Exhibit 10.20
FOURTH AMENDMENT AND WAIVER
THIS FOURTH AMENDMENT AND WAIVER (this "Amendment") is
entered into as of December 22, 1995 by and among STORAGE TECHNOLOGY
CORPORATION, a Delaware corporation ("STK"), STORAGETEK FINANCIAL
SERVICES CORPORATION, a Delaware corporation ("SFSC"), 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 ("BofA"), 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, a Second Amendment and Waiver, dated as of June 27, 1995, and a
Third Amendment and Waiver, dated as of September 28, 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;
(i) permit the Borrowers to sell foreign, intercompany or
other Accounts that are not Eligible Accounts together with all
collections thereon and proceeds thereof (the "Transferred Accounts"),
on a recourse basis from time to time (such sales are referred to as the
"Accounts Sales") to BofA or any Affiliate thereof (each of BofA and its
Affiliates, when purchasing Transferred Accounts, is referred to as the
"Accounts Buyer") at an aggregate purchase price not to exceed at any
time outstanding $40,000,000 (with the aggregate face value of Accounts
sold by the Borrowers not to exceed at any time outstanding
$50,000,000), pursuant to a receivables transfer agreement, so long as
the proceeds of such Accounts Sales received by the Borrowers from the
Accounts Buyer are used, to the extent there are outstanding Advances,
to immediately repay outstanding Advances of such Borrowers under the
Credit Agreement and the Borrowers shall remain in compliance with the
Aggregate Borrowing Base at all times; (ii) waive the effect on certain
financial covenants in the Credit Agreement of a one-time restructuring
and related charges to earnings of STK in the Fiscal Quarter of STK
ending on December 29, 1995 in an amount not to exceed $165,000,000 (the
"1995 Restructuring Charge") so long as STK's Net Income in such Fiscal
Quarter (excluding the 1995 Restructuring Charge) is greater than or
equal to $0; and (iii) permit the sale of SFSC's stock (the "SFSC
Transferred Stock"), as well as permit SFSC to sell all or substantially
all of its Lease assets (the "SFSC Transferred Assets" and the SFSC
Transferred Stock, together with the SFSC Transferred Assets, are
referred to collectively as the "SFSC Transferred Interests"), to an
unaffiliated Person (a sale of the SFSC Transferred Stock and/or the
SFSC Transferred Assets as described herein (it being understood that
such sale of stock and/or assets may occur at separate times) is
referred to as an "SFSC Sale");
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:
2. Terms Defined in Credit Agreement. All capitalized terms used
in this Amendment and not otherwise defined herein shall have the mean
ings assigned to them in the Credit Agreement.
3. Amendments and Waivers to the Credit Agreement.
(a) In Section 1.01 of the Credit Agreement, the definition of
"Permitted Lien" is amended by (i) deleting "and" at the end of
clause (xiv), (ii) changing the period in clause (xv) to a semi-colon,
and (iii) inserting the following new clause:
"(xv) Liens from time to time on Accounts sold from
time to time by the Borrowers to BofA or any Affiliate of
BofA pursuant to a receivables transfer agreement."
(b) Section 3.01(a) of the Credit Agreement is amended by
deleting the amount "$40,000,000" therein and by inserting in lieu thereof the
amount "$50,000,000."
(c) Section 3.02(a) of the Credit Agreement is amended by
inserting the phrase "(which beneficiary may be a Lender or an Affiliate of a
Lender)" after the word "thereof" on the eighth line.
(d) Section 6.02(c) of the Credit Agreement is amended by (i)
deleting the word "and" from the seventeenth line, and by (ii) inserting
the phrase ", (vi) L/C Obligations in favor of BofA or any Affiliate of
BofA in connection with the Borrowers' sales of receivables to BofA or
any Affiliate of BofA, and (vii) Contingent Obligations in favor of BofA
or any Affiliate of BofA including, without limitation, in the form of
recourse to the Borrowers or guaranties by the Borrowers in connection
with the Borrowers' sales of receivables to BofA or any Affiliate of
BofA".
(e) The Agent and the Lenders waive compliance by the Borrowers
with Section 6.02(g) of the Credit Agreement to permit the Borrowers
from time to time to sell with recourse the Transferred Accounts to the
Accounts Buyer at an aggregate purchase price not to exceed at any time
outstanding $40,000,000 (with the aggregate face value of Accounts sold
by the Borrowers not to exceed $50,000,000 at any time outstanding), pur
suant to a receivables transfer agreement, provided, that, (i) the
proceeds received by the Borrowers from the Accounts Buyer shall be
used, to the extent there are outstanding Advances, to immediately repay
outstanding Advances under the Credit Agreement, (ii) the Borrowers
shall remain at all times in compliance with the Aggregate Borrowing
Base and (iii) prior to the occurrence of each Accounts Sale, the
Borrowers shall have delivered to the Agent a certificate of a
Responsible Officer stating that, after giving effect to such Accounts
Sale, the Borrowers will remain in compliance with the Aggregate
Borrowing Base and no Default or Event of Default will occur as a result
of the Accounts Sale. Upon the closing of each of the Accounts Sales,
the Transferred Accounts so sold by the Borrowers shall no longer
constitute Collateral except to the extent the Accounts Buyer elects to
draw upon any Letter of Credit provided for the account of the Borrowers
by the Issuing Bank in connection with Accounts Sales in lieu of seeking
recourse to the Borrowers, in which case such Transferred Accounts shall
be reassigned by the Accounts Buyer to the Agent for the benefit of the
Banks and, upon such reassignment, such Transferred Accounts shall be
deemed (without further action required by the Agent or the Banks) to
become Collateral subject again to the Security Agreements of the
applicable Borrowers. For purposes of the terms and provisions of the
Security Agreements of the Borrowers, each of the Accounts Sales shall
be deemed to constitute a Transfer of Collateral permitted pursuant to
Section 6.02(g) of the Credit Agreement.
(f) The Agent and the Lenders waive the applicability of
Sections 6.02(f), 6.02(g) and 7.01(m) of the Credit Agreement to an SFSC
Sale so long as in any such SFSC Sale fair market value is received for
the SFSC Transferred Interests sold and such SFSC Sale does not result
in a disposition of SFSC Transferred Interests for less than their book
value existing as of the date of such SFSC Sale. Upon the closing of an
SFSC Sale, the SFSC Transferred Interests so sold shall no longer
constitute Collateral. For purposes of Section 5(i) and the other terms
and provisions of the U.S. Security Agreement of SFSC (as well as for
purposes of Section 5(i) and the other terms and provisions of the U.S.
Security Agreement of STK), an SFSC Sale shall be deemed to constitute a
Transfer of Collateral permitted pursuant to Section 6.02(g) of the
Credit Agreement.
(g) The Agent and the Lenders waive compliance by STK with
Sections 6.03(a), (b), (c), (d), (e) and (f) of the Credit Agreement for
the Fiscal Quarter of STK ending December 29, 1995 solely to the extent
necessary due to STK's incurrence of the 1995 Restructuring Charge and
so long as STK's Net Income (excluding the 1995 Restructuring Charge)
for such Fiscal Quarter ending December 29, 1995 is greater than or
equal to $0.
(h) Section 8.03 of the Credit Agreement is amended by deleting
the last sentence thereof and by inserting in lieu thereof the
following:
"BofA and its Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from,
acquire equity interests in, purchase assets of, and
generally engage in any business with any Borrower and any of
their Subsidiaries as though BofA were not the Agent
hereunder and without notice to or consent of the Lenders.
The Lenders acknowledge that, pursuant to such activities,
BofA or its Affiliates may receive information regarding the
Borrowers or their Subsidiaries (including information that
may be subject to confidentiality obligations in favor of the
Borrowers or their Subsidiaries) and acknowledge that the
Agent shall be under no obligation to provide such
information to them."
4. Consents; Certain Related Agreements.
(a) Each of the Agent and the Lenders (and each of the
Borrowers in their capacities as guarantors) hereby acknowledges and consents
to the terms of Section 2 hereof and all of the other matters, terms and
provisions set forth herein.
(b) In furtherance of the foregoing, each of the parties hereto
agree that, immediately prior to or simultaneously with the closing of
the Accounts Sales, the Liens on the Transferred Accounts granted under
the Security Agreements of the Borrowers shall terminate and be released
and the Agent shall execute and deliver to STK or the other Borrowers
such documents and instruments reasonably requested by STK or the other
Borrowers as shall be necessary to evidence the termination and release
of all security interests as to the Transferred Accounts given by STK or
the other Borrowers to the Agent under the Credit Agreement and such
Security Agreements. Notwithstanding the foregoing, if the Accounts
Buyer elects to draw upon any Letter of Credit provided for the account
of the Borrowers by the Issuing Bank in connection with Accounts Sales
in lieu of seeking recourse to the Borrowers, such Transferred Accounts
shall be reassigned by the Accounts Buyer to the Agent for the benefit
of the Banks and, upon such reassignment, shall be deemed (without
further action required by the Agent or the Banks) to become Collateral
subject again to the Security Agreements of the applicable Borrowers and
the Agent may take such action as it deems appropriate in connection
therewith.
(c) In furtherance of the foregoing, each of the parties hereto
agree to the following: (i) immediately prior to or simultaneously with
the closing of an SFSC Sale and the satisfaction of the conditions noted
in Section 6, the Liens on the SFSC Transferred Interests granted under
the U.S. Security Agreements of SFSC and STK shall terminate and be
released and the Agent shall execute and deliver to SFSC or STK such
documents and instruments (including, without limitation, terminations
of security agreements and guaranties) reasonably requested by SFSC or
STK as shall be necessary to evidence (A) the termination and release of
all security interests as to the SFSC Transferred Interests given by
SFSC or STK to the Agent under the Credit Agreement and such U.S.
Security Agreements and (B) the transactions contemplated by clauses
(ii) and (iii) below; (ii) as of the termination of such Liens, SFSC
shall no longer be a Borrower under the Credit Agreement or under any of
the other Loan Documents; provided, however, that for purposes only of
Section 6.02(b) of the Credit Agreement, SFSC shall, following an SFSC
Sale, be deemed to be a Borrower and thus shall be entitled to the
rights provided by, and subject to the obligations imposed by, such
Section 6.02(b); and (iii) following the closing of an SFSC Sale, (A)
the assets (if any) remaining with SFSC may be sold or transferred by
SFSC to STK, to another Subsidiary of STK or to any other Person to the
extent permitted by the terms of the Credit Agreement, (B) the stock of
SFSC (if not sold at the time of the SFSC Sale) may be sold or
transferred to any other Person and (C) SFSC may be dissolved or merged
with and into STK or another Subsidiary of STK.
5. Conditions of Effectiveness of Sections 2(b), (c), (d), (g)
and (h). The effectiveness of Sections 2(b), (c), (d), (g) and (h) of
this Amendment shall be subject to the following conditions:
(a) 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 as of the date hereof as
though made on such date and (ii) no Default or Event of Default then
exists.
(b) The Borrowers shall have paid or reimbursed the Agent for
all fees, costs and expenses (including, but not limited to, all reasonable
Attorney Costs) incurred in connection with the development,
preparation, negotiation, execution and delivery of this Amendment and
the consummation of the transactions contemplated hereby.
(c) The Agent shall have received from STK for the benefit of
the Banks a fee relating to the execution and delivery of this Amendment in
an amount equal to .075% of the total Commitments of the Banks.
(d) The Agent shall have received executed signature pages for this
Amendment from the Borrowers and the Banks.
6. Conditions of Effectiveness of Section 2(f). The
effectiveness of Section 2(f) of this Amendment shall be subject to the
following conditions:
(a) The Agent has received evidence (if requested by the Agent
on behalf of a Lender), in form and substance satisfactory to the Agent,
that all actions necessary or, in the opinion of the Agent, desirable to
continue to perfect and protect and maintain the priority of the Liens
created by the Loan Documents have been taken with respect to (i) any
Collateral of SFSC that is not sold in the SFSC Sale and (ii) the
consideration received by STK or its Affiliate in exchange for the SFSC
Transferred Interests sold in the SFSC Sale, which consideration shall
constitute Proceeds of Collateral and, as such, shall remain subject to
the terms and provisions of one of the U.S. Security Agreements.
(b) SFSC shall have delivered to the Agent a Periodic Release
Certificate and complied with the other terms of Section 6.02(b)(ii) of
the Credit Agreement, if applicable to the SFSC Sale.
(c) 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 SFSC Sale
and the matters set forth in Sections 2 and 3 above relating to the SFSC
Sale.
7. Miscellaneous.
(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 other documents and instruments in
connection herewith shall not be deemed to create a course of dealing or
otherwise create any express or implied duty by any of them to provide
any other or further amendments, consents or waivers in the future.
(b) Successors and Assigns. The provisions of this Amendment
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns.
(c) Counterparts. This Amendment may be executed by one or
more of the parties to this Amendment in any number of separate counterparts,
each of which, when so executed, shall be deemed an original, and all of
said counterparts taken together shall be deemed to constitute but one
and the same instrument.
(d) Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS.
(e) Fees and Expenses. The Borrowers acknowledge and agree
that they will pay or reimburse the Agent for all fees, costs and expenses
(including, but not limited to, all reasonable Attorney Costs) incurred
by the Agent in connection with the SFSC Sale and the Accounts Sales.
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/ Xxxx X. XxXxxxxx
-----------------------------------
Name: Xxxx X. XxXxxxxx
Title: Vice President &
Treasurer
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/ Xxxx X. XxXxxxxx
-----------------------------------
Name: Xxxx X. XxXxxxxx
Title: Vice President &
Treasurer
NETWORK SYSTEMS CORPORATION
By: /s/ Xxxx X. XxXxxxxx
-----------------------------------
Name: Xxxx X. XxXxxxxx
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/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
FIRST INTERSTATE BANK OF DENVER
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice
President
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Managing Director
BANQUE NATIONALE DE PARIS
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice
President & Manager
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
THE SUMITOMO BANK LIMITED
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: General Manager
