The CIT Group/
Business Credit
3rd Floor
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October 11, 1995
Maxtor Corporation
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Ladies and Gentlemen:
We refer to the Financing Agreement between The CIT Group/Business Credit,
Inc., as Agent and Lender, and Maxtor Corporation, as Borrower, dated
September 16, 1993, as amended from time to time (the "Agreement").
Capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed to such terms in the Agreement.
You have advised us that as of September 30, 1995, Maxtor Corporation was
not in compliance with a) the Capital Expenditure covenant for the two
fiscal quarters ended September 30, 1995 as provided in Section 6.11 of the
Agreement; b) the Working Capital covenant for the fiscal quarter ended
September 30, 1995 as provided in Section 6.12 of the Agreement; c) the
Maximum Working Capital covenant for the fiscal quarter ended September 30,
1995 as provided in Section 6.13 of the Agreement; d) the Leverage Ratio
covenant for the fiscal quarter ended September 30, 1995 as provided in
Section 6.14 of the Agreement; e) the Operating Profit covenant for the
fiscal quarter ended September 30, 1995 as provided in Section 6.16 of the
Agreement; and f) the Net Worth covenant for the fiscal quarter ended
September 30, 1995 as provided in Section 6.9 of the Agreement.
We hereby confirm to you that (i) we hereby waive these violations of the
Agreement for the period(s) ending on the specified date, and (ii) such
violations shall not constitute Defaults or Events of Default under the
Agreement.
Additionally, and pursuant to mutual understanding, the Agreement shall be,
and hereby is amended, effective as of the date hereof as follows:
1. The number "$50,000,000.00" in the Definition of Line of Credit
appearing in Section 1 is hereby deleted and the number
"$20,000,000.00" is hereby substituted in lieu thereof.
2. The number "$20,000,000.00" in Paragraph 1 of Section 4 of the
Agreement is hereby deleted and the number "$8,000,000.00" is hereby
substituted in lieu thereof.
3. Paragraph 1 of Section 3 of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"1. The Lenders agree, subject to the terms and conditions of this
Financing Agreement from time to time, and within x) the Availability
and y) the Line of Credit, but subject to the Lenders' right to make
"overadvances", to make loans and advances to the Company on a
revolving basis (i.e. subject to the limitations set forth herein, the
Company may borrow, repay and re-borrow Revolving Loans). Such loans
and advances shall be in amounts up to seventy-five percent (75%) of
the outstanding Eligible Domestic Accounts Receivable of the Company.
All requests for loans and advances must be received by an officer of
the Agent no later than 2:00 p.m., New York time, of the day on which
such loans and advances are required. Should the Agent for any reason
honor requests for advances in excess of the limitations set forth
herein, such advances shall be considered "overadvances" and shall be
made in the Agent's sole discretion, subject to any additional terms
the Agent or the Lenders deems necessary. Upon thirty (30) days prior
written notice to the Agent and the Lenders, the Company may reduce
the Line of Credit, provided, however, that x) each reduction in the
Line of Credit shall constitute a permanent reduction in the Line of
Credit, y) the Company shall immediately repay to the Agent the amount
by which the Obligations exceed the maximum amount thereof computed
pursuant to the definition of Availability, and z) each reduction must
be for at least $1,000,000.00 or whole multiples thereof."
In consideration of our execution and delivery of this waiver and amendment
letter, and to compensate us for processing your request for such waivers,
you have agreed to pay to the Agent, for the ratable benefit of the
Lenders, an Accommodation Fee of $50,000.00, which will be due and payable
upon the date hereof. Payment shall be by means of a charge to your loan
account with us.
Except as otherwise herein specifically provided, no other change,
amendment, or modification in or to any of the other terms or provisions of
the Agreement is hereby intended or implied. This letter shall not
constitute a waiver of any other existing Defaults or Events of Default
under the Agreement (whether or not we have knowledge thereof) and shall
not constitute a waiver of any future Defaults or Events of Default
whatsoever. If the foregoing is in accordance with your understanding,
please so indicate by signing and returning to us the enclosed copy of this
letter.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
(as AGENT and LENDER)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Assistant Vice President
Read and Agreed to:
Maxtor Corporation:
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title:VP Finance and Treasurer
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "Agreement") is to be effectuated by the
completion and execution of the Assignment Execution Form attached hereto.
A copy of these terms need not be physically attached to the Assignment
Execution Form, but rather these terms are incorporated therein by
reference. Terms defined in the Assignment Execution Form (or in the
Financing Agreement described therein) are used herein as therein defined.
The Assignor and the Assignee agree as follows:
1. Assignment; Effect of Certain Dates.
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For value received, without recourse, representation or warranty (except as
expressly set forth herein) the Assignor sells and assigns to the Assignee,
and the Assignee purchases and assumes from the Assignor, all of the
Assignor's right, title and interest in and to, and all of the Assignor's
obligations with respect to 30.0% of the Line of Credit, but in no event
more than $15,000,000.00 (the "Assigned Share") under the Financing
Agreement. On the date the Agent has confirmed by facsimile to the
Assignor that the Agent has received a fully completed Assignment Execution
Form signed by the Assignor and the Assignee (the "Contract Date"), the
obligations of the Assignor and the Assignee hereunder shall be
irrevocable. No (i) failure of any party to settle on the Settlement Date
any amount owed hereunder, (ii) dispute respecting settlement or (iii)
bankruptcy, insolvency or other condition whatsoever respecting any person
shall in any way impair, reduce or otherwise affect the transfer of the
Assigned Share to the Assignee, and the release of the Assignor, as
contemplated by this Assignment.
2. Rights and Obligations of Assignee: Release of Assignor.
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From and after the Settlement Date, the Assignee shall be entitled to
all rights, powers and privileges of, and shall perform all of the duties
and obligations of, the Assignor under the Financing Agreement and all
related documents, to the extent of the Assigned Share, including without
limitation (i) the right to receive all payments in respect of the Assigned
Share which are unpaid on the Settlement Date or become payable from and
after the Settlement Date, whether on account of principal, interest, fees,
indemnities, increased costs, additional amounts or otherwise, (ii) the
right to vote and to instruct the Agent under the Financing Agreement to
the extent of the Assigned Share, (iii) the right to set off and to
appropriate and apply deposits of the Company (and any other obligor) as
set forth in the Financing Agreement or any related document, (iv) the
right to receive notices, requests, demands
and other communications from the Agent, the Company and/or any other party
required to give notices, requests, demands or other communications, and
(v) the obligation to fund all payments required to be made by a Lender
holding the Assigned Share. From and after the Settlement Date, the
Assignor shall be released from all duties and obligations under the
Financing Agreement and all related documents to the extent of the Assigned
Share.
3. Representations and Warranties of Assignor.
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The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the Assigned Share, and that such Assigned Share is
free and clear of any adverse claim and (ii) except for the representations
and warranties in subclause (i) above and in Section 4 below makes no
representation or warranty and assumes no responsibility whatsoever
regarding the assignment affected hereby, including, without limitation,
with respect to any statements, warranties or representations made in or in
connection with the Financing Agreement or any other instrument or document
furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Financing
Agreement or any other instrument or document furnished pursuant thereto,
or the financial condition of the Company, any guarantor or any other
person, or the performance or observance by the Company or any guarantor or
any other party of any of its obligations under the Financing Agreement or
any other instrument or document furnished pursuant thereto.
4. Mutual Representations and Warranties.
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Each of the Assignor and the Assignee represents and warrants to the
other party as of the Contract Date and the Settlement Date as follows:
(a) it is duly organized and validly existing and has full power and
authority, and has taken or will take all action necessary, to
execute and deliver the Assignment Execution Form and to fulfill its
obligations under, and to consummate the transactions contemplated
by, this Assignment;
(b) the making and performance by it of this Assignment do not and will
not violate any law or regulation of the jurisdiction of its
incorporation or any other law or regulation applicable to it
provided that neither party makes any representation or warranty
respecting the Securities Act of 1933, as amended;
(c) the Assignment Execution Form has been duly executed and delivered
by
it and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as limited by (i)
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors, rights generally and (ii) general equitable principles;
and
(d) all approvals, authorizations or other actions by, or filings with,
any governmental authority, if any, necessary for the validity or
enforceability of its obligations under this Assignment have been
obtained or taken, as the case may be.
5. Representations and Warranties of Assignee.
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The Assignee (i) confirms that it has received a copy of the Financing
Agreement, any amendments or waivers thereto and other instruments or
documents furnished pursuant thereto, and any related documents, which have
in each case been requested by it, together with copies of any financial
statements requested by it, and that it has, independently and without
reliance on the Assignor, the Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Assignment, (ii) agrees that it
will, independently and without reliance upon the Assignor, the Agent or
any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Financing Agreement and any other
instruments or documents furnished pursuant thereto, and any related
documents, (iii) appoints the Agent to act in the capacity set forth in the
Financing Agreement, and (iv) agrees that it will perform in accordance
with their terms all of the obligations by which the terms of the Financing
Agreement are required to be performed by it as a Lender.
6. Single Net Payment.
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Unless the Assignor and Assignee agree otherwise, on the Settlement
Date a single, net, final payment shall be made, which shall be in an
amount mutually agreed upon by the Assignor and the Assignee, taking into
account the then outstanding principal amount, if any, of the Assigned
Share, any fee payable to or by the Assignee, and all accrued fees,
interest and other amounts payable under the Financing Agreement or any
related documents to the Agent for the account of the Lenders, but not the
Collateral Management Fee, the Documentation Fee, the Syndication Fee, or
other fees that pursuant to the Financing Agreement are solely for the
benefit of the Agent or CITBC.
7. Agents Duties.
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The Agent, by its signature below, agrees that; a) without the consent
of all lenders, it will not knowingly make any advance in excess of the
Line of Credit; b) unless instructed to the contrary by the Required
Lenders, it will not knowingly make overadvances (within the Line of Credit
only) in excess of $1,500,000 in the aggregate at any one time outstanding;
and c) it will give reasonably prompt notice to the Lenders of i) the
making of any overadvances, ii) the Agent's intention to review the books
and records of, or inspect the Collateral of, the Company and iii) the
Agent's intention of making loans to the Company other than the loans under
the Financing Agreement.
8. Termination.
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Should Assignee wish to terminate its relationship with the Company,
Assignee may do so only as of the second or any subsequent Anniversary Date
and then only upon at least one hundred and twenty (120) days prior written
notice of termination. Within thirty (30) days of the receipt of such
notice, i) the Lenders shall give notice of termination to the Company in
accordance with the terms of the Financing Agreement, in which event this
Assignment Agreement shall automatically terminate when the Financing
Agreement with the client is fully terminated and the Obligations repaid in
full or ii) a Lender or CITBC will, as of the Anniversary Date, purchase
your share for the full amount then due.
9. Governing Law.
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THIS ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF.
10. Counterparts; Amendments; Binding Effect.
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The Assignment Execution Form may be executed in any number of
counterparts and by different parties in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument. The terms
hereof may not be amended or modified except in a writing executed by the
Assignor and the Assignee. Any change in the Settlement Date to an earlier
date than that specified on the Assignment Execution Form shall also
require the consent of the Assignor, Assignee and Agent. The terms hereof
shall bind and inure to the benefit of and be enforceable by the parties
executing the Assignment Execution Form and their respective successors and
permitted assigns and the Company.
11. Schedule of Date.
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In no event shall the Settlement Date be earlier than three (3)
Business
Days prior to the Contract Date.
12. Waiver of Jury Trial.
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THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
ASSIGNMENT, OR THE ACTIONS OF EITHER OF THEM IN THE PERFORMANCE OR
ENFORCEMENT THEREOF.
13. Effectiveness of Notices.
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Notices required to be given and other documents required to be
delivered pursuant to the terms hereof shall be deemed given or delivered
when actually received unless sent by facsimile transmission, In which case
such notice or other document shall be deemed given or delivered when sent
(as established by sender's facsimile transmission machine print-out or
similar mechanical record).
ASSIGNMENT EXECUTION FORM
This Assignment Execution Form incorporates by reference all of the
terms and conditions of the Assignment Agreement attached hereto and/or
delivered currently herewith. By executing this Assignment Execution Form
and pursuant to the terms of such Assignment Agreement, the Assignor sells
and assigns to the Assignee, and the Assignee purchases and assumes from
the Assignor, in each case without recourse, representation or warranty
(except as set forth in the Assignment Agreement), all of the Assignor's
right, title and interest in and to, and all of the Assignor's obligations
with respect to, the Assigned Share (as calculated herein), and the
Assignor is released from such obligations. The terms of the Assignment
Agreement need not be physically attached to this Assignment Execution
Form.
1. Financing Agreement:
Title: Financing Agreement
Date: September 16, 1993
Name of Company: Maxtor Corporation
Name of Agent: The CIT Group/Business Credit, Inc.
2. Name of Assignor: Finova Capital Corporation, successor in
interest to TriCon Capital Corporation
3. Name of Assignee: The CIT Group/Business Credit, Inc.
4. Contract Date (Date of delivery to Agent of Assignment Execution
Form
executed by Assignor and Assignee): October_11, 1995.
5. October , 1995: Agent's Confirmation of Receipt.
(The Agent must enter the date of delivery to it of this Assignment
Execution Form executed by Assignor and Assignee and AGENT MUST
INITIAL AND RETURN A COPY OF THIS FORM TO ASSIGNOR.)
6. Settlement Date: October _____, 1995.
7. Assigned Share: $ 15,000,000.00.
a. Total Financing
Agreement
Commitment for
All Lenders as
of Contract Date $ 50,000,000.00.
b. Assigned Share
(6 decimal places) 30.000000 %.
c. Amount of
Assigned Share
of Total
Commitments
(a x b = c) $ 15,000,000.00.
d. Total Loan
Agreement
Amounts
outstanding
for All
Lenders as of
Contract Date $ -0-
e. Outstanding
Amount of
Assigned Loans
(d x b = e) $ -0-
[SIGNATURE PAGE FOLLOWS]
Acknowledged The CIT Group/Business Credit, Inc.
as of October ___, 1995: NAME OF ASSIGNEE
THE CIT GROUP/BUSINESS By:
CREDIT, INC., as Agent Name:__________________________
Title:_________________________
Address for Notices:
By: The CIT Group/Business Credit, Inc.
Name: ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇
Title: ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Regional Manager
Telephone No: 213/▇▇▇-▇▇▇▇
Address for Notices: Fax No: 213/▇▇▇-▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Payment Instructions:
Attention: Regional Manager Chemical Bank, N.Y., N.Y.
ABA # ▇▇▇▇▇▇▇▇▇
Telephone No: 213/▇▇▇-▇▇▇▇ ▇/C # ▇▇▇▇▇▇▇▇▇
Fax No: 213/▇▇▇-▇▇▇▇ Ref: Maxtor Participation
Acknowledged Finova Capital Corporation, successor in
as of October , 1995: interest to TriCon Capital Corporation
NAME OF ASSIGNOR
Maxtor Corporation, By:
as Company Name:
Title:
Lending Office and Address for Notices
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Finova Capital Corporation
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇
Title: VP Finance & Treasurer ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
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Telephone No: 610/354.8462
Fax No: 610/354.8482
Address for Notices:
------------------- Payment Instructions:
Maxtor Corporation ---------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ To: Mellon Bank ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ABA # ▇▇▇▇▇▇▇▇▇
Attn: Chief Financial Officer Beneficiary: Finova Capital
Telephone No: 408/432.4459 Corporation
Fax No: 408/432.4480 Account # 199-2890
Reference: TriCon / CCS / Maxtor