SECOND AMENDMENT AGREEMENT
THIS SECOND AMENDMENT AGREEMENT (this "Amendment"), is entered
into as of January 31, 1997, between Komag, Incorporated, a Delaware corporation
(the "Borrower"), and The Industrial Bank of Japan, Limited, San Francisco
Agency (the "Bank").
WHEREAS, the Borrower and the Bank are parties to a Credit
Agreement dated as of December 15, 1995 (as amended prior to the date hereof,
the "Credit Agreement");
WHEREAS, the Borrower has requested that the Bank agree to
increase the Commitment to $50,000,000 and to make certain other amendments to
the Credit Agreement and the Bank has agreed to such request, subject to the
terms and conditions hereof;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties hereto agree as follows:
1. Definitions. All capitalized terms used in this Amendment
(including in the recitals hereof) and not otherwise defined herein shall have
the meanings assigned to them in the Credit Agreement.
2. Amendment to the Credit Agreement.
(a) Section 1.01 of the Credit Agreement is hereby
amended by deleting the definition of "Commitment" in its entirety and replacing
it with the following
"Commitment": The Commitment of Bank to make
Revolving Loans to Borrower pursuant to Article II up to, but not
exceeding, at any time outstanding the amount of $50,000,000.
(b) Section 1.01 of the Credit Agreement is hereby
amended by adding the following definitions thereto:
"Existing Loan": The Revolving Loan in the principal
amount of $35,000,0009 outstanding on the date of the Second Amendment
Agreement.
"Interim Loan": Any Revolving Loan initially made
after the date of the Second Amendment Agreement and before December
29, 1997, and any conversion or continuation thereof made prior to
December 29, 1997.
"Second Amendment Agreement": The Second Amendment
Agreement, dated as of January 31, 1997, between Borrower and Bank.
1.
(c) Section 2.1(e) of the Credit Agreement is hereby
amended by inserting at the end of the paragraph the following sentence:
Pursuant to Section 8.6(a) hereof, Bank may from time to time grant
participations (each a "Participation") in the Revolving Loans and
Commitment to one or more participants (each a "Participant"); if
Borrower should at any time or from time to time purchase any such
Participation from a Participant, then Borrower shall give Bank
immediate notice of such purchase and the outstanding amount of the
Revolving Loans shall be reduced to the extent of the interest in such
Revolving Loans so purchased by Borrower (i.e., the purchase by
Borrower of the interest of such Participant in the Revolving Loans
shall be treated as a prepayment by Borrower of the Revolving Loans to
the extent of such interest so purchased), and the Commitment shall be
reduced by such selling Participant's Participation interest in the
Commitment allocated to such Participant under the Participation so
purchased by Borrower.
(d) Section 2.1 of the Credit Agreement is hereby
amended to add a Section 2.1(i) thereto to be inserted after existing Section
2.1(h) as follows:
(i) Second Amendment Transition. Any other provision in this
Agreement to the contrary notwithstanding: (i) unless the maturity of
the Existing Loan is accelerated pursuant to the provisions of Section
7.1 hereof, the Existing Loan may not be repaid except on December 29,
1997, (ii) no Interim Loan which is a Eurodollar Rate Loan may have an
Interest Period ending after December 29, 1997, unless such Interest
Period commences on December 29, 1997, and (iii) from November 29,
1997, to December 29, 1997, Interim Loans may be made, converted, or
continued only as Prime Rate Loans.
(e) Section 8.6(D) of the Credit Agreement is hereby
amended by inserting the phrase "or amend or waive the provisions of Sections
6.2(a), (b) or (c)" after the word "sentence".
(f) The form of Exhibit B to the Credit Agreement
shall be deleted and the form of Exhibit B attached hereto shall be inserted in
lieu thereof.
3. Conditions of Effectiveness. The effectiveness of Section 2
of this Amendment shall be subject to the conditions that the Bank shall have
received, on or before the date hereof, (a) a copy of this Amendment executed
and delivered by a duly authorized officer of the Borrower, (b) a certificate of
the Secretary or Assistant Secretary of the Borrower, dated the date hereof,
certifying a copy of resolutions of the Borrower's Board of Directors that
approve the execution and delivery of this Amendment, (c) a promissory note in
the form attached as Exhibit B hereto executed and delivered by a duly
authorized officer of the Borrower, and (d) a participation agreement executed
and delivered by The First National Bank of Chicago.
2.
4. Miscellaneous.
(a) Credit Agreement Otherwise Not Affected. Except
as expressly amended pursuant hereto, the Credit Agreement shall remain
unchanged and in full force and effect and is hereby ratified and confirmed in
all respects.
(b) Counterparts. This Amendment may be executed by
one or more of the parties to this Amendment in any number of separate
counterparts, each of which, when so executed, shall be deemed an original, and
all of said counterparts taken together shall be deemed to constitute but one
and the same instrument. A set of the copies of this Amendment signed by all the
parties shall be lodged with the Borrower and the Bank.
(c) Governing Law. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
3.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
KOMAG, INCORPORATED
By: /s/ Xxxxxxx X. Xxxxx, Xx.
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Title: SVP, CFO
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THE INDUSTRIAL BANK OF JAPAN,
LIMITED, acting through its San
Francisco Agency
By:
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Title:
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