AMENDMENT NO. 1
TO
CREDIT AGREEMENT
This Amendment No. 1 to Credit Agreement ("Amendment"),
dated as of November 5, 1998, is entered into by and among Micron
Electronics, Inc., a Minnesota corporation (the "Borrower"), the
Co-Agents and Lenders named as such in the Credit Agreement, and
Credit Suisse First Boston, as administrative agent for Lenders
(solely in such capacity, the "Agent"). Capitalized terms used
herein but not defined herein shall have the same meaning as
given to them in the Credit Agreement (as defined below).
Recitals
Whereas, Borrower, Agent, Co-Agents and Lenders entered into
a Credit Agreement dated June 10, 1998 (the "Credit Agreement")
whereby a revolving line of credit was made available to
Borrower;
Whereas, the Borrower desires to invest and transfer cash
and other assets in and to four new Subsidiaries, each wholly-
owned by the Borrower;
Whereas, the Credit Agreement in its current state would
prohibit such investment and transfer; and
Whereas, the parties to the Credit Agreement wish to amend
the Credit Agreement to permit such investment and transfer.
Agreement
Now, Therefore, in consideration of the foregoing Recitals,
and intending to be legally bound, the parties hereto agree as
follows:
SECTION 1. Amendment to Credit Agreement.
1.1 The following definitions are added to Section 1.1,
"Definitions":
"Guarantors" means, on a joint and several basis, as co-
guarantors, each Subsidiary of the Borrower as shall execute and
deliver the Guaranty.
"Guaranty" means that certain Guaranty Agreement dated
as of November 5, 1998, by Guarantors in favor of Agent and
Lenders.
1.2 The definition of "Loan Documents" in Section 1.1
is amended by inserting the words "the Guaranty," immediately
following "the Letters of Credit" in the first line thereof.
1.3 Section 7.2, "Liquidation, Merger, Sale of Assets"
is hereby amended by deleting "and (h)" in line 24 thereof, and
inserting a new subsection (h) as follows: "(h) in connection with
the creation or initial capitalization of the Guarantors, and (i)".
1.4 Section 7.3, "Indebtedness" is hereby amended by
inserting the words "of Borrower" immediately following the word
"Indebtedness" in subsection (i) thereof.
1.5 Section 7.7, "Investments", is hereby amended by
deleting subsection (h) thereof in its entirety and replacing it as
follows: "(h) Investments by Borrower to or in any Subsidiary
(or any other person which as a result of the Investment becomes
a Subsidiary) which is not a Guarantor (a "Non-Guarantor
Subsidiary") or to or in any joint venture in which Borrower or
any Subsidiary is a joint venturer, provided that after making
any such Investment the total amount of all Investments made by
Borrower after the date of this Agreement to or in all Non-
Guarantor Subsidiaries and joint ventures (net of repayments and
return of capital) shall not exceed the sum of Seventy Million
Dollars ($70,000,000) and provided, further, that the total
amount of all equity Investments (as opposed to Investments
consisting of loans or advances) made by Borrower after the date
of this Agreement in all Non-Guarantor Subsidiaries and joint
ventures (net of return of capital) shall not exceed the sum of
Thirty-five Million Dollars ($35,000,000),".
1.6 Section 7.7, "Investments", is hereby further
amended by adding a new subsection (i) and re-numbering existing
subsection (i) as new subsection (j). New subsection (i) shall
read as follows: "(i) Investments in Guarantors not otherwise
provided for herein not to exceed Fifty Million Dollars ($50,000,000)
in the aggregate,".
SECTION 2. Representations and warranties. In order to
induce Agent and Lenders to enter into this Amendment and to
amend the Credit Agreement, Borrower represents and warrants to
each Lender and Agent as follows:
2.1 Corporate Power and Authority. Borrower has all
requisite corporate power and authority to enter into this
Amendment and to carry out the transactions contemplated by, and
perform its obligations under the Credit Agreement, as amended
hereby (the "Amended Agreement").
2.2 Authorization of Agreements. The execution and
delivery of this Amendment and the performance of the Amended
Agreement have been duly authorized by all necessary corporate
action on the part of Borrower.
2.3 Binding Obligation. This Amendment has been duly
executed and delivered by Borrower and is the binding obligation of
Borrower, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other
similar laws of general application and equitable principles
relating to or affecting creditors' rights.
2.4 Absence of Default. No event has occurred and is
continuing or would result from the execution, delivery or
performance of this Amendment which constitutes a Default or
Event of Default. The representations and warranties contained in
the Loan Documents are true, accurate and complete in all material
respects.
SECTION 3. Conditions Precedent. This Amendment shall be
deemed effective upon (i) its execution and delivery to the Agent
by Borrower and Majority Lenders, (ii) the receipt by Agent of a
certificate of a Responsible Person of Borrower and each
Guarantor as to the effectiveness of resolutions of the Board of
Directors of Borrower and each Guarantor authorizing Borrower to
enter into this Amendment and each Guarantor to execute, deliver
and perform the terms of the Guaranty, and (iii) receipt by Agent
of the Guaranty, duly executed and delivered by each Guarantor.
SECTION 4. Full Force and Effect; Entire Agreement. Except
to the extent expressly provided in this Amendment, the terms and
conditions of the Credit Agreement shall remain in full force and
effect. This Amendment and the Loan Documents constitute and
contain the entire agreement of the parties hereto and supersede
any and all prior agreements, negotiations, correspondence,
understandings and communications between the parties, whether
written or oral, respecting the subject matter hereof. The
parties hereto further agree that this Amendment and the Loan
Documents comprise the entire agreement of the parties thereto
and supersede any and all prior agreements, negotiations,
correspondence, understandings and other communications between
the parties thereto, whether written or oral respecting the
extension of credit by Lenders to Borrower.
SECTION 5. Release and Waiver. Borrower hereby acknowledges
and agrees that (a) it has no claim or cause of action against
Agent or any Lender or any parent, subsidiary or affiliate
thereof, or any of Agent's or any Lenders' officers, directors,
employees, attorneys or other representatives or agents in
connection with the Credit Agreement, the loans thereunder or the
transactions contemplated therein and herein; (b) it has no
offset or defense against any of its respective obligations,
indebtedness or contracts in favor of Agent or any Lender; and
(c) it recognizes that Agent and Lenders have heretofore properly
performed and satisfied in a timely manner all of its obligations
to and contracts with Borrower.
SECTION 6. Governing Law. This Amendment shall be governed
by, and shall be construed and enforced in accordance with, the
internal laws of the State of New York, without regard to
conflict of laws principles.
SECTION 7. Counterparts. This Amendment may be signed in any
number of counterparts, and by different parties hereto in
separate counterparts, with the same effect as if the signatures
to each such counterpart were upon a single instrument. All
counterparts shall be deemed an original of this Amendment.
In Witness Whereof, the parties hereto have caused this
Amendment to be executed as of the date first written above.
Borrower Micron Electronics, Inc.
By:/s/ T. Xxxx Xxxx
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Printed Name: T. Xxxx Xxxx
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Former Title: Executive VP, Chief Financial Officer
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Agent Credit Suisse First Boston
By:/s/ Xxxxx X. Xxxxxx
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Printed Name: Xxxxx X. Xxxxxx
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Title: Vice President
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By:/s/ Xxxx X. Fatto
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Printed Name: Xxxx X. Fatto
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Title: Assistant Vice President
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Co-Agents Credit Suisse First Boston
By:/s/ Xxxxx X. Xxxxxx
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Printed Name: Xxxxx X. Xxxxxx
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Title: Vice Prisident
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By:/s/ Xxxx X. Fatto
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Printed Name: Xxxx X. Fatto
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Title: Assistant Vice President
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U.S. Bank National Association
By:/s/ Xxxx Xxxxxx
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Printed Name: Xxxx Xxxxxx
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Title: Vice President
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Lenders Credit Suisse First Boston
By:/s/ Xxxxx X. Xxxxxx
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Printed Name: Xxxxx X. Xxxxxx
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Title: Vice President
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By:/s/ Xxxxxxx Xxxxx
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Printed Name: Xxxxxxxx Xxxxx
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Title: Associate
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U.S. Bank National Association
By:/s/ Xxxx Xxxxxx
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Printed Name: Xxxx Xxxxxx
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Title: Vice President
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Fleet National Bank
By:/s/ Xxxxx X. Xxxxxx
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Printed Name: Xxxxx X. Xxxxxx
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Title: Vice President
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Keybank National Association
By:/s/ Xxxxxxx X. Xxxxx, Xx.
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Printed Name: Xxxxxxx X. Xxxxx, Xx.
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Title: Assistant Vice President
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The Bank of Nova Scotia
By:/s/ Maarten Van Otterloo
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Printed Name: Maarten Van Otterloo
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Title: Senior Relationship Manager
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The Sumitomo Bank, Limited
By:/s/ Xxx Xxxxxxxx
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Printed Name: Xxx Xxxxxxxx
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Title: Vice President and Manager
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