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EXHIBIT 10.23
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This Assignment and Acceptance Agreement (this "Agreement") is
entered into as of May 29, 1998, between Foothill Capital Corporation, a
California corporation in its capacity as a Lender (the "Assignor") and
Xxxxxxxxx, L.L.C., a New York limited liability company (the "Assignee"), and
acknowledged by Foothill Capital Corporation, a California corporation in its
capacity as Agent, with respect to that certain Loan and Security Agreement
described in Item 2 of Annex I annexed hereto (the "Loan Agreement").
Capitalized terms used herein and not otherwise defined herein have the meanings
ascribed to them in the Loan Agreement. The parties hereby agree as follows:
1. In accordance with the terms and conditions of Section 15 of
the Loan Agreement, the Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, that interest in
and to the Assignor's rights and obligations under the Loan Documents as of the
date hereof solely with respect to the Obligations owing to the Assignor as
specified in Item 4.b and Item 4.c of Annex I and the Commitments to make
Advances or the Bridge Term Loan as specified in Item 4.b and Item 4.c of Annex
I. After giving effect to such sale and assignment, the Assignee's total
Commitments and Commitment to make Advances or the Bridge Term Loan will be as
set forth in Item 4.b and Item 4.c of Annex I.
2. The Assignor: (a) represents and warrants to the Assignee
that: (i) the Assignor is the legal and beneficial owner of the interest being
assigned by the Assignor hereunder and that such interest is free and clear of
any lien or adverse claim; and (ii) the Assignor has provided to the Assignee or
representatives thereof with true and correct copies of the Loan Documents
required to be delivered by Borrower on or before the Closing Date and, as of
the Closing Date, such Loan Documents are the only material documents entered
into between the Assignor and Borrower with respect to the interest being
assigned hereunder; (b) makes no representation or warranty to the Assignee and
assumes no responsibility to the Assignee with respect to any statements,
warranties, or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency,
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; and (c) makes no representation or warranty to the Assignee
and assumes no responsibility to the Assignee with respect to the financial
condition of Borrower or the performance or observance by Borrower of any of
Borrower's obligations under the Loan Documents or any other instrument or
document furnished pursuant thereto.
3. The Assignee (a) confirms that it has received copies of the
Loan Agreement and the other Loan Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement; (b) agrees that it will, independently
and without reliance, as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the Loan
Documents; (c) appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers
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under the Loan Documents as are delegated to Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; and (d) agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a
Lender with respect to the interest being assigned hereunder.
4. Following the execution of this Agreement by the Assignor and
Assignee, it will be delivered to the Agent for recording by the Agent. The
effective date of this Assignment shall be the date of the execution hereof by
the Assignor, the Assignee, and the Agent (the "Settlement Date").
5. From and after the Settlement Date, (i) the Assignee shall be
a party to the Loan Agreement as a Lender, shall be a Lender for all purposes
under the Loan Agreement and the other Loan Documents, and, to the extent
provided in this Agreement, shall have the rights and obligations of a Lender
under the Loan Agreement and the other Loan Documents, and (ii) the Assignor
shall, to the extent provided in this Agreement, relinquish its rights and be
released from its obligations under the Loan Agreement and the other Loan
Documents.
6. From and after the Settlement Date, the Agent shall make all
payments under the Loan Agreement and the other Loan Documents in respect of the
interest assigned hereby (including, without limitation, all payments or
principal, interest and fees (if applicable) with respect thereto) to the
Assignee. Upon the Settlement Date, the Assignee shall pay to the Assignor the
Assigned Share (as set forth in Annex I) of the principal amount of any
outstanding Advances or the Bridge Term Loan (as the case may be) under the Loan
Agreement and the other Loan Documents.
7. Anything in the Loan Agreement or the other Loan Documents to
the contrary notwithstanding, Agent, the Assignor, and the Assignee, solely as
among themselves, hereby agree that for purposes of determining "ratability"
among the Lenders under the Loan Agreement and the other Loan Document: (a) when
used in the context of a Lender's obligation or commitment to make the Bridge
Term Loan or a Lender's right to receive payments in respect of the Bridge Term
Loan Obligations, the term "Pro Rata Share" shall mean (i) 100% with respect to
the Assignee, and (ii) -0-% with respect to the Assignor; (b) when used in the
context of a Lender's obligation or commitment to make Advances, including
Foothill Loans and Foothill Group Agent Advances, or a Lender's right to receive
payment in respect of Other Obligations, the term "Pro Rata Share" shall mean
(i) 100% with respect to the Assignor, and (ii) -0-% with respect to the
Assignee; (c) from and after the Closing Date, the then outstanding principal
amount of the Bridge Term Loan shall be deemed to be the amount of the total
Commitments in respect of the Bridge Term Loan; and (d) in all other cases, the
term "Pro Rata Share" shall have the meaning ascribed to that term in the Loan
Agreement.
8. Anything in the Loan Agreement or the other Loan Documents to
the contrary notwithstanding relative to the ratable apportionment among the
Lenders of payments of certain Obligations, the Assignor and Assignee, solely as
between themselves, hereby
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make, on the Settlement Date, the following adjustments relative to such
payments under the Loan Agreement and the other Loan Documents for periods on
and prior to the Settlement Date:
a. The Assignee shall be entitled to receive a share of the Assignor's
portion of the origination fee set forth in Section 2.11(a) of the Loan
Agreement, on the later to occur of the Settlement Date and the date
such portion of such fee is received by the Assignor, equal to $225,000.
9. Anything in the Loan Agreement or the other Loan Documents to
the contrary notwithstanding (including relative to the ratable apportionment
among the Lenders of payments of certain Obligations), Agent, the Assignor, and
the Assignee, solely as among themselves, hereby agree to make the following
adjustments relative to such payments under the Loan Agreement and the other
Loan Documents for periods from and after the Settlement Date:
a. The Assignee shall be entitled to receive:
i. until the payment in full of the Bridge Term Loan, a share
of the Assignor's portion of each installment of each
facility fee set forth in Section 2.11(c) of the Loan
Agreement, on the later to occur of the relevant due date
of such installment and the date such installment actually
is received by the Assignor, equal to the Assignee's Pro
Rata Share of such fee.
ii. until the payment in full of the Bridge Term Loan, a share
of the Assignor's portion of each interest payment payable
solely under Section 2.6(a) or Section 2.6(c), as the case
may be, of the Loan Agreement, as and when received by the
Assignor, equal to the Assignee's Pro Rata share of such
interest payment.
b. Upon payment in full of the Bridge Term Loan (and any other Bridge
Term Loan Obligations, including accrued and unpaid interest thereon),
the rights of Assignee to receive payment relative to any Obligations
(other than in respect of Borrower's indemnification provisions under
Section 11.3 of the Loan Agreement and in respect of the revival and
reinstatement of the Obligations under Section 18.7 of the Loan
Agreement) shall cease.
c. Anything in the Loan Agreement or the other Loan Documents to the
contrary notwithstanding:
i. the Assignee shall not be entitled to any compensation
based upon the Early Termination Premium, any clearance
charges or float, or any similar charges provided under
the Loan Documents.
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ii. the Assignee shall not share in any recovery by Agent or
the Assignor of audit or appraisal fees or out-of-pocket
expenses incurred by Agent or the Assignor and
reimbursable by Borrower (but this Section 9(c)(ii)
shall not limit the rights of the Assignee, as a Lender
and a member of the Lender Group, to recover out-of-pocket
expenses incurred by the Assignee and reimbursable by
Borrower).
iii. the Early Termination Premium shall not be paid to
Assignor until all other Obligations have been paid in
full.
10. Upon payment in full of the Bridge Term Loan (and any other
Bridge Term Loan Obligations, including accrued and unpaid interest thereon),
the duties, obligations, and status of the Assignee as a Lender (other than the
Assignee's indemnification and confidentiality obligations under the Loan
Agreement) shall cease.
11. So long as the Assignee and/or one or more of its Affiliates
holds 100% of the interest in the Bridge Term Loan, and notwithstanding anything
in the Loan Agreement or the other Loan Documents to the contrary, the Assignor
agrees that, without the prior written consent of the Assignee (which consent
shall not be unreasonably withheld, delayed, or conditioned), the Assignor shall
not (i) vote as a Lender in favor of making any change in the definitions of the
terms Borrowing Base, Eligible Accounts, Eligible Domestic Accounts, Eligible
Foreign Accounts, Dilution, or Dilution Reserve that would result in a material
increase in the Borrowing Base (or in any definition contained in the Loan
Agreement used in connection with the definition of the foregoing terms that
would result in a material increase in the Borrowing Base or any decrease in the
Cumulative Blockage), Maximum Revolving Amount, Cumulative Blockage, Individual
Blockage, Related Bridge Term Loan Reduction Amount, or Revolving Advance Cap,
(ii) amend, modify, or waive any provisions of Section 7.4(b) of the Loan
Agreement, approve the terms of any Purchaser Notes, or agree to waive any
mandatory prepayment pursuant to Section 7.4(b)(4)(i) of the Loan Agreement,
(iii) agree to any amendment, modification or waiver of the Intercreditor
Agreement, (iv) conduct any Stock Sale or, except as otherwise provided by
Section 7.4 of the Loan Agreement and the Intercreditor Agreement, consent to
any Stock Sale or (v) make any Advance that would cause the outstanding
Obligations to exceed the Total Obligations Cap.
12. So long as the Assignee and/or one or more of its Affiliates
holds 100% of the interest in the Bridge Term Loan, the Assignor (for itself and
all other Lenders that are successors to or assignees of the Assignor) hereby
agrees that, notwithstanding anything in the Loan Agreement or the other Loan
Documents to the contrary, Agent on behalf of the Required Lenders shall give
the Assignee written notice of any action by Agent on behalf of the Required
Lenders described in clause (a)(i) or clause (a)(iii) of Section 13 hereof: (a)
in the absence of an Exigent Circumstance (defined below), not less than 2
Business Days prior to the taking of such action; or (b) if Exigent
Circumstances exist, concurrently with or as promptly as reasonably practicable
after the taking of such action. In the event that any written notice is given
to the Assignee pursuant to clause (a) above (an "Acceleration/Liquidation
Notice"), the Assignor (for itself and all other Lenders that are
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successors to or assignees of the Assignor) hereby agrees solely for the benefit
of the Assignee that, notwithstanding anything in the Loan Agreement or the
other Loan Documents to the contrary, the Lender Group will forbear from
accelerating the maturity of the Obligations or from declaring Borrower's loan
account to be in liquidation, as the case may be, if Agent on behalf of the
Lender Group receives, on or before the second Business Day following the date
the Acceleration/Liquidation Notice is given, a written notice from the Assignee
(the "Committed Buy-out Notice") pursuant to which the Assignee irrevocably
commits to acquire all (but not less than all) of all remaining right, title,
and interest of the Assignor and all other Lenders that are successors to or
assignees of the Assignor in and to the Obligations, the Commitments, and the
Loan Documents pursuant to Section 13 hereof. In any written notice given to the
Assignee pursuant to clause (b) above, Agent on behalf of the Required Lenders
shall specify in reasonable detail the nature and circumstances of such Exigent
Circumstance. As used herein, "Exigent Circumstance" shall mean an event or
circumstance that materially and imminently threatens the ability of the Lender
Group to realize upon all or a material part of the Collateral, such as, without
limitation, fraudulent removal, concealment, or abscondment thereof, destruction
(other than to the extent covered by insurance) or material waste thereof, or
failure of Borrower after reasonable demand to maintain or reinstate adequate
casualty insurance coverage with respect thereto. In the event that the Assignee
elects to acquire all (but not less than all) of all remaining right, title, and
interest of the Assignor and all other Lenders that are successors to or
assignees of the Assignor in and to the Obligations, the Commitments, and the
Loan Documents pursuant to Sections 13 or 14 hereof, (i) Agent shall have the
right, but not the obligation, to resign under Section 17.9 of the Loan
Agreement, and (ii) and the Assignee shall have the right, but not the
obligation, to require the Agent to resign under Section 17.9 of the Loan
Agreement; in each case, effective immediately upon the receipt by the Assignor
and Agent of written notice by the Assignee of the exercise by the Assignee of
such right to acquire such remaining right, title, and interest in and to the
Obligations, the Commitments, and the Loan Documents (and, if applicable, such
right to require Agent to resign).
13. So long as the Assignee and/or one or more of its Affiliates
holds 100% of the interest in the Bridge Term Loan, the Assignee and the
Assignor (for itself and all other Lenders that are successors to or assignees
of the Assignor) hereby agree that:
(a) at any time on or after the earlier of the date that any one or more
of the following events (each, a "Triggering Event") has occurred and is
continuing: (i) Agent on behalf of the Required Lenders shall have
accelerated the maturity of the Obligations based on an Event of Default
under the Loan Documents; (ii) any of the Obligations owing to the
Assignee shall not be paid in full when due and owing; or (iii) Agent on
behalf of the Required Lenders shall have otherwise declared Borrower's
loan account to be in liquidation in accordance with the Loan Documents;
the Assignee shall have the option, upon 5 Business Days advance written
notice to the Assignor (and all other Lenders that are successors to or
assignees of the Assignor), to acquire from the Assignor (and all other
Lenders that are successors to or assignees of the Assignor) all (but
not less than all) of the remaining right, title, and interest of the
Assignor (and all other
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Lenders that are successors to or assignees of the Assignor) in and to
the Obligations, the Commitments, and the Loan Documents; and
(b) upon the receipt by the Agent on behalf of the Lender Group of the
Committed Buy-out Notice, the Assignee irrevocably shall be committed to
acquire, within 5 Business Days following such receipt, from the
Assignor (and all other Lenders that are successors to or assignees of
the Assignor) all (but not less than all) of the remaining right, title,
and interest of the Assignor (and all other Lenders that are successors
to or assignees of the Assignor) in and to the Obligations, the
Commitments, and the Loan Documents;
in either case, by paying to the Assignor (and all other Lenders that are
successors to or assignees of the Assignor) in cash a purchase price equal to:
(y) 100% of the outstanding balance with respect thereto (including, without
limitation, principal, interest accrued and unpaid thereon, any unpaid fees and
premiums to the extent earned or due and payable in accordance with the Loan
Agreement (including, annual facility fees, anniversary fees, and collateral
management fees), expenses to the extent earned or due and payable in accordance
with the Loan Agreement (including the reimbursement of extraordinary expenses,
financial examination expenses, and loan documentation review charges); plus (z)
in the case of clause (a) above and in the event that there is a Triggering
Event as the result of the failure of Borrower to pay the Bridge Term Loan in
full on or after the scheduled maturity date thereof, an amount equal to the
Early Termination Premium (if and only if the Early Termination Premium is paid
by Borrower and if all Obligations were repaid in full and the Loan Agreement
was terminated as of the date payment of the purchase price is due); whereupon
the Assignor (and all other Lenders that are successors to or assignees of the
Assignor) shall assign to the Assignee, without any representation, recourse, or
warranty whatsoever (except that the Assignor (and all other Lenders that are
successors to or assignees of the Assignor) shall warrant to the Assignee that
(1) the amount quoted by the Assignor (and all other Lenders that are successors
to or assignees of the Assignor) as the purchase price represents the amount
shown as due with respect to the claims transferred as reflected on the
respective books and records of the Assignor (and all other Lenders that are
successors to or assignees of the Assignor), (2) it owns, or has the right to
transfer to the Assignee, the rights being transferred, and (3) such transfer
will be free and clear of liens and adverse claims), its right, title, and
interest with respect to the Obligations, the Commitments, and the Loan
Documents, at no expense to the Assignee other than the reimbursement by the
Assignee of the reasonable out-of-pocket expenses of the Assignor (and all other
Lenders that are successors to or assignees of the Assignor) and the legal
counsel thereof in connection with documenting and effecting such assignment and
the related delivery to the Assignee of the original Loan Documents in the
possession of the Assignor (and all other Lenders that are successors to or
assignees of the Assignor), and, in connection with such assignment, the
Assignor (and all other Lenders that are successors to or assignees of the
Assignor) shall deliver to the Assignee any original Loan Documents and any
Collateral in their possession and execute such other documents, instruments,
and agreements reasonably necessary to effect such assignment, whereupon the
Assignor (and all other Lenders that are successors to or assignees of the
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Assignor) shall be relieved from any further duties, obligations, or liabilities
to the Assignee pursuant to this Agreement.
14. So long as the Assignee and/or one or more of its Affiliates
holds 100% of the interest in the Bridge Term Loan, the Assignor (for itself and
all other Lenders that are successors to or assignees of the Assignor) hereby
agrees that, if Borrower's Loan Account is in liquidation, and if all of the
Obligations of Borrower payable to the Assignor (and all other Lenders that are
successors to or assignees of the Assignor) have been paid in full in cash as
more particularly provided in Section 2.4(b) of the Loan Agreement, the
Assignor (together with all other Lenders that are successors to or assignees of
the Assignor) may, or the Assignee may require the Assignor (and all other
Lenders that are successors to or assignees of the Assignor) to, assign to the
Assignee, without any representation, recourse, or warranty whatsoever (except
that the Assignor (and all other Lenders that are successors to or assignees of
the Assignor) shall warrant to the Assignee that (y) it owns, or has the right
to transfer to the Assignee, the rights being transferred, and (z) such transfer
will be free and clear of liens and adverse claims), its right, title, and
interest with respect to the Obligations, the Commitments, and the Loan
Documents, at no expense to the Assignee other than the reimbursement by the
Assignee of the reasonable out-of-pocket expenses of the Assignor (and all other
Lenders that are successors to or assignees of the Assignor) and the legal
counsel thereof in connection with documenting and effecting such assignment and
the related delivery to the Assignee of the original Loan Documents in the
possession of the Assignor (and all other Lenders that are successors to or
assignees of the Assignor), and, in connection with such assignment, the
Assignor (and all other Lenders that are successors to or assignees of the
Assignor) shall deliver to the Assignee any original Loan Documents and any
Collateral in their possession and execute such other documents, instruments,
and agreements reasonably necessary to effect such assignment, whereupon the
Assignor (and all other Lenders that are successors to or assignees of the
Assignor) shall be relieved from any further duties, obligations, or liabilities
to the Assignee pursuant to this Agreement.
15. So long as the Assignee and/or one or more of its Affiliates
holds 100% of the interest in the Bridge Term Loan, the Assignor (for itself and
all other Lenders that are successors to or assignees of the Assignor) hereby
agrees that, notwithstanding anything in Section 15.1 of the Loan Agreement to
the contrary, the Assignor (or any such other Lender) may further participate or
otherwise transfer or assign any or all of its right, interest, and title in and
to the Obligations, the Commitments, or the Loan Documents to any third person
at any time (in any such case a "Sale"); provided, however, that (a) before
making any such Sale, the Assignor (or any such other Lender) shall offer the
Assignee a right of first refusal itself to purchase the portion of its interest
so offered for Sale, and (b) any such Sales shall be made subject to the
Assignee's rights to acquire such portion of the right, title, and interest of
the Assignor (or any such other Lender) in and to the Obligations, the
Commitments, and the Loan Documents pursuant to Sections 13 or 14 hereof. In the
event that the Assignor (or any such other Lender) offers any such right of
first refusal to the Assignee, the Assignee promptly shall accept or reject such
right of first refusal, and, if accepted, promptly shall close the purchase of
the portion of the right, title, and interest of the Assignor (or any such other
Lender) so offered to the Assignee, and in any event within 5 Business Days of
the written
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offer thereof by the Assignor (or any such other Lender) to the Assignee,
failing which the Assignor (or any such other Lender) shall be free to
consummate such Sale to any such third person without restriction other than as
set forth in clause (b) above. Anything in the foregoing to the contrary
notwithstanding, the Assignor (and all such other Lenders) may sell, pledge,
transfer, or assign additional participation interests in the Obligations, the
Commitments, and the Loan Documents without any of the foregoing restrictions
(except, in the case of (z) below, the restriction granting the Assignee the
foregoing right of first refusal) in connection with (y) transfers or
assignments of its interest to any Affiliate of the Assignor or in connection
with a transfer or assignment of all or a substantial part of its loan
portfolio, or (z) any assignment to a collection or similar agency.
16. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties, including all other
Lenders that are successors to or assignees of the Assignor and including all
successor Agents.
18. In the event of any actual, irreconcilable conflict between
the Loan Agreement and this Agreement relative to the subject matter hereof, the
terms and provisions of this Agreement shall control and govern.
19. This Agreement can only be amended by a writing signed by
Agent, the Assignee, and the Assignor (and all other Lenders that are successors
to or assignees of the Assignor).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
first date above written, such execution being made on Annex I hereto.
FOOTHILL CAPITAL CORPORATION, as
Assignor
By: /s/
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Title:
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XXXXXXXXX, L.L.C., as Assignee
By: /s/
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Title:
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ACCEPTED AS OF
May 29, 1998
FOOTHILL CAPITAL CORPORATION,
AS AGENT
By: /s/
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Title:
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ANNEX I
To That Certain Assignment and Acceptance Agreement
entered into as of May 29, 1998,
between Foothill Capital Corporation, in its capacity as a Lender
and Xxxxxxxxx, L.L.C.
1. Borrower: StorMedia Incorporated, Akashic Memories Corporation and
certain subsidiaries as guarantors)
2. Name and Date of Loan Agreement:
Loan and Security Agreement, dated as of May 29, 1998, among
StorMedia Incorporated, Akashic Memories Corporation, the
financial institutions listed on the signature pages thereof, and
Foothill Capital Corporation, as Agent.
3. Date of Agreement: as of May 29, 1998
4. Amounts (as of date in Item #3 above):
a. Total Commitments $28,000,000
i. Commitment to make Advances $20,000,000
ii. Commitment to make the Bridge Term Loan $8,000,000
b. Assigned Share of Total Commitments 28.5714%
i. Assigned Share of Commitment -0-%
to make Advances
ii. Assigned Share of Commitment 100.00%
to make the Bridge Term Loan
c. Amount of Assigned Share of Total Commitments $8,000,000
i. Amount of Assigned Share of $-0-
Commitment to make Advances
ii. Amount of Assigned Share of $8,000,000
Commitment to make the Bridge Term Loan
5. Settlement Date: May 29, 1998
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6. Notice and Wire Instructions, etc.
Assignee:
Xxxxxxxxx, L.L.C.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxx
(000) 000-0000
Bank:
Citibank, NA
ABA No.:000-000-000
Account Name: Cerberus Partners, L.P.
Account No.:00000000
Attn: Xxxxxxx Xxxxxx
Re: StorMedia Incorporated
7. Agreed and Accepted:
FOOTHILL CAPITAL
CORPORATION, in its capacity as
a Lender, as Assignor
By: /s/
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Title:
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XXXXXXXXX, L.L.C., as Assignee
By: /s/
---------------------------------
Title:
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Accepted:
FOOTHILL CAPITAL CORPORATION, AS AGENT
By: /s/
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Title:
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