EXHIBIT 10.32.5
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
("Amendment") is entered into as of August 25, 2006, by and among WESTERN
DIGITAL TECHNOLOGIES, INC., a Delaware corporation ("Borrower"), WESTERN DIGITAL
(FREMONT), INC., a Delaware corporation ("XX Xxxxxxx"), the other credit parties
and guarantors 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, XX Xxxxxxx, the other Credit Parties party thereto, Lenders,
and Co-Agents have entered into the Amended and Restated Credit Agreement dated
as of September 19, 2003, as amended by the First Amendment to Amended and
Restated Credit Agreement dated as of September 8, 2004, the Second Amendment to
Amended and Restated Credit Agreement dated as of April 22, 2005, the Third
Amendment to Amended and Restated Credit Agreement dated as of September 30,
2005 (the "Third Amendment"), and the Fourth Amendment to Amended and Restated
Credit Agreement dated as of June 30, 2006 (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 in the letters attached hereto as APPENDICES A
and B (collectively, the "Consent Request Letters" and each, a "Consent Request
Letter") that Agent and Lenders consent to certain matters under and amend the
Credit Agreement, and Agent 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 the other Loan
Documents, 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.
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
2. Consent. Pursuant to the Consent Under Amended and Restated Credit
Agreement dated August 23, 2005, Agent and Requisite Lenders previously
consented to Borrower making [***] by Borrower of [***] pursuant to the terms of
a [***] entered into by Borrower [***]. Borrower has requested in the Consent
Request Letter dated July 24, 2006, attached hereto as APPENDIX A that Agent and
Requisite Lenders consent to Borrower making [***] pursuant to the terms of
[***] between [***] and Borrower dated as of [***], a copy of which is attached
to the Consent Request Letter. At Credit Parties' request, Agent and Lenders
hereby (i) consent to Borrower entering into [***] and (ii) agree that no
Default or Event of Default will have occurred under the Credit Agreement or the
other Loan Documents as a result of Borrower entering into [***] or [***] to
[***] described in [***].
3. Amendment to Credit Agreement.
(a) Section 1.5(a) is hereby deleted in its entirety and the
following is substituted in lieu thereof:
(a) Borrower shall pay interest to Agent, for the ratable
benefit of Lenders in accordance with the various Loans being
made by each Lender, in arrears on each applicable Interest
Payment Date, at the following rates: (i) with respect to the
Revolving Credit Advances, the Index Rate plus the Applicable
Revolver Index Margin per annum or, at the election of Borrower,
the applicable LIBOR Rate plus the Applicable Revolver LIBOR
Margin per annum; (ii) with respect to the Term Loan, the Index
Rate plus the Applicable Term Loan Index Margin per annum or, at
the election of Borrower, the applicable LIBOR Rate plus the
Applicable Term Loan LIBOR Margin per annum; and (iii) with
respect to the Swing Line Loan, the Index Rate plus the
Applicable Revolver Index Margin per annum. The Applicable L/C
Margin shall be 1.50% per annum, and the Applicable Unused Line
Fee Margin shall be 0.375% per annum.
As of the Closing Date, the Applicable Revolver Index Margin,
Applicable Revolver LIBOR Margin, Applicable Term Loan Index Margin and
Applicable Term Loan LIBOR Margin are as follows:
2
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
Applicable Revolver Index Margin 0.50%
Applicable Revolver LIBOR Margin 2.00%
Applicable Term Loan Index Margin 0.75%
Applicable Term Loan LIBOR Margin 2.25%
The Applicable Revolver Index Margin, Applicable Revolver LIBOR
Margin, Applicable Term Loan Index Margin and Applicable Term Loan LIBOR Margin
may be adjusted by reference to the following grids:
Level of
If Free Cash Flow is Applicable Margins:
-------------------- -------------------
> or equal to $100 million Level I
>$25 million, but < $100 million Level II
< or equal to $25 million Xxxxx XXX
Xxxxx X Xxxxx XX Xxxxx XXX
------- -------- ---------
Applicable Revolver Index Margin 0.00% 0.25% 0.50%
Applicable Revolver LIBOR Margin 1.50% 1.75% 2.00%
Applicable Term Loan Index Margin 0.25% 0.50% 0.75%
Applicable Term Loan LIBOR Margin 1.75% 2.00% 2.25%
Adjustments in the Applicable Revolver Index Margin, Applicable
Revolver LIBOR Margin, Applicable Term Loan Index Margin and Applicable Term
Loan LIBOR Margin commencing with the Fiscal Quarter ending June 30, 2006, shall
be implemented quarterly on a prospective basis based on Borrower's Free Cash
Flow for the trailing 12-Fiscal Month period ending as of the end of the
immediately preceding Fiscal Quarter. Adjustments in the Applicable Margins for
each calendar month shall commence with the first day of the first calendar
month that occurs more than five (5) days after the date of delivery to Lenders
of the quarterly unaudited or annual audited (as applicable) Financial
Statements evidencing the need for an adjustment. Concurrently with the delivery
of those Financial Statements, Borrower shall deliver to Agent and Lenders a
certificate, signed by its chief financial officer, vice president corporate
controller or vice president of finance, setting forth in reasonable detail the
basis for the continuance of, or any change in, the Applicable Margins. Failure
to timely deliver such Financial Statements shall, in addition to any other
remedy provided for in this Agreement, result in an increase in the Applicable
Margins to the highest level set forth in the foregoing grid, until the first
day of the first calendar month following the delivery of those Financial
Statements demonstrating that such an increase is not required. At any time that
an Event of Default has occurred and is continuing, in addition to the possible
application of the Default Rate in accordance with SECTION 1.5(D), the
Applicable Margins shall be calculated in accordance with Level III above and
any reduction in the Applicable Margins based upon the financial test
3
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
described above shall be deferred until the first day of the first calendar
month following the date on which such Event of Default is waived or cured.
(b) Clause (a) of the definition of "Commitment Termination Date"
is hereby deleted in its entirety and "September 20, 2009" is substituted
therefor.
(c) Clause (k) of the definition of the term "Permitted
Encumbrances" in ANNEX A to the Credit Agreement is hereby deleted in its
entirety and the following is substituted in lieu therefor:
(k) Liens created after the Closing Date by conditional sale
or other title retention agreements (including Capital Leases) or
in connection with purchase money Indebtedness with respect to
Equipment and Fixtures (i) that constitute the Original Leased
Equipment, or (ii) otherwise acquired by any Credit Party in the
ordinary course of business during the period from September 30,
2005, through September 30, 2007, involving the incurrence of an
aggregate amount of purchase money Indebtedness and Capital Lease
Obligations (including obligations of XX Xxxxxxx with respect to
the Additional Leased Equipment and the 2006 Leased Equipment) of
not more than $50,000,000 outstanding at any one time for all
such Liens (provided that such Liens attach only to the assets
subject to such purchase money debt and such Indebtedness is
incurred within 90 days following the purchase of such Equipment
or Fixtures and does not exceed 100% of the purchase price of the
subject assets) so long as Borrower and its Subsidiaries (other
than Excluded Subsidiaries) shall have Available Liquidity in
excess of $200,000,000 at the time that such Credit Party enters
into such purchase money debt or Capital Lease;
(d) The following definitions are hereby added to ANNEX A to the
Credit Agreement in appropriate alphabetical order:
"Fifth Amendment" means the Fifth Amendment to Amended and
Restated Credit Agreement dated as of August 25, 2006.
"Free Cash Flow" shall mean, with respect to Borrower and
its Subsidiaries (other than the Excluded Subsidiaries) on a
consolidated basis, for the 12-month period then ended, (a)
EBITDA for such period, minus (b) the sum of (i) Capital
Expenditures made during such period, (ii) any provision for
income taxes for such period, (iii) dividends and other
Restricted Payments made during such period in accordance with
SECTION 6.14 or as otherwise consented to under this Agreement,
(iv) Interest Expense for such period, and (v) payments of
principal made during such period with respect to Indebtedness of
Borrower and its Subsidiaries (other than Excluded Subsidiaries),
plus (c) the aggregate amount of the proceeds from the issuance
of common Stock of Borrower permitted or as otherwise consented
to under this Agreement in an amount not to exceed the aggregate
amount of redemption, purchase, repurchase
4
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
or retirement payments made during such period by Borrower to
holders of the common Stock of Holdings permitted or as otherwise
consented to under this Agreement.
"2006 Leased Equipment" shall mean the specific items of
leased Equipment described in Schedule 1 to the letter attached
to the Fifth Amendment as APPENDIX B.
(e) Paragraph (D) of ANNEX I to the Credit Agreement is hereby
amended by replacing the reference to "Xx. Xxxxxx X. Xxxxxx" with "Treasury
Department".
4. Conditions to Effectiveness. The effectiveness of this Amendment is
subject to satisfaction of each of the following conditions:
(a) receipt by Agent of this Amendment duly executed by
Borrower, XX Xxxxxxx, WD UK, WD IS, Agent and Lenders; and
(b) the absence of any Defaults or Events of Default as of
the date hereof.
5. Entire Agreement. This Amendment, together with the Credit
Agreement and the other Loan Documents, 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 Agent 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 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) 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) 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.
5
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
(c) 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) 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) Except as expressly provided in Section 2 and Section 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 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) Each of Borrower and each of the other Credit Parties (i)
acknowledges and agrees that it has no actual or potential claim or cause of
action against Agent or any Lender relating to any Loan Documents or any actions
or events occurring on or before the date of this Amendment and (ii) waives and
releases any right to assert such claim or cause of action.
(g) 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]
6
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
IN WITNESS WHEREOF, this Fifth Amendment to Amended and Restated
Credit Agreement has been duly executed as of the date first written above.
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and a Lender
By: /s/ Xxxx Xxxx
------------------------------------
Xxxx Xxxx
Duly Authorized Signatory
BANK OF AMERICA, N.A.,
as a Lender
By: /s/ X.X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: SVP
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ X. Xxxxxxxx
------------------------------------
Name: X. Xxxxxxxx
Title: VP
WESTERN DIGITAL TECHNOLOGIES, INC.,
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: SVP Administration,
General Counsel & Secretary
WESTERN DIGITAL FREMONT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
WESTERN DIGITAL (U.K.), LTD.,
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director
WESTERN DIGITAL (I.S.) LIMITED,
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX A
JULY 24, 2006 CONSENT REQUEST LETTER
July 24, 2006
ALL VIA OVERNIGHT COURIER:
General Electric Capital Corporation
000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Account Manager (Western Digital)
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
General Electric Capital Corporation DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP
000 Xxxx Xxxxx Xxxx 1999 Avenue of the Stars, Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000 Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Corporate Counsel Attention: Xxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Re: Consent under Amended and Restated Credit Agreement
Gentlemen:
Reference is made to the Amended and Restated Credit Agreement dated
as of September 19, 2003, as amended by the First Amendment to Amended and
Restated Credit Agreement dated as of September 8, 2004, Second Amendment to
Amended and Restated Credit Agreement dated as April 22, 2005, and Third
Amendment to Amended and Restated Credit Agreement dated as of September 30,
2005, and Fourth Amendment to Amended and Restated Credit Agreement dated as of
June 30, 2006 (including all annexes, exhibits and schedules thereto, and as the
same may be amended, restated, supplemented or otherwise modified from time to
time, collectively, the "Credit Agreement"), by and among Western Digital
Technologies, Inc., a Delaware corporation formerly known as Western Digital
Corporation ("Borrower"), Western Digital (Fremont), Inc. ("XX Xxxxxxx"), the
other credit parties party thereto, General Electric Capital Corporation, a
Delaware corporation ("GE Capital"), as administrative agent (in such capacity,
"Administrative Agent" or "Agent") for the lenders ("Lenders"), Bank of America,
N.A., as documentation agent for Lenders ("Documentation Agent"; Administrative
Agent and Documentation Agent are collectively referred to as "Co-Agents" and
each, a "Co-Agent"), and Lenders. 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.
1. Request for Consent to [***]. SECTION 6.2 of the Credit Agreement
provides that no Credit Party shall make or permit to exist any investment in,
or make, accrue or permit to exist loans or advances of money to, any Person,
through the direct or indirect lending of money, holding of securities or
otherwise, subject to the specific exceptions set forth therein. In that
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
certain consent letter dated August 23, 2005 executed Agent, Requisite Lenders,
Borrower and each Guarantor, Agent and Lenders consented to [***] with respect
to the [***] by Borrower of [***] pursuant to a [***] entered into by Borrower
and [***] effective as of [***], which agreement is attached hereto as EXHIBIT
A. Pursuant to that certain [***], a copy of which is attached hereto as EXHIBIT
B ("[***]"), Borrower is to make [***]. Request is hereby made for consent to
the [***], and agreement by the Agent and Lenders that no Default or Event of
Default will have occurred under the Credit Agreement or the other Loan
Documents as a result of Borrower entering into [***] or [***].
2. Request for Change in Authorized Signatories. Annex E of the Credit
Agreement requires that the Chief Financial Officer or Treasurer of Borrower
sign certain financial and other reports provided pursuant to the Credit
Agreement. The Chief Financial Officer or Treasurer of Borrower has previously
delivered reports issued under Annex F of the Credit Agreement. Borrower hereby
requests that any of the following be permitted to sign such financial and other
reports issued pursuant to the Credit Agreement and to issue request for consent
or amendment letters:
a. Xxxxx Xxxxxxxx, Chief Financial Officer;
b. Xxx Xxxxxxx, Vice President Corporate Controller;
c. Xxxxxxxx Xxxxx, Vice President Finance;
d. Xxx X. Xxxxxx, Xx. Vice President, Administration, General Counsel and
Secretary; or
e. Xxxxxxx Xxx, Vice President Corporate Law.
Please feel free to call if you have any questions or need
clarification.
Sincerely,
/s/ Xxxxx Xxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxx
Chief Financial Officer
Western Digital Technologies, Inc.
Attachments: Exhibits A and B
cc: Xxx Xxxxxxx
Xxxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx Xxx, Esq.
Xxxxxxx Xxxxxx Xxxxxx, Esq.
9
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX B
AUGUST 4, 2006 CONSENT REQUEST LETTER
August 4, 2006
ALL VIA OVERNIGHT COURIER:
General Electric Capital Corporation
000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Account Manager (Western Digital)
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
General Electric Capital Corporation DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP
000 Xxxx Xxxxx Xxxx 1999 Avenue of the Stars, Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000 Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Corporate Counsel Attention: Xxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Re: Request for Consent under and Amendment of Amended and Restated Credit
Agreement
Gentlemen:
Reference is made to the Amended and Restated Credit Agreement dated
as of September 19, 2003, as amended by the First Amendment to Amended and
Restated Credit Agreement dated as of September 8, 2004, Second Amendment to
Amended and Restated Credit Agreement dated as April 22, 2005, and Third
Amendment to Amended and Restated Credit Agreement dated as of September 30,
2005 ("Third Amendment to Credit Agreement"), and Fourth Amendment to Amended
and Restated Credit Agreement dated as of June 30, 2006 (including all annexes,
exhibits and schedules thereto, and as the same may be amended, restated,
supplemented or otherwise modified from time to time, collectively, the "Credit
Agreement"), by and among Western Digital Technologies, Inc., a Delaware
corporation formerly known as Western Digital Corporation ("Borrower"), Western
Digital (Fremont), Inc. ("XX Xxxxxxx"), the other credit parties party thereto,
General Electric Capital Corporation, a Delaware corporation ("GE Capital"), as
administrative agent (in such capacity, "Administrative Agent" or "Agent") for
the lenders ("Lenders"), Bank of America, N.A., as documentation agent for
Lenders ("Documentation Agent"; Administrative Agent and Documentation Agent are
collectively referred to as "Co-Agents" and each, a "Co-Agent"), and Lenders.
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.
1. Pursuant to the Consent under Amended and Restated Credit Agreement
dated as of June 24, 2004, Agent and Requisite Lenders previously consented to
Borrower and XX Xxxxxxx entering into a Master Equipment Lease Agreement with
CIT Technologies Corporation, d/b/a CIT Systems Leasing (the "CIT Lease"), and
agreed to release the Agent's Liens on the specific items of equipment set forth
in Exhibit A to Schedules 1 and 2 to the CIT Lease as of June 24, 2004 (the
"Original
10
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
Leased Equipment"). Pursuant to the Third Amendment to Credit Agreement, Agent
and Requisite Lenders consented to XX Xxxxxxx entering into additional exhibits
to the CIT Lease covering certain leased Equipment described therein (the
"Additional Leased Equipment") and agreed to release the Agent's Liens on the
Additional Leased Equipment.
2. The Credit Parties hereby request that Agent and Lenders consent to
Borrower and XX Xxxxxxx entering into the additional schedules to the CIT Lease
attached hereto as Schedule 1, and agree (a) to release the Liens of Agent, on
behalf of Co-Agents and Lenders, on the specific items of equipment listed on
such Schedule 1 (the "2006 CIT Leased Equipment"), and (b) that no Default or
Event of Default has occurred as a result of Borrower and/or XX Xxxxxxx entering
into such additional schedules to the CIT Lease.
3. In furtherance of the above, the Credit Parties hereby request that
Agent and Lenders agree to amend the Credit Agreement as follows:
(a) Clause (k) of the definition of the term "Permitted
Encumbrances" in ANNEX A to the Credit Agreement should be hereby deleted in its
entirety and the following substituted in lieu thereof:
"(k) Liens created after the Closing Date by conditional
sale or other title retention agreements (including Capital
Leases) or in connection with purchase money Indebtedness with
respect to Equipment and Fixtures (i) that constitute the
Original Leased Equipment, (ii) the Additional Leased Equipment,
or (iii) otherwise acquired by any Credit Party in the ordinary
course of business during the period from September 30, 2005,
through September 30, 2007, involving the incurrence of an
aggregate amount of purchase money Indebtedness and Capital Lease
Obligations (including obligations of XX Xxxxxxx with respect to
the 2006 CIT Leased Equipment) of not more than $50,000,000
outstanding at any one time for all such Liens (provided that
such Liens attach only to the assets subject to such purchase
money debt and such Indebtedness is incurred within 90 days
following the purchase of such Equipment or Fixtures and does not
exceed 100% of the purchase price of the subject assets) so long
as Borrower and its Subsidiaries (other than Excluded
Subsidiaries) shall have Available Liquidity in excess of
$200,000,000 at the time that such Credit Party enters into such
purchase money debt or Capital Lease;"
Please feel free to call if you have any questions or need
clarification.
Sincerely,
/s/ Xxxxx Xxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxx
Chief Financial Officer
Western Digital Technologies, Inc.
Attachments: Exhibit A
cc: Xxx Xxxxxxx
Xxxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx Xxx, Esq.
Xxxxxxx Xxxxxx Xxxxxx, Esq.
11
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
SCHEDULE 1
2006 CIT Leased Equipment
12
