Document:

WDC-09/27/13-Exhibit 10.1

EXHIBIT 10.1

AMENDMENT NO. 1 TO CREDIT AGREEMENT

THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT dated as of August 23, 2013 (this “Amendment”), is made by and among WESTERN DIGITAL TECHNOLOGIES, INC., a Delaware corporation (the “US Borrower”), WESTERN DIGITAL IRELAND, LTD., an exempted company incorporated under the laws of the Cayman Islands (the “Cayman Borrower” and together with the US Borrower, the “Borrowers”), WESTERN DIGITAL CORPORATION, a Delaware corporation (“Holdings”), and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, on behalf of itself and the lenders from time to time party to the Credit Agreement (defined below) (collectively, the “Lenders” and individually, a “Lender”).

RECITALS:

A.The Borrowers, Holdings, the Lenders and the Administrative Agent have entered into a Credit Agreement dated as of March 8, 2012 (as amended hereby and as from time to time hereafter amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”).  Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

B.The Borrower has requested that the Administrative Agent agree, on behalf of the Lenders pursuant to the provisions of Section 11.01 of the Credit Agreement permitting amendments with respect to any “inconsistency, error or omission of a technical or immaterial nature” to be made by the Administrative Agent without separate consent of the Lenders, to amend certain provisions of the Credit Agreement as set forth below. 

C.Subject to the terms and conditions set forth below, the Administrative Agent is willing so to amend the Credit Agreement.

In furtherance of the foregoing, the parties agree as follows:    

Section 1.    AMENDMENTS.  Subject to the covenants, terms and conditions set forth herein and in reliance upon the representations and warranties set forth herein, the Credit Agreement is amended as follows:

(a)    A new definition of “Fiscal Quarter End Date” is hereby added to Section 1.01 of the Credit Agreement in proper alphabetical order to read in its entirety as follows:
    
“‘Fiscal Quarter End Date’ means the last day of each fiscal quarter of Holdings, which shall be September 27, 2013, December 27, 2013, March 28, 2014, June 27, 2014, October 3, 2014, January 2, 2015, April 3, 2015, July 3, 2015, October 2, 2015, January 1, 2016, April 1, 2016, July 1, 2016, September 30, 2016 and December 30, 2016, and such other later dates, if applicable, as may be communicated by Holdings to the Administrative Agent; provided that in each case if such day is not a Business Day, the Fiscal Quarter End Date shall be the immediately preceding Business Day.”

(b)    The definition of “Interest Payment Date” contained in Section 1.01 of the Credit Agreement is hereby amended by replacing the words “the last Business Day of each March, June, September and December” with the words “on each Fiscal Quarter End Date”.

(c)    Subsections (c) and (d) of Section 2.07 of the Credit Agreement are each hereby amended by replacing the words “the last Business Day of each March, June, September and December” in each such subsection with the words “each Fiscal Quarter End Date” in each such place.

(d)    Subsection (a) of Section 2.09 of the Credit Agreement is hereby amended by replacing the words “the last Business Day of each March, June, September and December” in such subsection with the words “each Fiscal Quarter End Date”.

The amendments to the Credit Agreement are limited to the extent specifically set forth above and no other terms, covenants or provisions of the Credit Agreement are intended to be affected hereby.

Section 2.    CONDITIONS PRECEDENT.  The parties hereto agree that the amendments set forth in Section 1 above shall be effective upon (a) the receipt by the Administrative Agent of a counterpart of this Amendment, duly executed and delivered by Holdings and each Borrower and (b) a fully-executed version of this Amendment having been made available to the Lenders for review for a period of at least ten Business Days without any objection thereto by the Required Lenders in writing, as provided in Section 11.01 of the Credit Agreement.

Section 3.    REPRESENTATIONS AND WARRANTIES.  

(a)    In order to induce the Administrative Agent, on behalf of the Lenders, to enter into this Amendment, Holdings and each Borrower represents and warrants to the Administrative Agent and the Lenders as follows:

(i)    The representations and warranties of the Borrowers and each other Loan Party contained in Article V of the Credit Agreement or any other Loan Document are true and correct in all material respects (or, with respect to representations and warranties modified by materiality standards, in all respects) on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (or, with respect to representations and warranties modified by materiality standards, in all respects) as of such earlier date, and except that for purposes of this Section 3(a)(i), the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (b) and (a), respectively, of Section 6.09 of the Credit Agreement.

(ii)    No Default or Event of Default has occurred and is continuing prior to the effectiveness of, or will exist after giving effect to, this Amendment.

(b)    In order to induce the Administrative Agent, on behalf of the Lenders, to enter into this Amendment, Holdings and each Borrower represents and warrants to the Administrative Agent and the Lenders that this Amendment has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, subject to (i) bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors and (ii) general principles of equity, regardless of whether applied in proceedings in equity or at law.

Section 4.    MISCELLANEOUS

(a)    Ratification and Confirmation of Loan Documents.  Each of Holdings and each Borrower hereby consents, acknowledges and agrees to the amendments set forth herein and hereby confirms and ratifies, on behalf of itself and its Subsidiaries that are Loan Parties,  in all respects the Loan Documents to which such Person or its Subsidiaries that are Loan Parties is a party (including without limitation, with respect to each Guarantor, the continuation of its payment and performance obligations under the applicable Guaranty upon and after the effectiveness of the amendments contemplated hereby).    

(b)    Headings.  Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

(c)    Governing Law; Waiver of Jury Trial.  This Amendment shall be governed by and construed in accordance with the laws of the State of New York, and shall be further subject to the provisions of Sections 11.14 and 11.15 of the Credit Agreement.

(d)    Counterparts.  This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original, and all of which when taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page of this Amendment by facsimile or electronic transmission (including .pdf file) shall be effective as delivery of a manually executed counterpart hereof.

(e)    Entire Agreement.  This Amendment shall constitute a Loan Document, and together with the other Loan Documents sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes any prior negotiations and agreements among the parties relating to such subject matter.  No promise, condition, representation or warranty, express or implied, not set forth in the Loan Documents shall bind any party hereto, and no such party has relied on any such promise, condition, representation or warranty.  Each of the parties hereto acknowledges that, except as otherwise expressly stated in the Loan Documents, no representations, warranties or commitments, express or implied, have been made by any party to the other.  None of the terms or conditions of this Amendment may be changed, modified, waived or canceled orally or otherwise except in a writing signed by the Administrative Agent for such purpose.

(f)    Enforceability.  Should any one or more of the provisions of this Amendment be determined to be illegal or unenforceable as to one or more of the parties hereto, all other provisions nevertheless shall remain effective and binding on the parties hereto.

(g)    Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of Holdings, each Borrower, each Guarantor, the Administrative Agent, each Lender, the L/C Issuer and their respective successors and assigns (subject to Section 11.01 of the Credit Agreement).

[Signature pages follow.]
The following parties have caused this Amendment No. 1 to Credit Agreement to be executed as of the date first written above.

WESTERN DIGITAL TECHNOLOGIES, INC., as the US Borrower and Guarantor

By:      /s/ Wolfgang Nickl            
Name:      Wolfgang Nickl
		
	Title:
	Executive Vice President and Chief Financial Officer

WESTERN DIGITAL IRELAND, LTD., as the Cayman Borrower 

By:      /s/ Wolfgang Nickl            
Name:      Wolfgang Nickl
Title:     Director and Chief Financial Officer
WESTERN DIGITAL CORPORATION, as Holdings and Guarantor

By:      /s/ Wolfgang Nickl            
Name:      Wolfgang Nickl
		
	Title: 
	Executive Vice President and Chief Financial Officer

BANK OF AMERICA, N.A., as
Administrative Agent

By:      /s/ Joan Mok                
Name:       Joan Mok                
Title:     Vice PresidentWDC-09/27/13-Exhibit 10.2

EXHIBIT 10.2
Western Digital Corporation
August 14 , 2013
	
	
	Hitachi, Ltd.
6-6 Marunouchi 1-chome
Chiyoda-ku, Tokyo 100-8280
Japan

Re:   Investor Designee Compensation

Gentlemen:

Reference is hereby made to the Investor Rights Agreement, dated as of March 8, 2012 (as amended, the “IRA”), among Western Digital Corporation (the “Company”) and Hitachi, Ltd. (the “Investor”), that was entered into pursuant to Section 8.7 of the Stock Purchase Agreement, dated as of March 7, 2011 (as amended), among the Company, Western Digital Ireland, Ltd., the Investor and Viviti Technologies Ltd.  Capitalized terms used but not otherwise defined herein have the meaning set forth in the IRA. 

In lieu of Section 2.04 of the IRA, which provides that “Investor Designees shall be entitled to the same retainer, equity compensation or other fees or compensation, including travel and expense reimbursement, paid to the non-employee directors of the Company for their services as a director,” the Company and the Investor hereby agree that, for each Investor Designee, the Investor or, in the case of an Investor Designee employed or otherwise retained by an Affiliate of the Investor, such Affiliate (“Designated Affiliate”) shall be entitled to the payments described below and that no payments shall be made to any Investor Designee for services as a director.  

		
	(a)
	Cash Retainer Amount:  For each Investor Designee, the Investor or its Designated Affiliate shall be entitled to a cash retainer payment, currently in the amount of $75,000, per year for his service as a director of the Company; provided that (i) for the service year ending on November 7, 2012 (the “First Service Year”), for each Investor Designee, the Investor or its Designated Affiliate shall be entitled to receive the pro rata portion of such amount based on the Investor Designee’s May 17, 2012 appointment date (the “Appointment Date”) and (ii) the amount of such cash retainer payment shall be adjusted from time to time so that it equals the amount of the cash retainer payment to which the non-employee directors of the Company are entitled.

The foregoing cash payments shall be paid by the Company in accordance with the terms and conditions of this letter agreement within thirty (30) days after the first day of each respective service year of the Investor Designees; provided that, the cash payments in respect of the service years ending on November 7, 2012 and November 13, 2013 shall be paid by the Company within thirty (30) days after the date hereof.

The Company shall promptly notify the Investor if there is any change after the date hereof in the amount of the cash retainer payment that the non-employee directors of the Company are entitled to receive for each year of service as a director of the Company.

		
	(b)
	RSU Grants:  For each Investor Designee, the Investor or its Designated Affiliate shall be entitled to receive a cash payment determined by reference to the grants of restricted stock units (“RSUs”) that the Investor Designee would otherwise have been granted for each year of service as a non-employee director of the Company under the Company’s Non-Employee Director RSU Program; provided that, for the First Service Year, for each Investor Designee, the Investor or its Designated Affiliate shall be entitled to receive a cash payment based on the pro rata portion of such RSUs based on the Appointment Date. 

A calculation shall be made by the Company within ten (10) days after the date on which the relevant RSUs would have vested had they actually been granted to each Investor Designee (the “Deemed Vesting Date”) to determine the cash value of such RSUs based on the price of the Company Stock on such Deemed Vesting Date and, for each 

Investor Designee, the Investor or its Designated Affiliate shall be entitled to a cash payment in the amount of such cash value.

The foregoing cash payments shall be paid by the Company in accordance with the terms and conditions of this letter agreement within thirty (30) days after the Deemed Vesting Date.

Promptly after completing such calculation, the Company shall provide the Investor with a copy of such calculation in reasonable detail (including the price of the Company Stock on the Deemed Vesting Date).

As an example, if 5,000 RSUs would have been granted to each non-employee director of the Company under the Company’s Non-Employee Director RSU Program, then the Investor Designees would have each received 5,000 RSUs.  If the price of the Company Stock on the Deemed Vesting Date was $30 per share, then the Investor or its Designated Affiliate would be entitled to a cash payment equal to $150,000 (5,000 x $30).

At the Appointment Date, the Company’s Non-Employee Director RSU Program provided for an RSU grant to each non-employee director of the Company for each year of service as a director of the Company equal in value to $125,000 with a three (3)-year vesting period, pro-rated if a director was appointed to the Board after the date of the Company’s annual shareholders meeting for any given year.  As of the November 2012 annual shareholders meeting, each non-employee director of the Company shall receive for each year of service as a director of the Company an RSU grant equal in value to $225,000 with a one-year vesting period.  The Company shall promptly notify the Investor if there is any change after the date hereof to the cash value or vesting period of the RSUs to be granted to non-employee directors of the Company under the Company's Non-Employee Director RSU Program.

The cash payment with respect to the RSUs that the Investor Designee would otherwise have been granted for each year of service as a non-employee director of the Company under the Company’s Non-Employee Director RSU Program shall be deemed to continue to vest if such Investor Designee (or his replacement) is replaced by the Investor with a new Investor Designee during the relevant RSU vesting period.

		
	(c)
	Stock Option Grants:  Under the Company’s Non-Employee Director Compensation Program, directors shall no longer be entitled to receive stock option grants as of the November 2012 annual meeting.  Previously, new non-employee directors of the Company received a stock option grant with the number of shares of the Company Stock subject to the stock option equal in value to $300,000 on the grant date using the Black-Scholes valuation of the stock price.  The grant vested over four (4) years, with 25% vesting after the first year and 6.25% vesting each quarter thereafter.

The fair market value of the Company Stock on May 16, 2012, the day before the Appointment Date (and the date the Company would have used to calculate the stock option grant had the Investor Designees each received a stock option grant on the Appointment Date) was $38.63.  The Black-Scholes fair value of the stock optionwas $16.2464, which would have resulted in each Investor Designee receiving 18,465 stock options.  Such stock options would have set an exercise  price on the Appointment Date at $37.07, the value of the stock price on such date.

In satisfaction of the stock option grant that each Investor Designee would have received on the Appointment Date, for each Investor Designee, the Investor or its Designated Affiliate shall be entitled to receive a cash payment in the amount of $150,000, which is one-half the target value of such stock option grant.

The foregoing cash payments shall be paid by the Company in accordance with the terms and conditions of this letter agreement within thirty (30) days after the date hereof.

The cash amounts referred to in clauses (a), (b) and (c) above shall be paid by the Company to the Investor or its Designated Affiliate without withholding for any Taxes or other similar charges, fees or amounts arising in connection with the transactions contemplated by this letter agreement, except to the extent the Company determines it is required by applicable Law to do so.    

For any given Investor Designee, the Investor shall notify the Company in writing whether it or one of its Affiliates shall be entitled to receive the cash amounts referred to in clauses (a), (b) and (c) above.  For the avoidance of doubt, the person entitled to receive the cash amounts referred to in clauses (a), (b) and (c) above does not need to be the same for all of the Investor Designees.

Further, for each Investor Designee, the Investor or its Designated Affiliate shall be entitled to the same other fees and compensation, including travel and expense reimbursement, paid to the non-employee directors of the Company for their 

services as a director.  The Investor may direct the Company to pay the amounts of such other fees and compensation to which the Investor or its Designated Affiliate is entitled to such person(s) as the Investor may designate in writing.  The Company may, to the extent it determines it is required by applicable Law to do so, withhold for any Taxes or other similar charges, fees or amounts applicable to such payments.

Each party shall cooperate and take such action as may be reasonably requested by the other party in order to carry out the provisions and purposes of this letter agreement and the transactions contemplated hereby.

This letter agreement shall (i) not be amended, modified or supplemented except by written agreement of the Company and the Investor and (ii) be governed by and construed in accordance with the Laws of the State of Delaware without giving effect to any Law or rule that would cause the Laws of any jurisdiction other than the State of Delaware to be applied.

Except to the extent specifically amended as set forth herein, the IRA shall not otherwise be amended or modified, and shall remain in full force and effect, binding in accordance with its terms.

Please confirm your agreement with the foregoing by executing this letter agreement and returning an executed copy of this letter agreement to us.  This letter agreement may be executed in counterparts.
Very truly yours,
WESTERN DIGITAL CORPORATION
By:          /s/ Michael C. Ray    
Name:                Michael C. Ray
Title:    SVP, General Counsel and Secretary
ACCEPTED AND AGREED as of
the date first written above:

HITACHI, LTD.
By:       /s/ Toyoki Furuta    
Name:      Toyoki Furuta
Title:       GM, Business Development Office

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