.1.
(g) The definition of "Financial Statements" in Annex A of the
Credit Agreement is deleted in its entirety and the following is substituted
therefor:
"Financial Statements" shall mean the consolidated and
consolidating income statements, statements of cash flows and
balance sheets of Borrower or Holdings, as the case may be,
delivered in accordance with Section 3.4 and Annex E.
(h) The definition of "Guarantors" in Annex A of the Credit
Agreement is deleted in its entirety and the following is substituted therefor:
"Guarantors" shall mean each of WD UK, WD IS and Holdings, and
each other Person, if any, that executes a guaranty or other similar
agreement in favor of Agent, for the benefit of Co-Agents and
Lenders, in connection with the transactions contemplated by the
Agreement and the other Loan Documents.
(i) The definition of "Subordinated Debt" in Annex A of the Credit
Agreement is deleted in its entirety and the following is substituted therefor:
"Subordinated Debt" shall mean the Indebtedness of Borrower and
Holdings evidenced by the Subordinated Notes and the other
Subordinated Debt Documents and any other Indebtedness of any Credit
Party subordinated to the Obligations in a manner and form
satisfactory to Co-Agents and Lenders in their sole discretion, as
to right and time of payment and as to any other rights and remedies
thereunder, including, in each case, any refinancing thereof
permitted under Section 6.14.
(j) The definition of "Subordinated Indenture" in Annex A of the
Credit Agreement is deleted in its entirety and the following is substituted
therefor:
"Subordinated Indenture" shall mean the Indenture dated as of
February 18, 1998, between Borrower, as Issuer, and State Street
Bank and Trust Company of California, N.A., as Trustee, as amended
by the First Supplemental Indenture dated as of April 6, 2001, by
and among Borrower, Holdings, and State Street Bank and Trust
Company of California, N.A., as Trustee.
(k) The definition of "Subordinated Notes" in Annex A of the Credit
Agreement is deleted in its entirety and the following is substituted therefor:
"Subordinated Notes" shall mean those certain Zero Coupon
Convertible Subordinated Debentures due 2018, issued by Borrower in
an aggregate original principal amount of $1,297,200,000.
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(l) The following new definitions are added to Annex A of the Credit
Agreement in appropriate alphabetical order:
"Holdings" shall mean Western Digital Corporation, a Delaware
corporation formerly known as Western Digital Holdings, Inc.
"Third Amendment" means the Third Amendment to Credit Agreement
dated as of April 7, 2001.
(m) Annex C of the Credit Agreement is amended by (i) deleting each
reference to "Guarantor" and substituting "Guarantor (other than Holdings)" in
lieu thereof, and (ii) deleting the reference to "Affiliates" and substituting
"Affiliates (other than Holdings)" in lieu thereof.
(n) Annex E of the Credit Agreement is deleted in its entirety, and
the revised version of Annex E attached hereto as Appendix B is substituted in
lieu thereof.
(o) Subsection (C) of Annex I of the Credit Agreement is deleted in
its entirety, and the following is substituted in lieu thereof:
(C) If to Borrower, at
Western Digital Technologies, Inc.
20511 Lake Forest Drive
Lake Forest, California 92630-7741
Attention: Mr. Steven M. Slavin
Telephone: (949) 672-7000
Facsimile: (949) 672-5495
With copies to:
Western Digital Technologies, Inc.
20511 Lake Forest Drive
Lake Forest, California 92630-7741
Attention: Michael A. Cornelius, Esq., General Counsel
Telephone: (949) 672-7000
Facsimile: (949) 672-7837
(p) Schedule 6.5 of the Credit Agreement is deleted in its entirety,
and the revised version of Schedule 6.5 attached hereto as Appendix C is
substituted in lieu thereof.
(q) All references in the Credit Agreement or the other Loan
Documents, in each case as in effect immediately prior to the effectiveness of
this Amendment, to "Western Digital Corporation, a Delaware corporation" shall
be deleted and replaced by "Western Digital Technologies, Inc., a Delaware
corporation formerly known as Western Digital Corporation."
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3. Consents under Credit Agreement.
(a) Pursuant to Section 6.5 of the Credit Agreement, Borrower is
prohibited from making any changes to its capital structure as described in
Disclosure Schedule 6.5 unless Co-Agents and Requisite Lenders have given their
prior written consent thereto. At the request of Borrower, Co-Agents and
Requisite Lenders hereby consent to Holdings entering into the First
Supplemental Indenture dated as of April 6, 2001, by and among Borrower,
Holdings, and State Street Bank and Trust Company of California, N.A., as
Trustee, and becoming a co-obligor with respect to the Subordinated Notes and
the other Subordinated Debt Documents.
(b) Pursuant to Section 6.1 of the Credit Agreement, Borrower is
prohibited from forming or acquiring any Subsidiary (with certain exceptions)
unless Co-Agents and Requisite Lenders have given their prior written consent
thereto. At the request of Borrower, Co- Agents and Requisite Lenders hereby
consent to the formation by Borrower of Western Digital Holdings, Inc., a
Delaware corporation formerly known as The Western Digital Group, Inc., and WD
Merger Sub, Inc., a Delaware corporation.
4. Conditions to Effectiveness. The effectiveness of this Amendment is
subject to satisfaction of each of the following conditions:
(a) receipt by Co-Agents of this Amendment duly executed by
Borrower, each of the other Credit Parties, Co-Agents and Requisite Lenders;
(b) receipt by Co-Agents of an original Continuing Guaranty duly
executed by Holdings and Agent;
(c) receipt by Agent of a copy of an opinion, in form and substance
satisfactory to Agent and its counsel, prepared by Houlihan Lokey Howard & Zukin
with respect to the solvency of Borrower, after giving effect to the
consummation of the Corporate Reorganization transaction described on Disclosure
Schedule (6.5);
(d) receipt by Agent of (i) a certificate of the Secretary of
Borrower certifying that attached to such certificate are complete and correct
copies of resolutions duly adopted by Borrower's Board of Directors that
authorize the execution and delivery of the documents necessary to effect the
Corporate Reorganization, and (ii) a certificate of the Secretary of Holdings
certifying that attached to such certificate are complete and correct copies of
resolutions duly adopted by Holdings' Board of Directors that authorize the
execution and delivery by Holding of a Continuing Guaranty, in each case in form
and substance satisfactory to Agent and its counsel;
(e) receipt by Agent of a UCC-2 amendment with respect to each UCC-1
financing statement and fixture filing set forth in Appendix B to the Schedule
of Documents filed against Borrower, amending such financing statement to
reflect Western Digital Technologies, Inc., as debtor; and
(f) the absence of any Defaults or Events of Default as of the date
hereof.
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5. Entire Agreement. This Amendment, together with the Credit Agreement
and the other Loan Documents, is the entire agreement between the parties hereto
with respect to the subject matter hereof. This Amendment supersedes all prior
and contemporaneous oral and written agreements and discussions with respect to
the subject matter hereof.
6. Representations and Warranties. Borrower and each other Credit Party
hereby represents and warrants that the representations and warranties contained
in the Credit Agreement were true and correct in all material respects when made
and, except to the extent that (a) a particular representation or warranty by
its terms expressly applies only to an earlier date or (b) Borrower or any other
Credit Party, as applicable, has previously advised Co-Agents in writing as
contemplated under the Credit Agreement, are true and correct in all material
respects as of the date hereof.
7. Reaffirmation by Guarantors. Each Credit Party that is also a
Guarantor, by its execution of this Amendment, consents to the terms hereof and
ratifies and reaffirms all of the provisions of the Guaranties.
8. Miscellaneous.
(a) Counterparts. This Amendment may be executed in identical
counterpart copies, each of which shall be an original, but all of which shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Amendment by facsimile transmission shall be effective as
delivery of a manually executed counterpart thereof.
(b) Headings. Section headings used herein are for convenience of
reference only, are not part of this Amendment, and are not to be taken into
consideration in interpreting this Amendment.
(c) Recitals. The recitals set forth at the beginning of this
Amendment are true and correct, and such recitals are incorporated into and are
a part of this Amendment.
(d) Effect. Upon the effectiveness of this Amendment, from and after
the date hereof, each reference in the Credit Agreement to "this Agreement,"
"hereunder," "hereof," or words of like import shall mean and be a reference to
the Credit Agreement as amended hereby and each reference in the other Loan
Documents to the Credit Agreement, "thereunder," "thereof," or words of like
import shall mean and be a reference to the Credit Agreement as amended hereby.
(e) No Novation. Except as expressly provided in Sections 2 and 3 of
this Amendment, the execution, delivery, and effectiveness of this Amendment
shall not (i) limit, impair, constitute a waiver of, or otherwise affect any
right, power, or remedy of Co-Agents or any Lender under the Credit Agreement or
any other Loan Document, (ii) constitute a waiver of any provision in the Credit
Agreement or in any of the other Loan Documents, or (iii) alter, modify, amend,
or in any way affect any of the terms, conditions, obligations, covenants, or
agreements contained in the Credit Agreement or any other Loan Document, all of
which are ratified and affirmed in all respects and shall continue in full force
and effect.
(f) Conflict of Terms. In the event of any inconsistency between the
provisions of this Amendment and any provision of the Credit Agreement, the
terms and provisions of this Amendment shall govern and control.
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IN WITNESS WHEREOF, this Third Amendment to Credit Agreement has been
duly executed as of the date first written above.
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and a Lender
By: /s/ ROBERT S. YASUDA
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Robert S. Yasuda
Duly Authorized Signatory
BANK OF AMERICA, N.A.,
as Documentation Agent and a Lender
By: /s/ STEPHEN E. ROSSI
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Name: Stephen E. Rossi
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Title: AVP
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THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ DALE GEORGE
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Name: Dale George
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Title: Vice President
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By: /s/ STEVEN M. SLAVIN
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Name: Steven M. Slavin
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Title: Vice President, Taxes &
Treasurer
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[Signatures Continued on Following Page]
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WESTERN DIGITAL (U.K.), LTD., a
corporation organized under the laws
of the United Kingdom
By: /s/ MICHAEL A. CORNELIUS
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Name: Michael A. Cornelius
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Title: Director
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WESTERN DIGITAL (I.S.) LIMITED, a
corporation organized under
the laws of Ireland
By: /s/ MICHAEL A. CORNELIUS
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Name: Michael A. Cornelius
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Title: Director
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