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EXHIBIT 10.38.4
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FOURTH AMENDMENT
TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
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Fourth Amendment dated as of August 27, 1999 to Revolving Credit and
Term Loan Agreement (the "Fourth 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-agent 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 Fourth
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 as follows:
(a) The definition of "Applicable Margin" contained in Section 1.1 of
the Credit Agreement is hereby amended by deleting the table which appears in
such definition in its entirety and restating it as follows:
Base Rate Eurodollar Rate Letter of
Loans Loans Credit Fees
Level Excess Availability (basis points) (basis points) (basis points)
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I (i) Excess Availability is 75 200 175
greater than $150,000,000
and (ii) Consolidated
Tangible Net Worth is
greater than $300,000,000
II (i) Excess Availability is 100 225 200
greater than $150,000,000
and (ii) Consolidated
Tangible Net Worth is
equal to or less than
$300,000,000
III Excess Availability is 125 250 225
greater than $100,000,000 but
less than or equal to
$150,000,000
IV Excess Availability is less 150 275 250
than or equal to $100,000,000
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(b) the definition of "Consolidated Tangible Capital Funds" is hereby
amended by deleting such definition in its entirety and restating it as follows:
Consolidated Tangible Capital Funds. As at any date of
determination, the sum of (a) Consolidated Tangible Net Worth on such
date, plus (b) the aggregate principal amount of the Subordinated Notes
outstanding on such date, plus all accrued interest owing on such
Subordinated Notes on such date, plus (c) any other adjustments to
Consolidated Tangible Net Worth as is agreed in writing among the
Borrower, the Agent and the Majority Banks; provided, however, for
purposes of calculating compliance with the covenant contained in
Section 11.1 hereof, (1) any nonrecurring and restructuring charges
taken in the third and fourth fiscal quarters of the 1999 fiscal year,
up to an aggregate amount of not more than $73,000,000 and of which not
more than $15,000,000 shall be in cash, (2) any one-time restructuring
charge taken in the first fiscal quarter of the 2000 fiscal year in
connection with the Borrower's consolidation of certain of its
operations in Singapore, up to an aggregate amount of not more than
$30,000,000 and (3) any noncash charges taken in connection with any
writedowns in the valuation of the capital stock of Komag, Incorporated
which the Borrower obtained in the Komag Disposition, which would
otherwise be required to be deducted from the calculation of
Consolidated Tangible Capital Funds shall not be deducted for purposes
of calculating compliance with Section 11.1 of this Credit Agreement.
SECTION 2. AMENDMENT TO SECTION 11 OF THE CREDIT AGREEMENT. Section 11
of the Credit Agreement is hereby amended as follows:
(a) Section 11.1 of the Credit Agreement is hereby amended by deleting
the table which appears in Section 11.1 in its entirety and restating it as
follows:
PERIOD AMOUNT
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Closing Date - last day of Second Fiscal Quarter, 1999 $416,000,000
First Day of Third Fiscal Quarter, 1999 - last day $423,000,000
of Third Fiscal Quarter, 1999
First Day of Fourth Fiscal Quarter, 1999 - last day $410,000,000
of Fourth Fiscal Quarter, 1999
First Day of First Fiscal Quarter, 2000 - last day $295,000,000
of First Fiscal Quarter, 2000
First Day of Second Fiscal Quarter, 2000 - last day $250,000,000
of Second Fiscal Quarter, 2000
First Day of Third Fiscal Quarter, 2000 - last day $322,000,000
of Third Fiscal Quarter, 2000
First Day of Fourth Fiscal Quarter, 2000 - last day $412,000,000
of Fourth Fiscal Quarter, 2000
First Day of First Fiscal Quarter, 2001 - last day $427,000,000
of First Fiscal Quarter, 2001
First Day of Second Fiscal Quarter, 2001 - last day $434,000,000
of Second Fiscal Quarter, 2001
First Day of Third Fiscal Quarter, 2001 - last day $441,000,000
of Third Fiscal Quarter, 2001
Any time thereafter $448,000,000
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(b) Section 11.2 of the Credit Agreement is hereby amended by deleting
Section 11.2 in its entirety and restating it as follows:
11.2. CAPITAL EXPENDITURES. The Borrower will not make, or
permit any Subsidiary of the Borrower to make, Capital Expenditures in
any fiscal year that exceed, in the aggregate, $130,000,000 for the
Borrower's 1999 fiscal year, $100,000,000 for the Borrower's 2000
fiscal year and $170,000,000 in each fiscal year of the Borrower
thereafter.
SECTION 3. CONDITIONS TO EFFECTIVENESS. This Fourth Amendment shall not
become effective until the Agent receives the following:
(a) a counterpart of this Fourth Amendment, executed by the
Borrower, the Guarantors and the Majority Banks;
(b) written notice from the Borrower, dated not later than August
20, 1999, of the Borrower's election pursuant to Section 2.3 of the Credit
Agreement to reduce the Total Commitment by $25,000,000; and
(c) payment by the Borrower to the Agent for the pro rata accounts
of the Banks an amendment fee of $437,500.
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 Fourth 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 Fourth
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 Fourth 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 FOURTH 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 Fourth
Amendment as a document under seal as of the date first above written.
WESTERN DIGITAL CORPORATION
By: /s/
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Title:
BANKBOSTON, N.A.
By: /s/
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Title:
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/
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Title:
XXXXXX FINANCIAL, INC.
By: /s/
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Title:
FLEET CAPITAL CORPORATION
By: /s/
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Title:
FINOVA CAPITAL CORPORATION
By: /s/
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Title:
LASALLE BUSINESS CREDIT, INC.
By: /s/
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Title:
FREMONT FINANCIAL CORPORATION
By: /s/
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Title:
FLEET BUSINESS CREDIT CORPORATION
(f/k/a SANWA BUSINESS CREDIT CORP.)
By: /s/
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Title:
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RATIFICATION OF GUARANTY
The undersigned guarantors hereby acknowledges and consents to the
foregoing Fourth Amendment as of August 27, 1999, and agrees that the Guarantee
dated as of November 4, 1998 from WD UK and the Guaranty dated as of February
__, 1999 from Connex, 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.
CONNEX, INC.
By: /s/ X. XXXXX PLANT
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Title:
WESTERN DIGITAL (U.K.) LIMITED
By: /s/ XXXXXXX X. XXXXXXXXX
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Title:
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