EXHIBIT 10.47.7
SEVENTH AMENDMENT TO CREDIT AGREEMENT
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT ("Amendment") is
entered into as of June 28, 2002, by and among WESTERN DIGITAL TECHNOLOGIES,
INC., a Delaware corporation formerly known as Western Digital Corporation
("Borrower"), the other credit parties party hereto (each individually a "Credit
Party" and collectively, the "Credit Parties"), the lenders signatory hereto
(each individually a "Lender" and collectively the "Lenders"), GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware 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,
the Second Amendment to Credit Agreement dated as of March 23, 2001, the Third
Amendment to Credit Agreement dated as of April 7, 2001, the Fourth Amendment to
Credit Agreement dated as of September 26, 2001, the Fifth Amendment to the
Credit Agreement dated as of December 21, 2001, and the Sixth Amendment to the
Credit Agreement dated as of January 11, 2002 (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 that Co-Agents and Requisite Lenders amend
the Credit Agreement, and Co-Agents 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. 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. Amendment to Credit Agreement.
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(a) Section 6.1(viii)(B) of the Credit Agreement is
hereby amended by deleting the reference to "and under the definition of
"Permitted Excluded Subsidiary Transactions" set forth in Annex A" therein.
(b) Sections 6.2(c) and 6.3(a)(vi) of the Credit
Agreement are hereby amended by deleting the reference to "Permitted Excluded
Subsidiary Transactions and" therein.
(c) Section 6.3(b) of the Credit Agreement is hereby
amended by (i) deleting the "and" immediately preceding clause (iv), (ii)
replacing the period at the end thereof with "; and" and (iii) adding the
following new clause (v) at the end thereof:
(v) the repayment of Subordinated Debt to the extent
permitted in Section 6.14.
(d) Section 6.5(b)(iii) of the Credit Agreement is
hereby amended by adding "repurchase or" immediately preceding the reference
therein to "refinance".
(e) Section 6.14 of the Credit Agreement is hereby
amended by (i) deleting the "and" immediately preceding clause (f), (ii)
replacing the period at the end thereof with "; and" and (iii) adding the
following new clause (g) at the end thereof:
(g) the redemption, purchase, retirement, defeasance
or similar payments made to holders of Borrower's
Subordinated Debt so long as such payments do not
exceed $15,000,000 in the aggregate during any Fiscal
Quarter.
(f) The following definitions are hereby added to
Annex A to the Credit Agreement in appropriate alphabetical order:
"Designated Eligible Foreign Account" shall mean an
Eligible Foreign Account that is an obligation of any
of the Account Debtors listed on Annex K.
"Seventh Amendment" shall mean the Seventh Amendment
to Credit Agreement dated as of June 18, 2002.
(g) Annex A to the Credit Agreement is hereby amended
by deleting the definitions of the following terms:
(i) "Combined Expenditures"; and
(ii) "Permitted Excluded Subsidiary
Transactions".
(h) Clause (b) of the definition of the term
"Borrowing Base" in Annex A to the Credit Agreement is hereby deleted in its
entirety and the following is substituted in lieu therefor:
(b) the least of (i) $50,000,000, (ii) 25%
of the value of all Collateral included in clauses (a), (b)
and (c) of this definition of "Borrowing Base," and (iii) (A)
85% of (I) Borrower's Designated Eligible Foreign Accounts,
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in each case up to the respective Eligibility Cap listed on
Annex K for each foreign Account Debtor of Borrower set forth
on Annex K, and (II) Borrower's Eligible Foreign Accounts
(other than the Designated Eligible Foreign Accounts), subject
to an acceptable credit review by Co-Agents of the foreign
Account Debtors of Borrower, minus (B) the Dilution Reserve
with respect to such Eligible Foreign Accounts; plus
(i) Paragraph (a) of Annex G to the Credit
Agreement is hereby deleted in its entirety and the following is substituted in
lieu therefor:
(a) Maximum Capital Expenditures.
Borrower and its subsidiaries (other than
the Excluded Subsidiaries) on a consolidated
basis shall not make aggregate Capital
Expenditures, at the end of each Fiscal
Quarter set forth below for the 12-month
period then ended, that exceed the
respective amounts set forth opposite such
periods:
Period Ending On Maximum Capital Expenditures
---------------- ----------------------------
June 28, 2002 $65,000,000
September 27, 2002 $75,000,000
December 27, 2002 $75,000,000
March 28, 2003 $80,000,000
June 27, 2003 $80,000,000
provided; that, beginning with the Fiscal
Year ending June 28, 2002, and for each
Fiscal Year thereafter, to the extent that
the maximum capital expenditure amount
identified above (the "Maximum Capital
Expenditure") for any such Fiscal Year
(i.e., Year 1) exceeds the amount of Capital
Expenditures actually made by Borrower and
such Subsidiaries during such Fiscal Year
(such excess being the "Excess Amount"),
then the amount of permitted Capital
Expenditures for each period above that ends
during the immediately succeeding Fiscal
Year (i.e., Year 2) will be increased by the
positive amount (the "Carry Over Amount")
equal to (i) the lesser of (A) the Excess
Amount and (B) 25% of the amount of the
Maximum Capital Expenditure for such Fiscal
Year (i.e., Year 1), minus (ii) that portion
of the Excess Amount, if any, expended
during a previous period during such
succeeding Fiscal Year. For purposes of
measuring compliance herewith, the Carry
Over Amount shall be deemed to be the last
amount spent on Capital Expenditures in any
Fiscal Quarter.
(j) Paragraph (c) of Annex G to the Credit
Agreement is hereby deleted in its entirety and the following is substituted in
lieu therefor:
(c) Minimum Tangible Net Worth.
Borrower and its subsidiaries (other than
the Excluded Subsidiaries) on a consolidated
basis shall maintain Tangible Net Worth, at
the end of each Fiscal Quarter set forth
below, equal to or greater than the
respective amounts set forth opposite such
periods:
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Period Ending On Tangible Net Worth
---------------- ------------------
June 28, 2002 $81,600,000
September 27, 2002 $89,000,000
December 27, 2002 $100,100,000
March 28, 2003 $109,100,000
June 27, 2003 $117,800,000
(k) Paragraph (d) of Annex G to the Credit
Agreement is hereby deleted in its entirety and the following is substituted in
lieu therefor:
(d) Borrower and its Subsidiaries
(other than the Excluded Subsidiaries) on a
consolidated basis shall not make New
Venture Investments (i) in an aggregate
amount that exceeds $5,000,000 during the
Fiscal Quarter ending on June 28, 2002, or
(ii) in any amount on or after June 29,
2002.
(l) GE Capital's wire transfer information
in Annex H to the Credit is hereby amended by deleting the reference to "Bankers
Trust" as the Bank Name therein and replacing it with "Deutsche Bank Trust
Company Americas" in lieu therefor.
(m) Annex K to the Credit Agreement is
hereby added to the Credit Agreement, a copy of which is attached hereto as
APPENDIX A.
(n) Index of Appendices to the Credit
Agreement is hereby deleted in its entirety and the revised version of the Index
of Appendices attached hereto as APPENDIX B is substituted in lieu thereof.
3. Waivers under Credit Agreement.
(a) Pursuant to Section 6.1(a) of the Credit
Agreement, Credit Parties are prohibited from forming or acquiring any
Subsidiary except as otherwise provided therein. Co-Agents and Requisite Lenders
have been informed that Borrower has formed Western Digital Korea, Ltd., a
corporation organized under the laws of the Republic of Korea ("WD Korea"),
which is a wholly-owned Subsidiary of Borrower. At the request of Borrower,
Co-Agents and Requisite Lenders hereby waive any Default or Event of Default
that has occurred as a result of the formation of WD Korea; provided, that (i)
WD Korea shall remain a wholly-owned Subsidiary of Borrower, (ii) the aggregate
amount of capital paid or payable to WD Korea by Borrower or any other Credit
Party as of any date shall not exceed the amount of $5,000,000, (iii) the fair
market value of the assets of WD Korea shall not be in excess of $10,000,000,
and (iv) WD Korea shall be an Excluded Subsidiary for purposes of the Credit
Agreement and the other Loan Documents. If Borrower, any other Credit Party, or
WD Korea fails to comply with either clauses (i), (ii) or (iii) of the preceding
sentence, then such failure shall constitute an Event of Default under the Loan
Documents.
(b) Pursuant to Section 6.14 of the Credit Agreement,
Credit Parties are prohibited from making any Restricted Payments except as
otherwise provided therein. Co-Agents and Requisite Lenders have been informed
that Borrower has made Restricted Payments prior to the date hereof to holders
of Borrower's Subordinated Debt in connection with the
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redemption, purchase, retirement or defeasance of Subordinated Debt in the
aggregate amount of $13,437,532.00. At the request of Borrower, Co-Agents and
Requisite Lenders hereby waive any Default or Event of Default that has occurred
as of the date hereof as a result of payments made by Borrower to holders of
Borrower's Subordinated Debt in the aggregate amount of $13,437,532.00, in
connection with the redemption, purchase, retirement or defeasance of the
Subordinated Notes described in that certain list of Subordinated Notes
previously provided by Borrower to Agent and Requisite Lenders.
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) payment of a $50,000 amendment fee by Borrower to
Agent, for the ratable benefit of Lenders; and
(c) the absence of any Defaults or Events of Default
as of the date hereof.
5. Entire Agreement. This Amendment, together with the Credit
Agreement, the other Loan Documents and the letter agreement of even date
herewith among Borrower, each of the other Credit Parties, Co-Agents and
Requisite Lenders, 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.
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(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 any Co-Agent 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.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, this Seventh Amendment to Credit Agreement
has been duly executed as of the date first written above.
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent, a Co-Agent and
a Lender
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------------
Duly Authorized Signatory
BANK OF AMERICA, N.A.,
as Documentation Agent, a Co-Agent and
a Lender
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxxx
------------------------------------
Title: SVP
-----------------------------------
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
------------------------------------
Title: Vice President
-----------------------------------
WESTERN DIGITAL TECHNOLOGIES, INC.,
a Delaware corporation formerly known as
Western Digital Corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------
Title: Vice President, Taxes & Treasurer
------------------------------------
[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/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
------------------------------------
Title: Assistant Secretary
-----------------------------------
WESTERN DIGITAL (I.S.) LIMITED,
a corporation organized under the laws
of Ireland
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
------------------------------------
Title: Director
-----------------------------------
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APPENDIX A
Annex K
to Credit Agreement
List of Designated Eligible Foreign Account Debtors with Eligibility Caps
Eligibility Cap for all Accounts
Designated Eligible Foreign Account Debtor Owing by Foreign Account Debtor
------------------------------------------ -------------------------------
Achieva Technology PTE Ltd. $8,000,000
Xx Xxxxxx LLC $2,000,000
Digiland International Ltd. $2,500,000
Elko Grupa AS $3,500,000
Fujitsu Coworco Ltd. $2,500,000
Genuine C & C (H.K.) Limited $8,000,000
Giga-Byte Technology Co., Ltd. $2,000,000
Jamjoon Advanced Technology $1,000,000
Karma Distribution (S) PTE Ltd. $7,500,000
North Africa Import Export & Contracting $2,000,000
ProCA spol. s r.o. $1,000,000
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APPENDIX B
INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
Annex D (Section 2.1(a)) - Schedule of Documents
Annex E (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (Annex A) - Commitments as of Closing Date
Annex K (Annex A) - Designated Eligible Foreign Accounts
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule (1.1) - Agent Representative
Disclosure Schedule (3.2) - Executive Offices; Collateral Locations; FEIN
Disclosure Schedule (3.4(a)) - Financial Statements
Disclosure Schedule (3.4(b)) - Projections
Disclosure Schedule (3.6) - Real Estate and Leases
Disclosure Schedule (3.7) - Labor Matters
Disclosure Schedule (3.8) - Ventures and Affiliates; Stock
Disclosure Schedule (3.11) - Tax Matters
Disclosure Schedule (3.12) - ERISA Plans
Disclosure Schedule (3.13) - Litigation
Disclosure Schedule (3.15) - Intellectual Property
Disclosure Schedule (3.17) - Hazardous Materials
Disclosure Schedule (3.18) - Insurance
Disclosure Schedule (3.19) - Deposit and Disbursement Accounts
Disclosure Schedule (3.20) - Government Contracts
Disclosure Schedule (3.22) - Material Agreements
Disclosure Schedule (5.1) - Trade Names
Disclosure Schedule (6.3) - Indebtedness
Disclosure Schedule (6.5) - Permitted Reorganization
Disclosure Schedule (6.6) - Guaranteed Indebtedness
Disclosure Schedule (6.7) - Existing Liens
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