Exhibit 10.4
SECOND AMENDMENT TO SECOND
AMENDED AND RESTATED LOAN AGREEMENT
This SECOND AMENDMENT TO SECOND
AMENDED AND RESTATED LOAN AGREEMENT (“Amendment”), by
and between HUTCHINSON TECHNOLOGY INCORPORATED, a Minnesota
corporation (“HTI”), HUTCHINSON TECHNOLOGY ASIA, INC.,
a Minnesota corporation (“Asia”; collectively HTI and
Asia shall be referred to as the “Borrower”), whose
address is 40 West Highland Park, Hutchinson, Minnesota 55350, and
BANK OF AMERICA N.A., as successor by merger to LASALLE BANK
NATIONAL ASSOCIATION, a national banking association, (the
“Bank”), whose address is 135 South LaSalle Street,
Chicago, Illinois 60603, dated as of November 5, 2008 and
effective as of September 26 2008.
R E C I T A
L S :
A. The Borrower and the Bank entered
into that certain Second Amended and Restated Loan Agreement dated
as of December 21, 2007 as amended by that certain Amendment
to Second Amended and Restated Loan Agreement dated as of
February 1, 2008 (as so amended, the “Loan
Agreement”), pursuant to which Loan Agreement the Bank has
made a Revolving Loan to the Borrower evidenced by that certain
Second Replacement Revolving Note dated as of December 21,
2007 in the maximum principal amount of Fifty Million and 00/100
Dollars ($50,000,000.00), executed by the Borrower and made payable
to the order of the Bank (the “Revolving
Note”).
B. At the present time the Borrower
requests, and the Bank is agreeable to amending the Loan Agreement
as provided herein, pursuant to the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of
the premises and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Borrower and the
Bank hereby agree as follows:
A G R E E M
E N T S :
1. RECITALS . The foregoing
Recitals are hereby made a part of this Amendment.
2. DEFINITIONS . Capitalized
words and phrases used herein without definition shall have the
respective meanings ascribed to such words and phrases in the Loan
Agreement.
3. AMENDMENTS TO THE LOAN
AGREEMENT .
3.1. Section 1.1 is hereby
amended to add the following defined terms in alphabetical
order:
“ ARS Lender ”
means Smith Barney Inc., USB Financial Services, Inc. and/or any
other Person providing a Permitted Auction Rate Securities
Loan.
“ Adjusted HTO Investment
Amount ” means if there is a Real Estate Financing,
$130,000,000 minus the Real Estate Financing Amount.
“ Collateral ”
shall have the meaning ascribed to it in the Security
Agreement.
“ HTO ” means
Hutchinson Technology Operations (Thailand) Co., LTD so long as HTI
owns 100% of the outstanding stock of HTO.
“ HTO Permitted
Investments ” means: (a) if there is no Real Estate
Financing, Investments in or to HTO provided that the aggregate
amount so invested or loan to HTO shall not exceed $130,000,000; or
(b) if there is a Real Estate Financing, Investments in or to
HTO provided that the aggregate amount so invested or loan to HTO
shall not exceed the Adjusted HTO Investment Amount.
“ Initial Loan
Documents ” shall have the meaning ascribed to it in
Section 3.1.
“ Investments ”
shall have the meaning ascribed to it in
Section 7.3.
“ Non-HTO Permitted
Investments ” means, at any time, Investments in or to
all Non-HTO Subsidiaries, in the aggregate, not to exceed
$10,000,000 at any time outstanding.
“ Non-HTO Subsidiaries
” means all of the Borrower’s Subsidiaries except
HTO.
“ Permitted Auction Rate
Securities ” means student loan backed auction rate
securities acquired by the Borrower prior to September 1, 2008
which had an aggregate acquisition cost of not greater than
$100,700,000.00.
Permitted Auction Rate Securities
Loans ” means loans
made by an ARS Lender to HTI: a) which will be secured solely by
those Permitted Auction Rate Securities that each such ARS Lender
holds for the account of Borrower as well as the proceeds
thereform; b) which will be in a principal amount not exceeding the
lesser of: (i) the market value of such pledged Permitted
Auction Rate Securities; or (ii) Borrower’s acquisition
cost of such pledged Permitted Auction Rate Securities; and
(c) with respect to which such ARS Lender shall have waived
all rights of setoff against any other assets of the Borrower or
amounts such ARS Lender owes to the Borrower which waiver shall be
made pursuant to an agreement satisfactory to Bank in its sole
discretion.
“ Permitted Subsidiary
Investments ” means HTO Permitted Investments and Non-HTO
Permitted Investments.
“ Prime ” shall
mean the floating per annum rate of interest which at any time, and
from time to time, shall be most recently announced by the Bank as
its “Prime Rate,” which is not intended to be the
Bank’s lowest or most favorable rate of interest at any one
time. The effective date of any change in the “Prime
Rate” shall for purposes hereof be the date the “Prime
Rate” is changed by the Bank. The Bank shall not be obligated
to give notice of any change in the “Prime
Rate.”
“ Real Estate Financing
” means a loan in a principal amount not to exceed the Real
Estate Financing Amount provided by a party other than the Bank,
the Borrower or any Affiliate of the Borrower to HTO for the
purpose of acquiring real property and building a factory in
Thailand.
“ Real Estate Financing
Amount ” means the principal amount of the Real Estate
Financing but not in excess of $25,000,000.
“ Reduction Date
” means the earlier to occur of: a) February 3, 2009; or
b) the first date in which the Borrower signs an agreement, note or
similar document with respect to a Permitted Auction Rate
Securities Loan.
“ Security Agreement
” means that certain Security Agreement dated
November 5, 2008 executed by the Borrower and delivered to the
Bank.
3.2. Section 1.1 is hereby
amended to amend and restate the following defined
terms:
“ LIBOR Rate ”
shall mean (A) for all LIBOR Loans, a per annum rate of
interest equal to LIBOR for the relevant Interest Period,
plus two percent (2.00%), which LIBOR Rate shall remain
fixed during such Interest Period; and (B) for all Alternate
Currency Loans, a per annum rate of interest equal to the Alternate
Currency Rate for the relevant Interest Period plus two
percent (2.00%), which Alternate Currency Rate shall remain fixed
during such Interest Period.
“ Loan Documents
” shall mean each of this Agreement, the Note, the Security
Agreement, the Initial Loan Documents and each and every other
agreement, document, instrument and certificate executed in
connection with the foregoing from time to time for the benefit of
the Bank in connection with the foregoing, and all amendments,
restatements, supplements and other modifications
thereto.
“ Maturity Date ”
shall mean December 1, 2009, unless extended by the Bank
pursuant to any modification, extension or renewal note executed by
the Borrower and accepted by the Bank in its sole and absolute
discretion in substitution for the Note.
“ Prime Rate ”
means a rate of interest equal to Prime plus two percent
(2.00%).
“ Revolving Loan
Commitment” means: a) for the period before the Reduction
Date, the sum of Fifty Million and 00/100 Dollars ($50,000,000.00);
and b) for the period commencing on the Reduction Date and
continuing thereafter, the sum of Twenty-Five Million and 00/100
Dollars ($25,000,000.00).
“ Senior Debt ”
means all Covenant Indebtedness, less all Subordinated Debt and
less all Permitted Auction Rate Securities Loans.
2
“ Unused Amount ”
means the Revolving Loan Commitment, less all outstanding
Revolving Loans and less the Letter of Credit
Obligations.
3.3. Section 2.5(a) is deleted
in its entirety and is replaced by the following:
(a) Unused Fee . The Borrower
agrees to pay to the Bank a fee in the amount one-half of one
percent (0.50%) per annum of the Unused Amount (“Unused
Fee”) which shall be determined daily and calculated based
upon a 360 day year. The Unused Fee shall be paid four times per
year, in arrears, on the last Business Day of each calendar
quarter
3.4. The Loan Agreement is amended
to add the following new Section 2.8 immediately following
Section 2.7:
2.8 Collateral . As security
for the Obligations, Borrower will grant to Bank a security
interest of first priority in the Collateral pursuant to the
Security Agreement. Borrower shall pay
