THIRD AMENDMENT AND WAIVER
THIS THIRD AMENDMENT AND WAIVER (this "Amendment") is entered into
as of September 28, 1995 by and among STORAGE TECHNOLOGY CORPORATION, a
Delaware corporation ("STK"), STORAGETEK FINANCIAL SERVICES CORPORATION, a
Delaware corporation, STORAGE TECHNOLOGY DE PUERTO RICO, INC., a Delaware
corporation, and NETWORK SYSTEMS CORPORATION, a Delaware corporation
(collectively, the "Borrowers"), the banks listed on the signature pages
hereof and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national
banking association, as agent for the Lenders (the "Agent"), and as Swing
Line Bank and Issuing Bank.
WHEREAS, the Borrowers, Storagetek Distributed Systems Division,
Inc. (formerly XL/Datacomp, Inc.), a Delaware corporation ("DSD"), the
Lenders, the Agent for the Lenders, the Swing Line Bank and the Issuing Bank
are parties to an Amended and Restated Multicurrency Credit Agreement, dated
as of September 28, 1994, as amended pursuant to a First Amendment and
Waiver, dated as of April 20, 1995, and a Second Amendment and Waiver, dated
as of June 27, 1995 (as so amended, the "Credit Agreement");
WHEREAS, pursuant to Section 3(b) of the Second Amendment and
Waiver referred to above, DSD is no longer party to the Credit Agreement;
WHEREAS, STK (i) desires to exchange all outstanding shares of its
Convertible Exchangeable Preferred Stock for an aggregate principal amount of
up to $172,500,000 of 7% Convertible Subordinated Debentures due 2008 (the
"Debentures") to be issued by STK pursuant to the Indenture, dated as of
March 15, 1993, between STK and American Stock Transfer & Trust Company, as
trustee, (the "Exchange") and (ii) may subsequently convert all of the
Debentures into shares of common stock of STK (the "Debenture Conversion").
In connection with the foregoing, STK has requested that the Agent and the
Lenders consent to the Exchange and Debenture Conversion;
WHEREAS, the Borrowers also desire to amend the Credit Agreement to
effect certain other changes thereto as provided herein; and
WHEREAS, the Agent and the Lenders are willing to agree to such
requests, subject to the terms and conditions hereof;
NOW, THEREFORE, the parties hereto agree as follows:
1. Terms Defined in Credit Agreement. All capitalized terms
used in this Amendment and not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement.
2. Consent to the Exchange of CEP Stock. Subject to the terms
and conditions hereof, the Agent and the Lenders hereby consent to the Exchange
and the Debenture Conversion. The parties hereto acknowledge and agree that
the Debentures shall constitute Subordinated Debt under the terms and
conditions of the Credit Agreement.
3. Amendments, Waivers and Certain Related Consents.
-------------------------------------------------
(a) Section 6.03(a) of the Credit Agreement is hereby amended
by deleting "690,000,000" appearing in the fourth line thereof and inserting
"$517,500,000" in lieu thereof; provided, however, that upon the Debenture
Conversion then, as of the effective date thereof, Section 6.03(a) of the
Credit Agreement is hereby amended to increase such dollar amount to
"$560,500,000".
STK hereby agrees to provide notice (in accordance with
Section 9.02 of the Credit Agreement) to the Agent of the effective date of
the Debenture Conversion at least one Business Day prior thereto.
(b) The Agent and the Lenders hereby waive the applicability
of Section 6.02(g) regarding the sale (in one or a series of transactions) by
STK to one or more unaffiliated third parties of Inventory of STK having an
aggregate fair market value of up to $8,500,000 (the "Inventory Sale"). Upon
the closing of the Inventory Sale, the Inventory transferred pursuant thereto
shall no longer constitute Collateral. For purposes of Section 5(i) and the
other terms and provisions of the U.S. Security Agreement of STK, the
Inventory Sale shall be deemed to constitute a Transfer of Collateral
permitted pursuant to Section 6.02(g) of the Credit Agreement.
In furtherance of the foregoing, each of the parties
hereto agree that immediately prior to or simultaneously with the closing of
the Inventory Sale, the Liens on the Inventory sold pursuant thereto granted
under the U.S. Security Agreement of STK shall terminate and be released and
the Agent shall execute and deliver to STK such documents and instruments
reasonably requested by STK as shall be necessary to evidence termination and
release of all security interests as to the Inventory sold in the Inventory
Sale given by STK to the Agent under the Credit Agreement and such U.S.
Security Agreement.
(c) Section 1.01 of the Credit Agreement is hereby amended by
(I) inserting "(i)" immediately following the phrase "pursuant to" appearing
in the third line of the definition of "Program" and (II) inserting "or (ii)
a Receivables Financing Agreement (as amended and supplemented from time to
time) among the Trust as borrower, SFSC as servicer, STK as performance
guarantor and Royal Bank of Canada or its affiliate as lender and/or agent",
immediately following the parenthetical "(the 'Receivables Financing
Agreement')" appearing in the eighth line of the definition of "Program".
(d) Section 6.02(g) shall be amended by deleting
"$100,000,000" appearing in the proviso of clause (vii) thereof and
"$150,000,000" shall be inserted in lieu thereof.
(e) The Agent and the Lenders hereby (i) waive the
applicability of Sections 6.01(b) and 6.02(f) of the Credit Agreement to the
merger of NSC with and into STK (the "NSC Merger") and (ii) consent to the
NSC Merger provided that upon the effective date thereof STK has assumed, by
operation of law or otherwise, all obligations and liabilities of NSC.
(f) The Agent and the Lenders hereby consent to the exclusion
of $30,700,000, net of the tax impact thereof, to be paid by STK, pursuant to
the settlement of the shareholder class action filed against STK in April,
1992, from all calculations made for purposes of determining the Borrowers'
compliance with Section 6.03(d) of the Credit Agreement.
4. Conditions of Effectiveness. The effectiveness of this
Amendment shall be subject to the following conditions:
(a) All agreements, instruments and other documents entered into
by STK or any of its Affiliates in connection with or arising out of the
transactions described in Sections 2 and 3 above are in form and substance
satisfactory to the Agent and the Lenders.
(b) The Agent has received evidence (if requested by the Agent on
behalf of a Lender), in form and substance satisfactory to the Agent, that
(i) the representations and warranties contained in Article V of the Credit
Agreement are true and correct on and as of the date hereof as though made on
and as of such date and (ii) no Default or Event of Default then exists or
would result after giving effect to the matters set forth in Sections 2 and 3
above.
(c) The Agent shall have received such other documents and
materials as the Agent or any Lender through the Agent may request.
5. Miscellaneous.
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(a) Loan Documents Otherwise Not Affected. Except as expressly
waived pursuant hereto, the Loan Documents shall remain unchanged and in full
force and effect and are hereby ratified and confirmed in all respects. The
Lenders' and the Agent's execution and delivery of, or acceptance of, this
Amendment and any
OF CONFLICTS OF LAWS.
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.
THE BORROWERS:
--------------
STORAGE TECHNOLOGY CORPORATION
------------------------------
By:/s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Corporate Vice President
& Interim Chief Financial
Officer
STORAGETEK FINANCIAL SERVICES
------------------------------
CORPORATION
-----------
By:/s/ Xxxxxx X. Kali
---------------------------
Name: Xxxxxx X. Kali
Title: Vice President and Chief
Operating Officer
STORAGE TECHNOLOGY DE PUERTO RICO,
----------------------------------
INC.
----
By:/s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Treasurer
NETWORK SYSTEMS CORPORATION
---------------------------
By:/s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Treasurer
THE AGENT:
BANK OF AMERICA NATIONAL TRUST
------------------------------
AND SAVINGS ASSOCIATION,
------------------------
as Agent
By:/s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
THE LENDERS:
BANK OF AMERICA NATIONAL TRUST
------------------------------
AND SAVINGS ASSOCIATION
-------------------------
By:/s/ Xxxxx XxXxxxx
---------------------------
Name: Xxxxx XxXxxxx
Title: Vice President
BANK OF MONTREAL
-------------------------
By:/s/ Xxxxxx X. Xxxxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Managing Director
NBD BANK (formerly NBD BANK, N.A.)
----------------------------------
By:/s/ Xxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
FIRST INTERSTATE BANK OF DENVER
-------------------------------
By:/s/ Xxxx X. Xxxx
---------------------------
Name: Xxxx X. Xxxx
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
---------------------------------
By:/s/ Xxxxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Vice President
BANQUE NATIONALE DE PARIS
-------------------------
By:/s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
and Manager
By:/s/ Xxxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
THE SUMITOMO BANK LIMITED
-------------------------
By:/s/ Xxxxxxxxx Xxxxx
---------------------------
Name: Xxxxxxxxx Xxxxx
Title: Joint General Manage
