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EXHIBIT 10.38.1
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FIRST AMENDMENT
TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
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First Amendment dated as of April 8, 1999 to Revolving Credit and Term
Loan Agreement (the "First Amendment"), by and among WESTERN DIGITAL
CORPORATION, a Delaware corporation (the "Borrower") and BANKBOSTON, N.A. and
the other lending institutions listed on Schedule 1 to the Credit Agreement (as
hereinafter defined) (the "Banks"), amending certain provisions of the Revolving
Credit and Term Loan Agreement dated as of November 4, 1998 (as amended and in
effect from time to time, the "Credit Agreement") by and among the Borrower, the
Banks, BankBoston, N.A. as agent for the Banks (in such capacity, the "Agent")
and The CIT Group/Business Credit, Inc. as co-agents for the Banks. Terms not
otherwise defined herein which are defined in the Credit Agreement shall have
the same respective meanings herein as therein.
WHEREAS, the Borrower and the Banks have agreed to modify certain terms
and conditions of the Credit Agreement as specifically set forth in this First
Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. AMENDMENT TO SECTION 1 OF THE CREDIT AGREEMENT. Section 1.1
of the Credit Agreement is hereby amended by inserting the following definitions
in the appropriate alphabetical order:
Komag Disposition. The sale by the Borrower of certain of its
assets related to its media production facility to Komag, Incorporated
pursuant to an Asset Purchase Agreement dated as of April 8, 1999
between the Borrower and Komag, Incorporated, which Asset Purchase
Agreement shall be in form and substance reasonably satisfactory to the
Agent, for a purchase price of approximately $65,000,000, which
consideration shall be paid (a) in shares of Komag, Incorporated's
common stock having a fair market value at the time of the consummation
of the disposition by the Borrower of approximately $35,000,000; and
(b) a subordinated seller note in favor of the Borrower from Komag,
Incorporated in the principal amount of approximately $30,000,000,
which subordinated note shall be in substantially the form and
substance attached hereto as Exhibit H.
Komag Stock Sale. The sale by the Borrower from time to time
pursuant to Section 10.5.2 hereof of the common stock it owns of Komag,
Incorporated and which common stock was received by the Borrower from
Komag, Incorporated as payment of the purchase price in the Komag
Disposition, any other securities issued as a dividend or other
distribution with respect to or in exchange for or in replacement of
such common stock.
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SECTION 2. AMENDMENT TO SECTION 10 OF THE CREDIT AGREEMENT. Section 10
of the Credit Agreement is hereby amended as follows:
(a) Section 10.3(d) of the Credit Agreement is hereby amended by
inserting immediately after the words "set forth on Schedule 10.3)" which appear
in Section 10.3(d) the words: "and Investments consisting of the shares of
common stock of Komag, Incorporated received by the Borrower from Komag,
Incorporated as payment of a portion the purchase price in the Komag
Disposition, any other securities issued as a dividend or other distribution
with respect to or in exchange for or in replacement of such common stock and
the Investment consisting of the subordinated note from Komag, Incorporated
received by the Borrower from Komag, Incorporated as payment of a portion the
purchase price in the Komag Disposition".
(b) Section 10.5 of the Credit Agreement is hereby amended by deleting
Section 10.5.2 in its entirety and restating it as follows:
Section 10.5.2. Disposition of Assets. The Borrower will not,
and will not permit any of its Subsidiaries to, become a party to or
agree to or effect any disposition of assets, other than the
disposition of assets in the ordinary course of business, consistent
with past practices; provided, however, so long as no Default or Event
of Default shall have occurred and is continuing or would exist after
giving effect thereto, the Borrower shall be permitted to (a) enter
into a sale and leaseback arrangement in respect of the real property
located at Irvine, California and/or Rochester, Minnesota in an
arms-length transaction for fair and reasonable value; (b) consummate
the Komag Disposition; and (c) consummate any Komag Stock Sale,
provided, in the case of any Komag Stock Sale, the total amount of the
consideration received by the Borrower for each share of the Komag,
Incorporated capital stock sold by the Borrower equals such capital
stock's fair market value as determined as of the date of such sale.
Notwithstanding anything to the contrary contained in this
Section 10.5.2, (a) the Borrower and its Subsidiaries shall not be
permitted to dispose of any assets or take (or omit to take) any action
in connection with any asset sale or other disposition or engage in any
other transaction which action (or omission) would require any
repayment, repurchase or redemption (or any mandatory offer to repay,
repurchase or redeem) by the Borrower or any of its Subsidiaries of the
Subordinated Notes or any other Subordinated Debt pursuant to the
Subordinated Indenture or any other Subordinated Debt Document prior to
the repayment in full in cash of all the Obligations and the
termination in full of the Total Commitment, or would violate the
provisions of the Subordinated Indenture or similar agreement; (b) the
Borrower shall not directly or indirectly sell or otherwise dispose of
all or substantially all of its assets; and (c) except as expressly
permitted in this Section 10.5.2, neither the Borrower nor its
Subsidiaries shall sell or otherwise dispose of all or substantially
all of the capital stock of any Person which is a Guarantor or is an
entity the capital stock of which is pledged under the Loan Documents
by the Borrower or any Guarantor, except for transfers to the Borrower
or another Guarantor (with each such transfer to the Borrower or
another Guarantor to be subject to the Agent's security interest
therein for the benefit of the Agent and the Banks).
SECTION 3. CONDITIONS TO EFFECTIVENESS. This First Amendment shall not
become effective until the Agent receives a counterpart of this First Amendment,
executed by the Borrower, the Guarantors and the Majority Banks.
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SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby repeats,
on and as of the date hereof, each of the representations and warranties made by
it in Section 8 of the Credit Agreement, and such representations and warranties
remain true as of the date hereof (except to the extent of changes resulting
from transactions contemplated or permitted by the Credit Agreement and the
other Loan Documents and changes occurring in the ordinary course of business
that singly or in the aggregate are not materially adverse, and to the extent
that such representations and warranties relate expressly to an earlier date),
provided, that all references therein to the Credit Agreement shall refer to
such Credit Agreement as amended hereby. In addition, the Borrower hereby
represents and warrants that the execution and delivery by the Borrower and its
Subsidiaries of this First Amendment and the performance by the Borrower and its
Subsidiaries of all of its agreements and obligations under the Credit Agreement
as amended hereby and the other Loan Documents are within the corporate
authority of each the Borrower and its Subsidiaries and has been duly authorized
by all necessary corporate action on the part of the Borrower and its
Subsidiaries.
SECTION 5. RATIFICATION, ETC. Except as expressly amended hereby, the
Credit Agreement, the Security Documents and all documents, instruments and
agreements related thereto are hereby ratified and confirmed in all respects and
shall continue in full force and effect. The Credit Agreement and this First
Amendment shall be read and construed as a single agreement. All references in
the Credit Agreement or any related agreement or instrument to the Credit
Agreement shall hereafter refer to the Credit Agreement as amended hereby.
SECTION 6. NO WAIVER. Nothing contained herein shall constitute a
waiver of, impair or otherwise affect any Obligations, any other obligation of
the Borrower or any rights of the Bank Agents or the Banks consequent thereon.
SECTION 7. COUNTERPARTS. This First Amendment may be executed in one or
more counterparts, each of which shall be deemed an original but which together
shall constitute one and the same instrument.
SECTION 8. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as a document under seal as of the date first above written.
WESTERN DIGITAL CORPORATION
By: /s/ XXXXXX X. XXXXXX
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Title: Xxxxxx X. Xxxxxx
V.P., Taxes & Treasurer
BANKBOSTON, N.A.
By: /s/ [SIGNATURE ILLEGIBLE]
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Title: Director
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ [SIGNATURE ILLEGIBLE]
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Title: Vice President
XXXXXX FINANCIAL, INC.
By: /s/ XXXX XXXXXX
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Title: Xxxx Xxxxxx
FLEET CAPITAL CORPORATION
By: /s/ XXXXXXX X. XXX XXXXXXXXXX
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Xxxxxxx X. Xxx Xxxxxxxxxx
Title: Senior Vice President
FINOVA CAPITAL CORPORATION
By: /s/ XXXXX XXX
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Title: Xxxxx Xxx
Director
LASALLE BUSINESS CREDIT, INC.
By: /s/ XXXXXX XXXXXXXXX
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Xxxxxx Xxxxxxxxx
Title: Vice President,
Senior Loan Officer
FREMONT FINANCIAL CORPORATION
By: /s/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx
Title: Vice President
FLEET BUSINESS CREDIT CORPORATION
(f/k/a SANWA BUSINESS CREDIT CORP.)
By: /s/ XXXXXXX X. XXX XXXXXXXXXX
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Xxxxxxx X. Xxx Xxxxxxxxxx
Title: Senior Vice President
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RATIFICATION OF GUARANTY
The undersigned guarantors hereby acknowledges and consents to the
foregoing First Amendment as of April 8, 1999, and agrees that the Guarantee
dated as of November 4, 1998 from WD UK and the Guaranty dated as of February
12, 1999 from WDC Storage Systems, Inc. in favor of the Agent and each of the
Banks remains in full force and effect, and each Guarantor confirms and ratifies
all of its obligations thereunder.
WDC STORAGE SYSTEMS, INC.
By: /s/ X. XXXXX PLANT
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Title: President
WESTERN DIGITAL (U.K.) LIMITED
By: /s/ XXXXXXX X. XXXXXXXXX
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Title: Assistant Secretary
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