1
EXHIBIT 10.39
DATED 27 December, 1995
AGREEMENT
for a
(Yen)25,000,000,000
Floating Rate Guaranteed Credit Facility
to
LSI LOGIC JAPAN SEMICONDUCTOR, INC.
Guaranteed by
LSI LOGIC CORPORATION
Arranged by
ABN AMRO BANK N.V.
Agent
ABN AMRO BANK N.V., TOKYO BRANCH
Co-Agent
THE INDUSTRIAL BANK OF JAPAN, LIMITED
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CONTENTS
Clause Heading Page
1. PURPOSE AND DEFINITIONS................................................................................ 1
1.1 Purpose....................................................................................... 1
1.2 Definitions................................................................................... 2
1.3 Guaranty Terms................................................................................ 8
1.4 Headings...................................................................................... 9
1.5 Construction of certain terms................................................................. 9
1.6 Majority Banks............................................................................... 11
2. THE FACILITY.......................................................................................... 11
2.1 Amount....................................................................................... 11
2.2 Obligations several.......................................................................... 11
2.3 Interests several............................................................................ 12
3. CONDITIONS............................................................................................ 12
3.1 Documents and evidence....................................................................... 12
3.2 General conditions precedent................................................................. 12
3.3 Waiver of conditions precedent............................................................... 14
3.4 Further conditions precedent................................................................. 14
4. ADVANCES.............................................................................................. 14
4.1 Drawdown..................................................................................... 14
4.2 Amount....................................................................................... 15
4.3 Maturity..................................................................................... 15
4.4 Notification to Banks........................................................................ 15
4.5 The Expiration Date.......................................................................... 16
4.6 Extension of Expiration Date................................................................. 16
4.7 Application of proceeds...................................................................... 17
5. INTEREST RATES AND INTEREST PERIODS................................................................... 17
5.1 Usual interest rate.......................................................................... 17
5.2 Default interest............................................................................. 17
5.3 Margin....................................................................................... 18
5.4 Reference Bank quotations.................................................................... 19
5.5 Selection of Interest Rate and Interest Periods.............................................. 20
5.6 Determination of Interest Periods............................................................ 21
5.7 Notification of Interest Periods and interest rate........................................... 22
5.8 Market disruption; non-availability.......................................................... 22
i.
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Clause Heading Page
6. REPAYMENT, PREPAYMENT AND CANCELLATION................................................................ 23
6.1 Repayment.................................................................................... 23
6.2 Voluntary prepayment......................................................................... 24
6.3 Additional voluntary prepayment.............................................................. 24
6.4 Timing, amounts and application of prepayments............................................... 24
6.5 Notice and effect of prepayment.............................................................. 25
6.6 Cancellation of Commitments.................................................................. 25
6.7 Collateralization............................................................................ 25
7. FEES AND EXPENSES..................................................................................... 27
7.1 Fees......................................................................................... 27
7.2 Expenses..................................................................................... 28
7.3 Consumption, etc. tax........................................................................ 29
7.4 Stamp and other duties....................................................................... 29
8. PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS......................................................... 30
8.1 No set-off or counterclaim; distribution to the Banks........................................ 30
8.2 Payments by the Banks........................................................................ 30
8.3 Netting of Payments.......................................................................... 31
8.4 Agent may assume receipt..................................................................... 31
8.5 Time of payment.............................................................................. 32
8.6 Non-Banking Days............................................................................. 32
8.7 Calculations................................................................................. 32
8.8 Certificates conclusive...................................................................... 33
8.9 Grossing-up for Taxes........................................................................ 33
8.10 Bank accounts................................................................................ 34
8.11 Partial payments............................................................................. 34
8.12 Variation of application..................................................................... 35
9. REPRESENTATIONS AND WARRANTIES........................................................................ 36
9.1 Representations and Warranties............................................................... 36
9.2 Representations and Warranties incorporated by reference..................................... 39
9.3 Repetition................................................................................... 39
10. UNDERTAKINGS.......................................................................................... 39
10.1 Undertakings................................................................................. 39
10.2 Pledges...................................................................................... 41
11. EVENTS OF DEFAULT..................................................................................... 42
11.1 Events of Default............................................................................ 42
11.2 Acceleration................................................................................. 44
ii.
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Clause Heading Page
11.3 Demand basis................................................................................. 45
12. INDEMNITIES........................................................................................... 45
12.1 Broken funding and other indemnities......................................................... 45
12.2 Currency indemnity........................................................................... 46
13. UNLAWFULNESS AND INCREASED COSTS...................................................................... 47
13.1 Unlawfulness................................................................................. 47
13.2 Increased costs.............................................................................. 47
14. SET-OFF AND PRO RATA PAYMENTS......................................................................... 48
14.1 Set-off...................................................................................... 48
14.2 Pro rata payments............................................................................ 49
15. ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES.......................................................... 50
15.1 Benefit and burden........................................................................... 50
15.2 No assignment by Borrower.................................................................... 51
15.3 Participation................................................................................ 51
15.4 Substitution................................................................................. 51
15.5 Reliance on Substitution Certificate......................................................... 52
15.6 Authorisation of Agent....................................................................... 53
15.7 Construction of certain references........................................................... 53
15.8 Lending offices.............................................................................. 53
15.9 Disclosure of information; Confidentiality................................................... 54
16. ARRANGER, AGENT AND REFERENCE BANKS................................................................... 55
16.1 Appointment of Agent......................................................................... 55
16.2 Amendments; Waivers.......................................................................... 55
16.3 Rights of Agent as Bank; No partnership...................................................... 56
16.4 No liability of Arranger and Agent........................................................... 56
16.5 Agent's duty to notify and take action....................................................... 58
16.6 Identity of Banks............................................................................ 58
16.7 Non-reliance on Arranger or Agent............................................................ 58
16.8 No Responsibility on Arranger or Agent for Borrower's performance............................ 59
16.9 Other dealings............................................................................... 59
16.10 Reimbursement and indemnity by Banks......................................................... 60
16.11 Retirement of Agent.......................................................................... 60
16.12 Change of Reference Banks.................................................................... 61
16.13 Variation of Exhibits........................................................................ 61
17. NOTICES AND OTHER MATTERS............................................................................. 62
iii.
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Clause Heading Page
17.1 Notices...................................................................................... 62
17.2 Notices through the Agent.................................................................... 62
17.3 No implied waivers, remedies cumulative...................................................... 63
17.4 English language............................................................................. 63
18. GOVERNING LAW AND JURISDICTION........................................................................ 63
18.1 Governing Law................................................................................ 63
18.2 Jurisdiction................................................................................. 64
iv.
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Schedules
1 The Parties and the Commitments
2 Documents and evidence required as conditions precedent
Exhibits
1 Form of Drawdown Notice
2 Form of Guaranty
3 Form of Account Pledge
4 Form of Substitution Certificate
5 Form of Margin Certificate
6 Form of Confirmation of Repayment Schedule
v.
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THIS AGREEMENT is dated 27 December, 1995 and made BETWEEN:
LSI LOGIC JAPAN SEMICONDUCTOR, INC., as Borrower;
ABN AMRO BANK N.V., as Arranger;
THE BANKS AND FINANCIAL INSTITUTIONS details of which are set out in
Schedule 1;
ABN AMRO BANK N.V., TOKYO BRANCH, as Agent, and
THE INDUSTRIAL BANK OF JAPAN, LIMITED, as Co-Agent.
IT IS AGREED as follows:
1. PURPOSE AND DEFINITIONS
1.1 Purpose
This Agreement sets out the terms and conditions on and subject to
which the Banks agree, according to their several obligations, to make
available to the Borrower a credit facility of up to
(Yen)25,000,000,000 (twenty five billion yen) to be used:
(a) for the purpose of refinancing part of the Borrower's current
long term debt;
(b) for the purpose of partly financing expansion of the
Borrower's production facilities; and
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(c) for general corporate purposes.
1.2 Definitions
In this Agreement, unless the context otherwise requires:
"Account Pledge" means an account pledge agreement substantially in the
form of Exhibit 3 executed by the Borrower in favour of, and
acknowledged by, each Bank;
"Advance" means each borrowing of all or a portion of the Commitments
by the Borrower or (as the context may require) the principal amount of
such borrowing for the time being outstanding;
"Agent" means ABN AMRO Bank N.V., Tokyo Branch (details of which are
set out in Schedule 1) or such other Person as may be appointed agent
for the Banks pursuant to Clause 16.11;
"Arranger" means ABN AMRO Bank N.V.;
"Availability Period" means the period from the Closing Date and ending
on (but including) the Expiration Date or ending on (but excluding)
such earlier date (if any) (i) on which the Borrower cancels the whole
of the undrawn Commitments under Clause 6.6 or (ii) on which the
Commitments of all the Banks are reduced to zero pursuant to Clause
6.3, 11.2 or 13.1;
"Available Facility Amount" means, at any time, the amount by which the
total of the Commitments of all the Banks at such time exceeds the Loan
outstanding at such time;
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"Banking Day" means a day (other than Saturday or Sunday) on which
banks are open for business in Tokyo;
"Banks" means the banks and financial institutions listed in Schedule 1
and includes their successors in title and Substitutes;
"Borrower" means LSI Logic Japan Semiconductor, Inc. (details of which
are set out in Schedule 1);
"Borrower's Account" means the account of the Borrower maintained at
ABN AMRO Bank N.V., Tokyo Branch, bearing the number 00-00-000, or such
other account as the Borrower from time to time shall designate in a
written notice to the Agent for the deposit of funds borrowed under
this Agreement.
"Closing Date" means the date, not more than five Banking Days nor less
than three Banking Days before the Drawdown Date in respect of the
first Advance, on which all of the certificates and other documents
specified in A(a), A(b), A(c), A(d), A(e), A(f), B(a), B(b), B(c),
B(d), B(e), B(f) and B(h) of Schedule 2 shall have been delivered to
the Agent or its duly authorised representative;
"Collateral" has the meaning given to it in Clause 6.7;
"Collateral Agreement" has the meaning given to it in Clause 6.7;
"Collateralized Amount" means the amount of each Bank's Contribution
equal to the Collateral held by that Bank in accordance with Clause
6.7;
3.
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"Commitment" means, in relation to a Bank, the amount set opposite its
name in Schedule 1 or, as the case may be, in any relevant Substitution
Certificate, as reduced by any relevant term of this Agreement;
"Contribution" means, in relation to a Bank, the principal amount of
the Advances owing to such Bank at any relevant time;
"Debt Rating" means, as of any Margin Determination Date, the
Guarantor's unsecured senior debt rating from Standard & Poors Rating
Group, a division of McGraw Hill, Inc.;
"Default" means any Event of Default or any event or circumstance which
would, on the giving of a notice by the Agent and/or the expiry of the
relevant period and/or the fulfillment of any other condition (in each
case as specified in Clause 11.1), constitute an Event of Default;
"Drawdown" means the payment of an Advance to the Borrower by the
Agent;
"Drawdown Closing Date" means, in respect of an Advance, the date being
the second Banking Day prior to the proposed Drawdown Date for that
Advance;
"Drawdown Date" mean the date of a Drawdown;
"Drawdown Notice" means a notice substantially in the terms of Exhibit
1;
"Event of Default" means any of the events or circumstances described
in Clause 11.1;
"Expiration Date" means 24 December, 1996, or, if extended pursuant to
Clause 4.6, 24 December, 1997;
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"Facility" means the credit facility granted by the Banks to the
Borrower pursuant to this Agreement;
"Final Maturity Date" means the fifth anniversary of the Closing Date;
"Guaranty" means a guaranty in the form of Exhibit 2, to be given by
the Guarantor;
"Guarantor" means LSI Logic Corporation, a Delaware corporation, whose
current address is at 0000 XxXxxxxx Xxxx, XX X-000, Xxxxxxxx XX 00000,
U.S.A.;
"Interest Payment Date" means a date specified for the payment of
interest pursuant to Clause 5.1;
"Interest Period" means the period determined in accordance with Clause
5.5 and Clause 5.6.
"LIBOR" means, in relation to a particular period, the rate at which
deposits of Yen are offered for a period equivalent to (or most
comparable to) that period at or about 11 a.m. (London time) on the
second LIBOR Banking Day before the first day of that period as
displayed on Telerate page 3750 (or any successor publication) provided
that if on that date no such rate is so displayed, LIBOR for that
period shall be the arithmetic mean (rounded upward if necessary to
five decimal places of one percent) of the rates respectively quoted to
the Agent by each of the Reference Banks at the request of the Agent as
such Reference Bank's offered rate for deposits of the relevant
currency in an amount approximately equal to the amount in relation to
which LIBOR is to be determined for a period equivalent to (or most
comparable to) such period to prime banks in the London Interbank
Market at or about 11 a.m. (London time ) on the second LIBOR Banking
Day before the first day of such period;
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"LIBOR Banking Day" means a Banking Day on which dealings in Yen
deposits are carried on in the London Interbank Market;
"LIBOR Loan" means an Advance or, as the case may be, the Loan, during
any period when interest thereon is determined by reference to LIBOR;
"Loan" means the aggregate of the Advances at any relevant time or, if
there is only one Advance, that Advance;
"Majority Banks" means Banks the aggregate of whose Contributions at
any relevant time equals or exceeds 66 2/3 per cent of the Advances or,
if no Advance has been made, the aggregate of whose Commitments equals
or exceeds 66 2/3 per cent of the total of the Commitments of all the
Banks;
"Margin" means a percentage per annum calculated in accordance with
Clause 5.3;
"Margin Certificate" means a certificate in the form of Exhibit 5;
"Margin Determination Date" means the 55th day following the end of any
fiscal quarter of the Guarantor;
"Margin Period" means, in respect of any Margin Determination Date, the
four consecutive fiscal quarters of the Guarantor immediately preceding
such Margin Determination Date;
"month" in respect of any Interest Period for a TIBOR Loan or a LIBOR
Loan means a period beginning in one calendar month and ending in the
next calendar month on the day numerically corresponding to the day of
the calendar month on which it started, provided
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that (i) if the period started on the last Banking Day (in the case of
a TIBOR Loan) or the last LIBOR Banking Day (in the case of a LIBOR
Loan) in a calendar month or if there is no such numerically
corresponding day, it shall end on the last Banking Day (in the case of
a TIBOR Loan) or the last LIBOR Banking Day (in the case of a LIBOR
Loan) in the next calendar month and (ii) if the numerically
corresponding day is not a Banking Day (in the case of a TIBOR Loan) or
a LIBOR Banking Day (in the case of a LIBOR Loan), the period shall end
on the next following Banking Day (in the case of a TIBOR Loan) or the
next following LIBOR Banking Day (in the case of a LIBOR Loan) in the
same calendar month but if there is no such Banking Day (in the case of
a TIBOR Loan) or LIBOR Banking Day (in the case of a LIBOR Loan) it
shall end on the preceding Banking Day (in the case of a TIBOR Loan) or
the preceding LIBOR Banking Day (in the case of a LIBOR Loan), and
"months" and "monthly" shall be construed accordingly;
"Pledged Account" means an account of the Borrower with a Bank the
subject of an Account Pledge;
"Ratio" as of any Margin Determination Date means the ratio of
Consolidated EBIT in respect of the relevant Margin Period to Total
Debt as of the last day of such Margin Period;
"Reference Banks" means the Head Office of The Industrial Bank of
Japan, Limited and the principal London office of Barclays Bank PLC
and/or any other bank appointed as such pursuant to Clause 16.12;
"Repayment Date" means, in respect of the Loan, each of the eight dates
for repayment of the Loan as determined in accordance with Clause 6.1;
"Substitute" has the meaning given to it in Clause 15.5;
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"Substitution Certificate" means a certificate substantially in the
form of Exhibit 4;
"TIBOR" in relation to any period means (i) the average rate at which
deposits in Yen are offered to all banks for that period (or a period
most comparable to that period) calculated in accordance with Xxxxxx
Screen TIBM page or, if that page is no longer published, its successor
or equivalent in respect of a deposit for that period (or a period most
comparable to that period) at or about 11:00 a.m. on the date falling
two Banking Days prior to the first day of that period, or (ii) if no
such rate is quoted, the rate which a major Japanese city bank selected
by the Agent in its discretion was offering deposits to prime banks in
the Tokyo Interbank market for that period (or a period most comparable
to that period) at or about 11:00 a.m. on the date falling two Banking
Days prior to the first day of that period;
"TIBOR Loan" means an Advance or, as the case may be, the Loan, during
any period when interest thereon is determined by reference to TIBOR;
"Total Debt" means the aggregate of Senior Debt and Subordinated Debt;
"written" or "in writing" means any method of representing or
reproducing words or characters in permanent visible form; and
"Yen" or "(yen)" means the lawful currency for the time being of Japan
and, in respect of all payments to be made under this Agreement, means
immediately available, freely transferable, cleared funds.
8.
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1.3 Guaranty Terms
Unless the context requires otherwise, terms defined in the Guaranty
shall have the same meanings when used in this Agreement.
1.4 Headings
Clause headings and the table of contents are inserted for convenience
of reference only and shall be ignored in the interpretation of this
Agreement.
1.5 Construction of certain terms
In this Agreement, unless the context otherwise requires:
(a) references to clauses, schedules and exhibits are to be
construed as references to the clauses of, and schedules and
exhibits to, this Agreement and references to this Agreement
include its schedules which form an integral part of this
Agreement;
(b) references to a "regulation" include any present or future
regulation, rule, directive, requirement, request or guideline
(whether or not having the force of law) of any agency,
authority, central bank or government department or any
self-regulatory or other national or supra-national authority;
(c) words importing the plural shall include the singular and vice
versa and words importing a gender shall include every gender;
(d) references to a time of day are to Tokyo time;
9.
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(e) references to any enactment shall be deemed to include
references to such enactment as re-enacted, amended or
extended;
(f) references to "law" include, without limitation, any
legislation or decree or any decision of any court or tribunal
in any applicable jurisdiction;
(g) references to "consent" include, without limitation, any
license, approval, waiver, filing, registration or
authorisation;
(h) references to a "party" are to a party to this Agreement and
"parties" shall be construed accordingly;
(i) references to statutes or regulations are to be construed as
including all statutory and regulatory provisions
consolidating, amending or replacing the statute or regulation
referred to;
(j) references to agreements and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments
and other modifications are not prohibited by the terms of the
Loan Documents;
(k) the words "hereof," "herein," "hereto," "hereunder" and the
like mean and refer to this Agreement or any other Loan
Document as a whole and not merely to the specific Article,
Section, subsection, paragraph or clause in which the
respective word appears;
(l) the words "including," "includes" and "include" shall be
deemed to be followed by the words "without limitation";
10.
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(m) in the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but
excluding"; and the word "through" means "to and including."
1.6 Majority Banks
Any matter to be determined by the Majority Banks under this Agreement
shall (as between the Banks) only be regarded as having been validly
determined if all the Banks have received prior notice of the matter in
question and the relevant majority of Banks have given or issued the
relevant opinion, consent, request or instructions, as appropriate,
though the Borrower shall be entitled (and bound) to assume that that
notice was duly received by each Bank and that the relevant majority
was obtained to constitute Majority Banks whether or not this is in
fact the case.
2. THE FACILITY
2.1 Amount
The Banks, relying on each of the representations and warranties in
Clause 9, agree to make available to the Borrower during the
Availability Period on and subject to the terms of this Agreement a
credit facility of up to (yen)25,000,000,000 (twenty five billion Yen).
The obligation of each Bank under this Agreement shall be to contribute
that proportion of each Advance which its Commitment bears to the total
of the Commitments of all the Banks.
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2.2 Obligations several
The obligations of each Bank under this Agreement are several; the
failure of any Bank to perform its obligations shall not relieve any
other party of any of its respective obligations or liabilities under
this Agreement nor shall any party be responsible for the obligations
of any other party under this Agreement.
2.3 Interests several
The interests of the Agent, the Arranger and the Banks are several and
the amount due to the Agent (for its own account), to the Arranger and
to each Bank is a separate and independent debt. The Agent, the
Arranger and (as provided in Clause 6.7 and Clause 14.1, but otherwise
acting through the Agent in accordance with the terms of this
Agreement) each Bank shall have the right to protect and enforce its
rights arising out of this Agreement and may do so without joining any
other party to any proceedings taken for that purpose.
3. CONDITIONS
3.1 Documents and evidence
The obligation of each Bank to make its Commitment available is
conditional on the Agent, or its duly authorised representative, having
received the documents and evidence specified in Schedule 2 in form and
substance satisfactory to the Agent by the respective dates specified
in that schedule. The Agent shall notify the Banks promptly after
receipt by it of the documents and evidence referred to in this Clause
3 in form and substance satisfactory to it.
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3.2 General conditions precedent
The obligation of each Bank to contribute to any Advance is subject to
the further conditions that:
(a) at the time of the giving of a Drawdown Notice for, and at the
time of the making of, such Advance;
(i) the representations and warranties set out in Clause
9 (and so that the representation and warranty in
Clause 9.1(f) shall for this purpose refer to the
then latest audited financial statements delivered to
the Agent under Clause 10.1) and in Section 10 of the
Guaranty are true and correct on and as of each such
time as if each was made with respect to the facts
and circumstances then existing; and
(ii) no Default shall have occurred and be continuing or
would result from the making of such Advance; and
(b) the Agent shall have received:
(i) confirmation from the Borrower that each of the
statements made in paragraphs (i)-(v) of the relevant
Drawdown Notice remains true, complete and accurate
as at the Drawdown Closing Date;
(ii) a certificate from the Guarantor as provided by
paragraph B(g) of Schedule 2; and
13.
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(iii) payment of all fees then due in accordance with the
fee letter between the Borrower and the Arranger
dated 10 November 1995 and of all expenses (including
legal, printing and out-of-pocket expenses) incurred
by the Agent and the Arranger in connection with the
negotiation, preparation, syndication and execution
of this Agreement and the preparation and
distribution of the Information Memorandum dated
November 1995 in connection with this Agreement,
subject to the terms of the letter dated 30 November
1995 between the Arranger and the Borrower.
Nothing in this Clause 3.2 constitutes a waiver of any right of the
Banks arising from any Event of Default which shall have occurred and
be outstanding at the time of the drawing of the relevant Advance.
3.3 Waiver of conditions precedent
The conditions specified in this Clause 3 are solely for the benefit of
the Banks and may be waived on their behalf in whole or in part and
with or without conditions by the Agent acting on the instructions of
the Majority Banks in respect of the first or any other Advance without
prejudicing the right of the Agent acting on those instructions to
require fulfillment of such conditions in whole or in part in respect
of any other Advance.
3.4 Further conditions precedent
Not later than five Banking Days prior to the date of any Advance, in
the case of a TIBOR Loan, or five LIBOR Banking Days prior to the date
of any Advance, in the case of a LIBOR Loan, the Agent may request and
the Borrower shall, not later than two Banking Days (or two LIBOR
Banking Days, as the case may be) prior to that date, deliver to the
Agent such further favourable certificates and/or opinions as to any or
all of the matters
14.
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the subject of Clauses 3.1, 9, 10 and 11 as the Agent or the Majority
Banks may reasonably require.
4. ADVANCES
4.1 Drawdown
Subject to the terms and conditions of this Agreement, an Advance may
be made to the Borrower following receipt by the Agent from the
Borrower of a Drawdown Notice not later than 10 a.m. on (a) the fifth
Banking Day, in the case of a TIBOR Loan (or the third Banking Day, in
the case of the first Advance), or (b) the fifth LIBOR Banking Day, in
the case of a LIBOR Loan (or the third LIBOR Banking Day, in the case
of the first Advance), before the date on which the Advance is intended
to be made, which shall be a Banking Day (or LIBOR Banking Day, as the
case may be) falling within the Availability Period. A Drawdown Notice
shall be effective on actual receipt by the Agent and, once given,
shall, subject to Clause 5.8(a), be irrevocable. No Drawdown Notice may
be given in respect of an amount which is the subject of a notice of
cancellation under Clause 6.6. Not more than one Advance may be made on
any one day. The Commitments may be drawn in a single Advance, though
not more than ten Advances shall be made.
4.2 Amount
Each Advance shall be a minimum of (Yen)1,000,000,000 (one billion Yen)
or, if less, the balance of the Available Facility Amount. Each Advance
of more than (Yen)1,000,000,000 (one billion yen) shall be an integral
multiple of (Yen)100,000,000 (one hundred million yen).
15.
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4.3 Maturity
The Loan shall mature on the Final Maturity Date.
4.4 Notification to Banks
The Agent shall promptly notify each Bank of receipt of a Drawdown
Notice complying with the terms of this Agreement and of the date on
which the Advance is to be made and, subject to Clause 3, each of the
Banks shall on that date make available to the Agent its portion of
that Advance in accordance with Clause 8.2, and unless other payment
instructions are provided by the Borrower, the Agent shall make such
Advance available to the Borrower by crediting the Borrower's Account
on that date.
4.5 The Expiration Date
Without prejudice to any other provision of this Agreement, the
Commitments shall in any event be reduced to zero on the Expiration
Date and no Advances shall be made to the Borrower under this Agreement
after that date. On the Expiration Date, the Borrower shall deliver to
each Bank, through the Agent, a confirmation in substantially the form
of Exhibit 6 confirming (a) the aggregate amount of all Advances made
and the amount of each Bank's Contribution as of the Expiration Date
and (b) the repayment schedule with respect to the aggregate amount of
the Loan and with respect to each Bank's Contribution.
4.6 Extension of Expiration Date
Subject to receipt of the consent of all of the Banks, the Borrower may
extend the Expiration Date to the later date specified in the
definition "Expiration Date" by:
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(a) giving the Agent notice to that effect not less than 45 days
prior to the original Expiration Date; and
(b) subject to all of the Banks having consented to the extension,
paying to the Agent, for the benefit of the Banks, on or
before the original Expiration Date an amount calculated by
the Agent as being equal to 0.10 per cent of the undrawn
Commitments as at the original Expiration Date.
The Agent shall promptly notify each Bank of receipt of any notice
pursuant to Clause 4.6(a) and the Banks shall notify the Agent of
whether or not they consent to the proposed extension within 20 days of
receipt of that notification; failure to notify the Agent within that
period shall be deemed to be a refusal of consent. The Agent shall
promptly notify the Borrower of the Banks' decision.
4.7 Application of proceeds
Without prejudice to the Borrower's obligations under Clause 10.1(b),
none of the Banks, the Arranger or the Agent shall have any
responsibility for the application by the Borrower of the proceeds of
any Advance.
5. INTEREST RATES AND INTEREST PERIODS
5.1 Usual interest rate
The Borrower shall pay interest on each Advance or, as the case may be,
the Loan in respect of each Interest Period on the last day of each
Interest Period (each an "Interest Payment Date") at the rate per annum
determined by the Agent to be the aggregate of (i) the applicable
Margin and (ii) TIBOR, if the Borrower has requested such Advance or
17.
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the Loan to be made as a TIBOR Loan during such Interest Period, or
LIBOR, if the Borrower has requested such Advance or the Loan to be
made as a LIBOR Loan during such Interest Period.
5.2 Default interest
During the existence of an Event of Default the Borrower shall pay
interest (both before and after judgment) on (a) the outstanding
Advances (or Loan, as the case may be) and (b) on any amount (other
than principal of the outstanding Advances) not paid when due at a rate
determined by the Agent pursuant to this Clause 5.2.
(a) The period beginning on the occurrence of the Event of Default
(the "Default Date")and ending on the date any such Event of
Default is cured or waived in accordance with the terms hereof
shall be divided into successive periods of not more than
three months (each a "default period") as selected by the
Agent (after consultation with the Banks) each of which (other
than the first, which shall commence on the Default Date)
shall commence on the last day of the preceding default
period, provided that if an amount of principal has become due
and payable by reason of a declaration by the Agent under
Clause 11.2(b) or a prepayment pursuant to Clause 6.3 or
Clause 13.1 prior to the Repayment Date for such amount of
principal, the first default period selected by the Agent
shall end on that Repayment Date.
(b) The rate of interest applicable to each default period shall
be the rate per annum determined by adding (i) two per cent
and (ii) the applicable Margin or Margins then in effect to
TIBOR (or LIBOR, as the case may be) as in effect for each
Interest Period.
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(c) Default interest under this Clause 5.2 shall be due and
payable on the last day of each default period or, if earlier,
on the date on which the sum in respect of which that default
interest is accruing is actually paid.
(d) If the Agent is unable to determine a rate in accordance with
the foregoing provisions of this Clause 5.2, each Bank shall
promptly notify the Agent of the cost of funds to such Bank
and interest on any sum not paid on its due date for payment
shall be calculated for each Bank at a rate determined by the
Agent to be two per cent per annum above the aggregate of the
Margin and the cost of funds to such Bank, as determined by
such Bank in its sole discretion.
5.3 Margin
(a) The Margin shall be, in respect of any period beginning 15
days after the Margin Determination Date and in respect of any
portion of any Contribution other than any Collateralized
Amount:
(i) if, on any Margin Determination Date, the Ratio for
the relevant Margin Period is equal to or greater
than 1:1 or if the Debt Rating is BB+ or higher, 0.75
per cent per annum; or
(ii) if, on any Margin Determination Date, the Ratio for
the relevant Margin Period is less than 1:1 (or if
the Borrower shall not have delivered a Margin
Certificate with respect to the relevant Margin
Period in accordance with this Clause 5.3) and the
Debt Rating is BB or below, 0.90 per cent per annum.
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(b) The Margin shall be, in respect of any period during the
Availability Period and in respect of each Collateralized
Amount (provided that the corresponding Collateral is held by
the Banks in accordance with Clause 6.7 and in any event in a
manner satisfactory to the relevant Bank for such period),
0.30 per cent per annum.
The Borrower shall notify the Agent of the Ratio and the Debt Rating as
of each Margin Determination Date and shall submit Margin Certificates
(duly completed and signed by a Responsible Officer of the Guarantor),
and supporting evidence in respect thereof on or before each Margin
Determination Date.
5.4 Reference Bank quotations
If any Reference Bank is unable or otherwise fails to furnish a
quotation for the purpose of calculating LIBOR the interest rate shall
be determined, subject to Clause 5.8, on the basis of the quotations
furnished by the remaining Reference Bank.
5.5 Selection of Interest Rate and Interest Periods
Before the beginning of the initial Interest Period with respect to any
Advance, the Borrower may by notice received by the Agent not later
than 10 a.m. on the fifth Banking Day (in the case of a TIBOR Loan) or
the fifth LIBOR Banking Day (in the case of a LIBOR Loan) and subject
to Clause 5.6 specify whether (i) that Advance is to bear interest at a
rate determined by reference to TIBOR or to LIBOR and (ii) that
Interest Period shall have a duration of 1, 3 or 6 months. The Borrower
may select subsequent Interest Periods with respect to that portion of
the Loan equal in amount to the amount of such Advance (or in any such
other amount as shall not be larger than such Advance nor smaller than
(Yen)1,000,000,000 (one billion Yen)), subject in each case to Clause
5.6, provided that there
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shall be no more than ten Interest Periods in effect at any time with
respect to the Loan (including the initial Interest Period with respect
to any Advance). Before the beginning of each subsequent Interest
Period, the Borrower may by notice received by the Agent not later than
10 a.m. on the fifth Banking Day (in the case of a TIBOR Loan) or the
fifth LIBOR Banking Day (in the case of a LIBOR Loan) and subject to
Clause 5.6 specify whether (i) the Loan (or portion thereof subject to
such Interest Period) is to bear interest at a rate determined by
reference to TIBOR or to LIBOR and (ii) that Interest Period shall have
a duration of 1, 3 or 6 months and also specify (x) whether the whole
of the Loan or a portion thereof shall be subject to that Interest
Period and (y) (if that Interest Period applies to a portion of the
Loan) the amount of such portion subject to that Interest Period. If at
any time the Borrower fails to specify whether the interest rate with
respect to any Interest Period will be determined by reference to TIBOR
or to LIBOR, the Borrower will be deemed to have selected TIBOR as the
basis for such determination. Also, if at any time the Borrower fails
to specify the amount of (the portion of) the Loan subject to any
subsequent Interest Period, the Borrower will be deemed to have
specified an amount equal to the whole or the portion of the Loan with
respect to which the immediately preceding Interest Period ends on the
date of beginning of such subsequent Interest Period.
5.6 Determination of Interest Periods
Each Interest Period shall be of the duration specified by the Borrower
pursuant to Clause 5.5 except that:
(a) the initial Interest Period in respect of each Advance will
commence on the Drawdown Date for such Advance and each
subsequent Interest Period in respect of all or any part of
the Loan will commence on the last day of the previous
Interest Period for all or such part of the Loan;
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(b) any Interest Period that would otherwise overrun the Final
Maturity Date shall end on the Final Maturity Date;
(c) the Borrower may choose an Interest Period of less than one
month in order that the Interest Period may end on a Repayment
Date;
(d) the Borrower may not choose an Interest Period for any part of
the Loan if as a result thereof the Borrower would be unable
to make the payment due on the next Repayment Date on a day
which is an Interest Payment Date; and
(e) if the Borrower fails to specify the duration of an Interest
Period in accordance with the provisions of Clause 5.5 and
this Clause 5.6 that Interest Period shall have a duration of
one month or such other period as shall comply with this
Clause 5.5.
5.7 Notification of Interest Periods and interest rate
The Agent shall notify the Borrower and the Banks promptly of the
duration of each Interest Period or other period for the calculation of
interest (or, as the case may be, default interest) and of each rate of
interest determined by it under this Clause 5.
5.8 Market disruption; non-availability
(a) If and whenever, at any time prior to the making or
continuation of an Advance:
(i) the Agent shall have determined (which determination
shall, in the absence of manifest error, be
conclusive), that adequate and fair means do not
exist for ascertaining TIBOR or LIBOR, as the case
may be, in respect of any Interest Period in
accordance with this Agreement; or
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(ii) the Agent shall have received notification from Banks
with Contributions aggregating not less than
one-third of the total of the Advances (or, if no
Advance has been made, Commitments aggregating not
less than one third of the Commitments of all the
Banks) that deposits in Yen are not available to
those Banks in the relevant interbank market in the
ordinary course of business in sufficient amounts to
fund (or maintain) their Contributions to that
Advance or that their funding costs in respect of
that Advance are not accurately reflected by TIBOR or
LIBOR, as the case may be, having regard to the
likely interest rate in respect of such Interest
Period, the Agent shall immediately give notice (a
"Determination Notice") of that fact to the Borrower
and to each of the Banks and that Advance shall not
be made or continued. A Determination Notice shall
give particulars of the relevant circumstances giving
rise to its issue.
(b) After the giving of any Determination Notice (i) with respect
to the unavailability of deposits in Yen in Tokyo, the
affected Advance will be made or continued only as LIBOR
Loans, and (ii) with respect to the unavailability of deposits
in the London Interbank Market, the affected Advance will be
made or continued only as TIBOR Loans, or (iii) with respect
to the unavailability of deposits in both of the relevant
interbank markets, the undrawn amount of the Commitments of
all the Banks shall not be borrowed, and the outstanding
amount of the affected Advance shall be repaid and be
unavailable for re-borrowing, until notice to the contrary is
given to the Borrower by the Agent and the Agent (on behalf of
and after consultation with the Banks) shall then negotiate
with the Borrower with a view to agreeing on an alternative
basis for calculating the interest payable on and/or for
making, maintaining and/or funding Advances. Any alternative
basis agreed in writing by the Agent (on behalf of and with
the consent of all the Banks) and the
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Borrower within 25 days of the Agent's notification of the
event in question shall take effect in accordance with its
terms.
6. REPAYMENT, PREPAYMENT AND CANCELLATION
6.1 Repayment
The Loan shall be repaid in eight consecutive six-monthly instalments,
the first to be paid on the date being 18 months from the Closing Date
and the final instalment to be paid on the Final Maturity Date. The
first instalment, and unless the Expiration Date has been extended
pursuant to Clause 4.6 each subsequent instalment, shall be in an
amount equal to one-eighth of the aggregate principal amount borrowed
prior to such repayment date, and if the Expiration Date has been
extended pursuant to Clause 4.6, each subsequent instalment shall be in
an amount equal to one-seventh (1/7) of the aggregate amount of the
Loan as of the Expiration Date.
6.2 Voluntary prepayment
The Borrower may voluntarily prepay the Loan (in whole or in part)
subject to the provisions of this Clause 6 and of Clause 12.1. Any
voluntary prepayment shall be a minimum of (Yen)1,000,000,000 (one
billion Yen) or a larger sum which is an integral multiple of
(Yen)100,000,000 (one hundred million Yen).
6.3 Additional voluntary prepayment
The Borrower may also prepay (in whole but not in part only), without
premium or penalty, but without prejudice to its obligations under
Clause 8.9, Clause 12.1 or
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Clause 13.2, the Contribution of any Bank to which the Borrower has
become obliged to pay additional amounts under Clause 8.9 or Clause
13.2. On notice of such a prepayment being given, the Commitment of the
relevant Bank shall be reduced to zero.
6.4 Timing, amounts and application of prepayments
Prepayments made on a date other than an Interest Payment Date will be
subject to, inter alia, the provisions of Clause 12.1(c). Prepayments
under this Agreement shall be made together with: (a) accrued interest
to the date of prepayment; (b) any additional amount payable under
Clause 8.9 or Clause 13.2; and (c) all other sums payable by the
Borrower to the relevant Bank under this Agreement including any
accrued commitment or agency fee payable under Clause 7.1 and any
amounts payable under Clause 12.1. Prepayments on the Loan shall be
applied to such Interest Period or Interest Periods as the Borrower may
select (without prejudice to its obligations under Clause 12.1) and in
reverse order, beginning with the most remote instalments of principal
coming due on the Loan, so that the Borrower's obligation to pay the
scheduled instalments of principal hereunder pursuant to Clause 6.1
shall not be affected until the entire outstanding principal of the
Loan has been paid in full.
6.5 Notice and effect of prepayment
No prepayment may be effected under this Clause 6 unless the Borrower
shall have given the Agent at least 30 days' notice of its intention to
make such prepayment. Every notice of prepayment shall be effective
only on actual receipt by the Agent, shall be irrevocable and shall
oblige the Borrower to make such prepayment on the date specified in
the notice. On a prepayment being made, the Commitments shall be
automatically reduced by an amount equal to the amount so prepaid and
sums prepaid may not be reborrowed.
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6.6 Cancellation of Commitments
The Borrower may at any time during the Availability Period by
irrevocable notice to the Agent (effective only on actual receipt)
cancel with effect from a date not less than 10 days after the receipt
by the Agent of that notice the whole or any part (being
(Yen)1,000,000,000 (one billion Yen) or a larger sum which is an
integral multiple of (Yen)100,000,000 (one hundred million Yen)) of the
total of the undrawn Commitments of all the Banks. On that cancellation
taking effect the Commitment of each Bank shall be reduced
proportionately.
6.7 Collateralization
The Borrower may cash collateralize all or part of an Advance by means
of making a Yen deposit ("Collateral") with each Bank on the terms of
this Clause 6.7 and, if a Bank so selects, pursuant to the relevant
Account Pledge.
(a) The Borrower shall give the Agent not less than five Banking
Days' notice of its intention to deposit Collateral (or 5
LIBOR Banking Days, in the case of a deposit in connection
with a LIBOR Loan); that notice shall state the Banking Day or
LIBOR Banking Day, as the case may be (which shall be during
the Availability Period and shall be a Drawdown Date of an
Advance) on which the Collateral is to be deposited,
specify the aggregate amount of the Collateral, which shall be
an integral multiple of (Yen)100,000,000 (one hundred million
yen) or the amount of such Advance, and apportion the
Collateral between the Banks.
(b) The Borrower shall deposit the Collateral with the Banks pro
rata to their Contributions (i) to such account with the
relevant Bank as designated by such Bank specifically for such
Collateral, or (ii) if the relevant Bank so selects, to the
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relevant Pledged Account (provided that the relevant Account
Pledge shall have been duly executed and delivered) on the
Drawdown Date of the relevant Advance, and shall, in the case
of (i), take such necessary steps on or before such Drawdown
Date as the relevant Bank requires in order to satisfy such
Bank that the Collateral is duly pledged or otherwise
constitutes security to secure the Loan (in whole or in part)
and is duly perfected.
(c) The Collateral deposited with each Bank shall be held by that
Bank in the designated account or the Pledged Account, as the
case may be, only during the Availability Period, subject to
paragraph (d) below with respect to withdrawals, and may be
applied by the Bank as security against the Borrower's
obligations to it under this Agreement, including pursuant to
the agreement (the "Collateral Agreement") concerning such
account and pledge or security interest over it or pursuant to
the relevant Account Pledge, as the case may be, or through
the exercise by the Bank against the Collateral of its set-off
rights in accordance with Clause 14.1.
(d) Subject to the relevant Collateral Agreement or the relevant
Account Pledge, as the case may be, Collateral may be
withdrawn only on 10 Banking Days' prior notice to the Agent
and only on (i) an Interest Payment Date, or (ii) the
Expiration Date; withdrawals shall be an integral multiple of
(Yen)100,000,000 (one hundred million yen) and apportioned pro
rata among the Banks in accordance with their Contributions.
When any Collateral is withdrawn in part pursuant to the
foregoing provision, a Bank (other than a Bank in favour of
which an Account Pledge has been executed and delivered) may
require the Borrower to take such steps on or before such date
of withdrawal as are necessary to satisfy such Bank that the
remaining Collateral is duly pledged or otherwise constitutes
a valid security interest to secure such Bank's Contribution
(or part thereof) and is duly perfected,
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and the Borrower shall comply with such requirements.
Notwithstanding Clause 17.4, any agreement, instrument or
other document (other than the Account Pledge) which the
relevant Bank requires pursuant to this Clause 6.7 may be in
the Japanese language consistent with such Bank's normal
practice for taking and perfecting a pledge or other security
interest over deposits.
7. FEES AND EXPENSES
7.1 Fees
The Borrower shall pay to the Agent whether or not any part of the
Commitments is ever advanced:
(a) an arrangement fee, underwriting fee and agency fee, in the
amounts and at the times agreed between the Borrower and the
Arranger in a letter dated 10 November 1995; and
(b) beginning 31 March 1996 and on the last day of each
consecutive three month period thereafter, for the account of
each Bank, a commitment fee computed in respect of the period
then ending at the rate of 0.125 per cent per annum on the
daily undrawn and uncancelled amount of that Bank's Commitment
during that period calculated based on the actual number of
days elapsed and a 365 day year. Any Bank shall have the right
not to receive any commitment fee for all or part of any
period, without prejudice to such Bank's right to receive such
fee for any other part of that period or for any other period.
Prior to the Closing Date each Bank wishing to exercise such
right not to receive the commitment fee for any period shall
notify the Agent of the specifics thereof.
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7.2 Expenses
The Borrower shall pay to the Agent:
(a) on or before the Drawdown Closing Date for the first Advance
(and, to the extent not paid on or before such Drawdown
Closing Date, within the time period provided for in Section
17(a)(i) of the Guaranty), all reasonable expenses (including
legal, printing and out-of-pocket expenses) incurred by the
Agent and the Arranger in connection with the negotiation,
preparation, syndication and execution of this Agreement and
the preparation and distribution of the Information Memorandum
dated November 1995 in connection with this Agreement whether
or not any part of the Commitments is ever advanced but
subject to an aggregate limit as agreed to by the Agent and
the Borrower in a letter dated 30 November 1995;
(b) as soon as reasonably practicable in accordance with the
Borrower's customary procedures for reviewing and processing
such items, and in any event within 30 days following receipt
of the Agent's invoice therefor, all reasonable expenses
(including legal and out-of pocket expenses) incurred by the
Agent and the Arranger in connection with any amendment or
extension of or the granting of any waiver or consent under
this Agreement; and
(c) on demand, all reasonable expenses (including legal and
out-of-pocket expenses) incurred by the Agent, the Arranger,
the Banks or any of them in contemplation of, or otherwise in
connection with, the enforcement of, or preservation of any
rights under, this Agreement, or otherwise in respect of the
moneys owing under this Agreement, together with interest at
the rate referred to in Clause 5.2 from the
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date on which such expenses were incurred to the date of
payment (as well after as before judgment).
7.3 Consumption, etc. tax
All fees and expenses payable pursuant to this Clause 7 shall be paid
together with an amount equal to any consumption, sales, value added or
similar tax payable by the Agent, the Arranger or any Bank in respect
of those fees and expenses.
7.4 Stamp and other duties
The Borrower shall pay all stamp, documentary, registration or other
like duties or taxes (including any duties or taxes payable by the
Banks) imposed on or in connection with this Agreement or the Facility
and shall indemnify the Agent, the Arranger and the Banks against any
liability arising by reason of any delay or omission by the Borrower to
pay such duties or taxes.
8. PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
8.1 No set-off or counterclaim; distribution to the Banks
The Borrower acknowledges that, in performing their obligations under
this Agreement, the Banks will be incurring liabilities to third
parties in relation to the funding of amounts advanced to the Borrower,
those liabilities matching the liabilities of the Borrower to the
Banks, and that it is reasonable for the Banks to be entitled to
receive payments from the Borrower gross on their due date in order
that the Banks are put in a position to perform their matching
obligations to the relevant third parties. Accordingly all payments to
be made by the Borrower under this Agreement shall be made in full,
without any set-off or
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counterclaim whatsoever and, subject to Clause 8.9, free and clear of
any deductions or withholdings, in Yen (except for costs, charges or
expenses which shall be payable in the currency in which they are
incurred) on their due date to the account of the Agent specified in
Schedule 1 or such other bank and/or account as the Agent may from time
to time specify for this purpose; provided, however, that in the event
of an Insolvency Proceeding affecting any Bank, any Collateral
deposited in a Pledged Account at such Bank shall be retained as
payment for, and shall be credited against, the Borrower's obligations
under this Agreement to such Bank, and the Borrower shall have no
further obligation to such Bank with respect to the amount so credited.
Except where this Agreement specifically provides for a payment to be
made for the account of a particular Bank, the Agent or the Arranger,
payments to be made by the Borrower under this Agreement shall be for
the account of all the Banks and the Agent shall forthwith distribute
those payments in like funds as are received by the Agent to the Banks
rateably in accordance with their Commitments or Contributions, as the
case may be.
8.2 Payments by the Banks
Sums to be advanced by the Banks to the Borrower under this Agreement
shall be remitted in Yen on the date of the Advance as stated in the
relevant Drawdown Notice to the account of the Agent at such bank as
the Agent may have notified to the Banks and shall be paid by the Agent
on that date in like funds as are received by the Agent to the account
of the Borrower specified in the relevant Drawdown Notice.
8.3 Netting of Payments
Despite any other provision of this Agreement, if on any date an amount
(the "first amount") is to be advanced by a Bank under this Agreement
and an amount (the "second amount") is due from the Borrower to that
Bank under this Agreement, that Bank and the
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Borrower shall make their respective sums available to the Agent in
accordance with Clauses 8.1 and 8.2, and the Agent shall apply the
first amount in or towards payment of the second amount and shall remit
to that Bank (or to the Borrower, as the case may be), the excess of
one amount over the other amount in accordance with this Agreement.
8.4 Agent may assume receipt
Where any sum is to be paid under this Agreement to the Agent for the
account of the Borrower or any Bank, the Agent may assume that the
payment will be made when due and may (but shall not be obliged to)
make that sum available to the Person so entitled. If that payment is
then not made to the Agent, then the Person to whom that sum was made
available shall on request refund that sum to the Agent together with
interest on it sufficient to compensate the Agent for the cost of
making the sum available up to the date of repayment and the Person by
whom the sum was payable shall indemnify the Agent for all loss or
expense which the Agent may sustain or incur as a consequence of that
sum not having been paid on its due date.
8.5 Time of payment
Any sum payable by the Borrower to the Agent, the Arranger or to any
Bank under this Agreement shall be paid so as to be received in
immediately available funds in the payee's designated account by 11:00
a.m. for that account. Any payment received by the Agent from the
Borrower for the account of the Arranger or any Bank or Banks which is
received on its due date but after the time specified above and too
late to be made available on that due date to the Arranger or the
relevant Bank or Banks, as appropriate, shall be deemed to be received
on the next Banking Day (though the Agent shall give credit to the
Borrower for any interest earned by the Agent on that sum prior to its
distribution). In holding any such sum, the Agent shall not be acting
as agent of or trustee for the Borrower
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and may invest, deposit or otherwise deal with that sum as it may, in
its absolute discretion, see fit without any duty or obligation to the
Borrower in respect of that sum other than as specifically provided for
in this Agreement.
8.6 Non-Banking Days
When any payment under this Agreement would otherwise be due on a day
which is not a Banking Day (or a LIBOR Banking Day, in the case of
payment of principal or interest on a LIBOR Loan), the due date for
payment shall be extended to the next following Banking Day (or LIBOR
Banking Day, as the case may be) unless that Banking Day falls in the
next calendar month in which case payment shall be made on the
immediately preceding Banking Day (or LIBOR Banking Day, as the case
may be).
8.7 Calculations
Except with respect to interest on the Loan and unless provided
otherwise, all interest and other payments of an annual nature under
this Agreement shall accrue from day to day and be calculated on the
basis of actual days elapsed and a 365 day year. Interest on the Loan
shall accrue from day to day and be calculated on the basis of actual
days elapsed and a 360 day year.
8.8 Certificates conclusive
Any certificate or determination of the Agent or any Bank as to any
rate of interest or any amount payable under this Agreement shall, in
the absence of manifest error, be conclusive and binding on the
Borrower and (in the case of a certificate or determination by the
Agent) on the Banks; provided that, in the case of expenses required to
be paid by the Borrower pursuant to Clause 7.2, the Agent, the
Arranger, or any Bank, as the case
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may be, shall provide such invoices, receipts or other documents
evidencing or supporting such determination as is reasonably available
to it, and such evidence or support shall be prima facie evidence of
the amount payable by the Borrower pursuant to Clause 7.2.
8.9 Grossing-up for Taxes
If at any time the Borrower is required to make any deduction or
withholding in respect of Taxes from any payment due under this
Agreement for the account of any Bank, the Arranger or the Agent (or if
the Agent is required to make any such deduction or withholding from a
payment to the Arranger or a Bank)(except, in any such case, deductions
or withholdings resulting from any Bank which is not a domestic
corporation for the purposes of the Japanese Income Tax Law (shotoku
zei hou) failing to satisfy the requirements of Article 180 of that law
and Articles 304 and 305 of the Ordinance Enforcing the Income Tax Law,
as modified by Article 42-2 of the Law Concerning Special Tax Treatment
and Article 27-2 of the Ordinance Enforcing the Law Concerning Special
Tax Treatment), the sum due from the Borrower in respect of such
payment shall be increased to the extent necessary to ensure that,
after the making of such deduction or withholding, each Bank, the
Arranger and the Agent receives on the due date for such payment (and
retains, free from any liability in respect of such deduction or
withholding) a net sum equal to the sum which it would have received
had no such deduction or withholding been required to be made and the
Borrower shall indemnify each Bank, the Arranger and the Agent against
any losses or costs incurred by any of them by reason of any failure of
the Borrower to make any such deduction or withholding or by reason of
any increased payment not being made on the due date for such payment.
The Borrower shall promptly deliver to the Agent any receipts,
certificates or other proof evidencing the amounts (if any) paid or
payable in respect of any deduction or withholding as aforesaid.
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8.10 Bank accounts
Each Bank shall maintain, in accordance with its usual practices, an
account or accounts evidencing the amounts from time to time lent by,
owing to and paid to it under this Agreement. The Agent shall maintain
a control account showing the Advances and other sums owing by the
Borrower under this Agreement and all payments in respect thereof made
by the Borrower from time to time. The control account shall, in the
absence of manifest error, be conclusive as to the amount from time to
time owing by the Borrower under this Agreement.
8.11 Partial payments
If, on any date on which a payment is due to be made by the Borrower
under this Agreement, the amount received by the Agent from the
Borrower falls short of the total amount of the payment due to be made
by the Borrower on that date then, without prejudice to any rights or
remedies available to the Agent, the Arranger or the Banks under this
Agreement, the Agent shall apply the amount actually received from the
Borrower in or towards discharge of the obligations of the Borrower
under this Agreement in the following order, notwithstanding any
appropriation made, or purported to be made, by the Borrower:
(a) firstly, in or towards payment of any unpaid fees, costs and
expenses of the Agent under this Agreement;
(b) secondly, in or towards payment to the Arranger of any portion
of the arrangement fee or underwriting fee payable under
Clause 7.1(a) which remains unpaid;
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(c) thirdly, in or towards payment to the Banks, on a pro rata
basis, of any accrued commitment fee payable under Clause
7.1(b) which is due but remains unpaid;
(d) fourthly, in or towards payment of any default interest which
is due but remains unpaid;
(e) fifthly, in or towards payment to the Banks, on a pro rata
basis, of any accrued interest (other than default interest)
which is due but remains unpaid;
(f) sixthly, in or towards payment to the Banks, on a pro rata
basis, of any principal which is due but remains unpaid; and
(g) seventhly, in or towards payment of any other sum which is due
but remains unpaid (and, if more than one such sum so remains
unpaid, on a pro rata basis).
8.12 Variation of application
The order of application set out in Clause 8.11(c) - 8.11(g) may be
varied by the Agent only if all the Banks so direct.
9. REPRESENTATIONS AND WARRANTIES
9.1 Representations and Warranties
The Borrower represents and warrants to each of the Banks, the Arranger
and the Agent that:
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(a) Due incorporation
the Borrower is duly incorporated and validly existing under
the laws of Japan as a limited liability stock company and has
power to carry on its business as it is now being conducted
and to own its property and other assets;
(b) Corporate power to borrow
the Borrower has power to execute, deliver and perform its
obligations under this Agreement and to borrow the
Commitments; all necessary corporate, shareholder and other
action has been taken to authorise the execution, delivery and
performance of the same and no limitation on the powers of the
Borrower to borrow will be exceeded as a result of borrowings
under this Agreement;
(c) Binding obligations
this Agreement constitutes valid and legally binding
obligations of the Borrower enforceable in accordance with its
terms, except insofar as the validity, binding nature and
enforceability of the Borrower's obligations hereunder may be
limited by the effect of insolvency, reorganization,
arrangement, moratorium, and other similar laws, statutes of
limitation, and the effect of general principles of equity;
(d) No conflict with other obligations
the execution and delivery of, the performance of its
obligations under, and compliance with the provisions of, this
Agreement by the Borrower will not (i) contravene any existing
material law or licence to which the Borrower is subject; (ii)
conflict with, or result in any breach of any of the terms of,
or
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constitute a default under, any material agreement or other
instrument to which the Borrower is a party or is subject or
by which it or any of its property is bound; (iii) contravene
or conflict with any provision of the Borrower's Articles of
Incorporation or (iv) result in the creation or imposition of
or oblige the Borrower to create any Lien on any of the
Borrower's undertaking, assets, rights or revenues;
(e) Consents obtained
No authorization, consent, approval, license, exemption of, or
notarisation, filing, recordation, registration or enrollment
in or with, any Governmental Authority, or approval or consent
of any other Person, is required for the due execution,
delivery, validity, enforceability or admissibility in
evidence of this Agreement or the performance by the Borrower
of its obligations under this Agreement;
(f) Financial statements correct and complete
the audited financial statements of the Borrower in respect of
the financial year ended on 31 December 1994 and the unaudited
financial statements of the Borrower in respect of the
financial quarter ended 30 September 1995, each as delivered
to Agent, have been prepared in accordance with generally
accepted accounting principles and practices in Japan (in the
case of the yearly financial statements) or GAAP (in the case
of the quarterly financial statements), which in each case
have been consistently applied and present fairly and
accurately the financial position of the Borrower as at such
dates, respectively, and the results of the operations of the
Borrower for the respective financial periods ended on such
dates and, as at such dates, the Borrower did not have any
significant liabilities
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(contingent or otherwise) or any unrealised or unanticipated
losses which are not disclosed by, or reserved against or
provided for in, those financial statements;
(g) Choice of law
the choice by the Borrower of the laws of Japan to govern this
Agreement is valid and binding;
(h) No immunity
neither the Borrower nor any of its assets is entitled to
special immunity (other than those generally available) on the
grounds of sovereignty or otherwise from any legal action or
proceeding (which shall include, without limitation, suit,
attachment prior to judgment, execution or other enforcement);
and
(i) No withholding Taxes
provided that each Bank is incorporated in or has its Lending
Office in Japan and, in the latter case, has duly satisfied
the requirements of Article 180 of the Income Tax Law of
Japan, Articles 304 and 305 of the Ordinance Enforcing the
Income Tax Law, as modified by Article 42-2 of the Law
Concerning Special Tax Treatment and Article 27-2 of the
Ordinance Enforcing the Law Concerning Special Tax Treatment,
no Taxes (other than Stamp Tax) are imposed by withholding or
otherwise on any payment to be made by the Borrower under this
Agreement or are imposed on or by virtue of the execution or
delivery by the Borrower of this Agreement or any document or
instrument to be executed or delivered under this Agreement.
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9.2 Representations and Warranties incorporated by reference
The Borrower represents and warrants that, as to the Borrower, the
statements contained in subsections 10(e), (f), (g), (h), (i) (j), (k),
(m), (o), (p), (s) and (t) of the Guaranty are true and complete to the
same extent as if such statements were set forth herein as being made
by the Borrower, and such representations and warranties, as to the
Borrower, are herein incorporated by reference and shall survive the
termination or cancellation of the Guaranty.
9.3 Repetition
The representations and warranties in Clause 9.1 and Clause 9.2 (and so
that the representation and warranty in Clause 9.1(f) shall for this
purpose refer to the then latest financial statements delivered to the
Agent under Clause 10.1) shall be deemed to be repeated by the Borrower
on and as of each Drawdown Date as if made with reference to the facts
and circumstances existing on each such day.
10. UNDERTAKINGS
10.1 Undertakings
The Borrower undertakes with each of the Banks and the Agent that, from
the date of this Agreement and so long as any moneys are owing under
this Agreement and while all or any part of the Commitments remains
outstanding, it will:
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(a) Notice of Default
promptly inform the Agent of any occurrence of which it
becomes aware which might adversely affect its ability to
perform its obligations under this Agreement and of any
Default immediately on becoming aware of it and will from time
to time, if so requested by the Agent, confirm to the Agent
that, except as otherwise stated in that confirmation, no
Default has occurred and is continuing;
(b) Use of proceeds
use the Advances exclusively for the purposes specified in
Clause 1.1;
(c) Pari passu
ensure that its obligations under this Agreement shall,
without prejudice to the provisions of Clause 10.2, at all
times rank at least pari passu with all its other present and
future unsecured and unsubordinated Indebtedness;
(d) Financial statements
prepare financial statements in accordance with generally
accepted accounting principles and practices in Japan
consistently applied in respect of each financial year and
cause the same to be reported on by its auditors and prepare
unaudited financial statements in respect of each quarter in
accordance with GAAP and deliver sufficient copies of the same
to the Agent for distribution to all the Banks as soon as
practicable but not later than 100 days (in the case of
audited financial statements) or 55 days (in the case of
unaudited financial statements) after the end of the financial
period to which they relate;
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(e) Delivery of reports
deliver to the Agent, for distribution to the Banks,
sufficient copies for all the Banks of every report, circular,
notice or like document issued by the Borrower to its
creditors generally, at the time of issue thereof;
(f) Pension schemes
ensure that the levels of contribution to the pension schemes
for the time being operated by the Borrower are and continue
to be sufficient to cover the liabilities of such schemes in
full to the extent contributions to cover such liabilities are
permitted or will not result in taxation on participants
thereof in the year in which contribution is made; and
(g) Additional Undertakings incorporated by reference
to the extent provided in the Guaranty as covenants of the
Guarantor to cause the Borrower or any Subsidiary to comply
with the covenants set forth in subsections 11(b), (c), (d),
(e), (f), (g), (h), (i), (k) and (m) of the Guaranty,
undertake to comply with such covenants to the same extent as
if such covenants were set forth herein as covenants of the
Borrower, and such covenants with respect to the Borrower are
hereby incorporated herein by reference, mutatis mutandis, as
being covenants of the Borrower and shall survive the
termination or cancellation of the Guaranty.
10.2 Pledges
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The Borrower undertakes with each of the Banks and the Agent that, from
the date of this Agreement and so long as any moneys are owing under
this Agreement and while all or any part of the Commitments remains
outstanding, without the prior written consent of the Agent acting on
the instructions of the Majority Banks:
(a) Negative pledge
it will not create, incur, assume or suffer to exist any Lien
upon or with respect to any of its properties, revenues or
assets, whether now owned or hereafter acquired, other than
Permitted Liens and other Liens that are not prohibited by
Section 12(a) of the Guaranty; and
(b) Additional Pledges incorporated by reference
to the extent provided in the Guaranty as being covenants of
the Guarantor not to permit the Borrower or any Subsidiary to
take certain actions, the Borrower will undertake to comply
with the covenants set forth in subsections 12(b), (c), (d),
(e), (f) and (g) of the Guaranty, to the same extent as if
such covenants were set forth herein as covenants of the
Borrower, and such covenants with respect to the Borrower are
hereby incorporated herein by reference, mutatis mutandis, as
being covenants of the Borrower and shall survive the
termination or cancellation of the Guaranty.
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11. EVENTS OF DEFAULT
11.1 Events of Default
Each of the events and circumstances set out below is an Event of
Default (whether or not caused by any reason outside the control of the
Borrower or the Guarantor):
(a) Non-payment: the Borrower fails to pay in Yen any principal or
interest due from it under this Agreement, at the time and in
the manner stipulated in this Agreement, or any other sum due
from it under this Agreement, in the manner stipulated in this
Agreement and within five Banking Days (each of which shall be
a day on which commercial banks are open for business in
California) of the due date; or
(b) Breach of certain obligations: the Borrower commits any breach
of or omits to observe any of the obligations or undertakings
expressed to be assumed by it under Clause 10.2 (subject, in
the case of the covenants incorporated by reference in Clause
10.2(b), to such grace period, if any, as may be available
under the Guaranty with respect to such covenants); or
(c) Breach of other obligations: the Borrower commits any breach
of or omits to observe any of the obligations or undertakings
expressed to be assumed by it under this Agreement (other than
failure to pay any sum when due or any breach of the
provisions of Clause 10.2) and, in respect of any such breach
or omission which in the opinion of the Majority Banks is
capable of remedy, such breach or omission shall continue for
30 or more days after the occurrence of such default; or
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(d) Repudiation: the Borrower repudiates this Agreement or does or
causes or permits to be done any act or thing evidencing an
intention to repudiate this Agreement; or
(e) Guaranty effective: the Guaranty ceases to be (or the
Guarantor claims that the Guaranty has ceased to be) in full
force and effect; or
(f) Guaranty default: any Event of Default (as defined in the
Guaranty) occurs under the Guaranty; or
(g) Suspension by clearing house: the official clearing house for
the settlement of promissory notes in observance of its rules
takes procedures for suspension of the Borrower's transactions
with banks and similar institutions.
11.2 Acceleration
The Agent may, or if so instructed by the Majority Banks, shall,
without prejudice to any other rights of the Banks, at any time after
the happening of an Event of Default so long as the same is continuing
by notice to the Borrower declare that:
(a) the obligation of each Bank to make its Commitment available
shall be terminated and the Commitments shall then immediately
be reduced to zero; and/or
(b) all outstanding Advances and all interest, agency fee, and
commitment fee accrued and all other sums payable under this
Agreement have become immediately due and payable or have
become due and payable on demand, whereupon the same shall,
immediately or in accordance with the terms of that notice,
become so due and payable;
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provided that, upon the occurrence of any Event of Default described in
Section 14(e) or Section 14(f) of the Guaranty, the result which would
otherwise occur only upon declaration by the Agent shall occur
automatically, without the necessity of any action by the Agent or the
Banks.
On or at any time after the making of any such declaration, the Agent
shall be entitled, to the exclusion of the Borrower (and without
prejudice to Clause 5.2), to select the duration of Interest Periods.
11.3 Demand basis
If, pursuant to Clause 11.2(b), the Agent declares all outstanding
Advances to be due and payable on demand then, at any time thereafter,
the Agent may, or, if so instructed by the Majority Banks, shall, by
written notice to the Borrower (a) call for repayment of the Advances
on such date as may be specified in that notice and the Advances shall
become due and payable on the date so specified together with all
interest, agency fee, and commitment fee accrued and all other sums
payable under this Agreement or (b) withdraw that declaration with
effect from the date specified in the notice.
12. INDEMNITIES
12.1 Broken funding and other indemnities
The Borrower shall on demand indemnify each Bank, the Arranger and the
Agent, without prejudice to any of their other respective rights under
this Agreement, against any loss or expense which such Bank, the
Arranger or the Agent shall certify as having been sustained or
incurred by it as a consequence of:
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(a) any default in payment by the Borrower of any sum under this
Agreement when due;
(b) the occurrence of any other Event of Default or any
acceleration pursuant to Clause 11.2;
(c) any prepayment of any Advance or part thereof being made under
Clause 6.2, Clause 6.3 or Clause 13.1 otherwise than on
Interest Payment Date; or
(d) any Advance not being made for any reason (excluding any
default by the Agent, the Arranger or any Bank) after a
Drawdown Notice has been given,
including, in any such case, any loss or expense sustained or incurred
by such Bank in maintaining or funding its Contribution or any part
thereof or in liquidating or re-employing deposits from third parties
acquired or contracted for to fund its Contribution or any part thereof
or any other amount owing to such Bank.
12.2 Currency indemnity
If any sum due from the Borrower under this Agreement or any order or
judgment given or made in relation hereto has to be converted from the
currency (the "first currency") in which the same is payable under this
Agreement or under such order or judgment into another currency (the
"second currency") for the purpose of (a) making or filing a claim or
proof against the Borrower, (b) obtaining an order or judgment in any
court or other tribunal or (c) enforcing any order or judgment given or
made in relation to this Agreement, the Borrower shall indemnify and
hold harmless the Agent, the Arranger and each Bank from and against
any loss suffered as a result of any difference between (i) the rate of
exchange used for such purpose to convert the sum in question from the
first
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currency into the second currency and (ii) the rate or rates of
exchange at which the Agent, the Arranger or such Bank may in the
ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or
in part, of any such order, judgment, claim or proof. Any amount due
from the Borrower under this Clause 12.2 shall be due as a separate
debt and shall not be affected by judgment being obtained for any other
sums due under or in respect of this Agreement and the term "rate of
exchange" includes any premium and costs of exchange payable in
connection with the purchase of the first currency with the second
currency.
13. UNLAWFULNESS AND INCREASED COSTS
13.1 Unlawfulness
If it is or becomes contrary to any law or regulation for any Bank to
contribute to Advances or to maintain its Commitment or fund its
Contribution, that Bank shall promptly, through the Agent, notify the
Borrower and then (a) that Bank's Commitment shall be reduced to zero
and (b) the Borrower shall be obliged to prepay the Contribution of
that Bank not later than upon expiration of the relevant Interest
Period or, if earlier, on such date as may be required by the
applicable change in law or regulation.
13.2 Increased costs
If the result of any change occurring after December 1, 1995 in, or in
the interpretation or application of, or the introduction of, any law
(including those relating to Taxation, capital adequacy, liquidity,
reserve assets and special deposits) is to:
(a) subject any Bank to Taxes or change the basis of Taxation of
any Bank with respect to any payment under this Agreement
(other than Taxes or Taxation on the
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overall net income, profits or gains of that Bank imposed in
the jurisdiction in which its principal or lending office
under this Agreement is located); and/or
(b) increase the cost to, or impose an additional cost on, any
Bank in making or keeping its Commitment available or
maintaining or funding its Contribution; and/or
(c) reduce the amount payable or the effective return to any Bank
under this Agreement; and/or
(d) reduce any Bank's rate of return on its capital by reason of a
change in the manner in which it is required to allocate
capital resources to its obligations under this Agreement;
and/or
(e) require any Bank to make a payment or forgo a return on or
calculated by reference to any amount received or receivable
by it under this Agreement,
then and in each such case :
(i) that Bank shall notify the Borrower through the Agent
in writing of that event promptly upon its becoming
aware of the same; and
(ii) the Borrower shall on demand, made at any time
whether or not the relevant Bank's Contribution has
been repaid, pay to the Agent for the account of the
Bank the amount which the Bank specifies (in a
certificate setting forth the basis of the
computation of such amount but not including any
matters which that Bank regards as confidential) is
required to
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compensate the Bank for that increased cost,
reduction, payment or forgone return.
14. SET-OFF AND PRO RATA PAYMENTS
14.1 Set-off
The Borrower authorises each Bank to apply any credit balance to which
the Borrower is then entitled on any account of the Borrower with the
Bank at any of its branches in or towards satisfaction of any sum then
due and payable from the Borrower to the Bank under this Agreement. For
this purpose each Bank is authorised to purchase with the moneys
standing to the credit of any such account such other currencies as may
be necessary to effect that application. None of the Banks shall be
obliged to exercise any right given to it by this Clause 14.1. Each
Bank shall notify the Agent and the Borrower immediately on the
exercise or purported exercise of any right of set-off, giving full
details in relation thereto and the Agent shall inform the other Banks.
The provisions of this Clause 14.1 shall apply without prejudice to the
Banks' rights under the Account Pledges.
14.2 Pro rata payments
(a) If at any time any Bank (the "Recovering Bank") receives or
recovers any amount owing to it by the Borrower under this
Agreement by direct payment, set-off or in any manner other
than by exercise of its rights under the relevant Collateral
Agreement or the relevant Account Pledge (as the case may be)
and other than by payment through the Agent pursuant to Clause
8.1 or Clause 8.11, the Recovering Bank shall, within two
Banking Days of such receipt or recovery (a "Direct Receipt")
notify the Agent of the amount of the Direct Receipt. If the
Direct Receipt exceeds the amount which the Recovering Bank
would have received if the
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Direct Receipt had been received by the Agent and distributed
pursuant to Clause 8.1 or Clause 8.11 (as the case may be)
then:
(i) within two Banking Days of demand by the Agent, the
Recovering Bank shall pay to the Agent an amount
equal (or equivalent) to the excess;
(ii) the Agent shall treat the excess amount so paid by
the Recovering Bank as if it were a payment made by
the Borrower and shall distribute the same to the
Banks (other than the Recovering Bank) in accordance
with Clause 8.1 or Clause 8.11, as appropriate; and
(iii) as between the Borrower and the Recovering Bank the
excess amount so re-distributed shall be treated as
not having been paid but the obligations of the
Borrower to the other Banks shall, to the extent of
the amount so re-distributed to them, be treated as
discharged.
(b) If any part of the Direct Receipt subsequently has to be
wholly or partly refunded by the Recovering Bank each Bank to
which any part of such Direct Receipt was so re-distributed
shall on request from the Recovering Bank repay to the
Recovering Bank its pro rata share of the amount which has to
be refunded by the Recovering Bank.
(c) Each Bank shall on request supply to the Agent such
information as the Agent may from time to time request for the
purpose of this Clause 14.2.
(d) Any amount received or recovered by a Bank under a novation,
assignment, sub-participation (or the like) shall be ignored
for the purpose of this Clause 14.2.
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15. ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES
15.1 Benefit and burden
This Agreement shall be binding upon, and enure for the benefit of, the
Banks, the Arranger, the Agent and the Borrower and their respective
successors and Substitutes.
15.2 No assignment by Borrower
The Borrower may not assign, transfer or otherwise dispose of any of
its rights or obligations under this Agreement.
15.3 Participation
Any Bank may, in its absolute discretion and without any requirement to
obtain the consent of or to give notice or any information to any other
party, grant one or more participating interests in its proportion of
the Loan to any third party (a "Participant"). The granting of such a
participating interest shall not affect the relevant Bank's rights and
obligations under this Agreement nor shall the Participant acquire any
rights or assume any obligations under this Agreement other than with
the agreement of the Borrower and the Agent.
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15.4 Substitution
Otherwise than in accordance with this Clause 15.4, each Bank may not
assign all or any of its rights hereunder. Each Bank (a "Transferring
Bank") may, in its absolute discretion and without any requirement to
obtain the consent of any other party (other than the consent of the
Agent and the Borrower, which consent shall not be unreasonably
withheld or delayed), transfer, by way of novation, all or any part of
its rights, benefits and/or obligations under this Agreement to another
person (a "Substitute"). Any such novation shall be effected on 5
Banking Days' prior notice by delivery to the Agent of a duly completed
Substitution Certificate duly executed by the Transferring Bank and the
Substitute (which the Agent shall promptly execute for itself, the
Borrower and the other Banks (the "other parties")). Subject to the
execution of that Substitution Certificate by all parties to it, on the
effective date specified in a Substitution Certificate, to the extent
that they are expressed in that Substitution Certificate to be the
subject of the novation effected pursuant to this Clause 15.5:
(a) the other parties and the Transferring Bank shall be released
from their respective obligations towards one another under
this Agreement (the "discharged obligations") and their
respective rights against one another under this Agreement
(the "discharged rights") shall be cancelled;
(b) the relevant Substitute and the other parties shall assume
obligations towards each other which differ from the
discharged obligations only insofar as they are owed to or
assumed by that Substitute instead of to or by the
Transferring Bank; and
(c) the relevant Substitute and the other parties shall acquire
rights against each other which differ from the discharged
rights only insofar as they are exercisable by or against such
Substitute instead of by or against the Transferring Bank
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and, on the date upon which such novation takes effect, the Substitute
shall pay to the Agent for its own account a fee of (yen)250,000. The
Agent shall promptly notify the other parties of the receipt by it of
any Substitution Certificate and shall promptly deliver a copy of that
Substitution Certificate to the Borrower.
15.5 Reliance on Substitution Certificate
The Agent and the Borrower may rely on any Substitution Certificate
delivered to the Agent in accordance with the foregoing provisions of
this Clause 15 which is complete and regular on its face as regards its
contents and purportedly signed on behalf of the Transferring Bank and
the Substitute and neither the Agent nor the Borrower shall have any
liability or responsibility to any party as a consequence of placing
reliance on and acting in accordance with any such Substitution
Certificate if it proves to be the case that the same was not authentic
or duly authorised.
15.6 Authorisation of Agent
The Borrower and each Bank irrevocably authorises the Agent to
counter-sign each Substitution Certificate on its behalf without any
further consent of, or consultation with, the Borrower or such Bank.
15.7 Construction of certain references
If any Bank novates any of its rights, benefits and obligations as
provided in Clause 15.4 all relevant references in this Agreement to
such Bank shall thereafter be construed as a reference to that Bank
and/or its Substitute (as the case may be) to the extent of their
respective interests.
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15.8 Lending offices
Each Bank shall lend through its office at the address specified in
Schedule 1 or, as the case may be, in any relevant Substitution
Certificate or through any other office of that Bank selected from time
to time by that Bank through which such Bank wishes to lend for the
purposes of this Agreement. If the office through which a Bank is
lending is changed pursuant to this Clause 15.8, the Bank shall notify
the Agent promptly of that change. A Bank shall use its reasonable best
efforts (consistent with legal and regulatory restrictions) not to
elect a lending office that, at the time of making such election,
increases the amounts which would have been payable by the Borrower to
such Bank under this Agreement in the absence of such election, unless,
in the sole judgment of such Bank, it would be advantageous to the Bank
to elect such lending office.
15.9 Disclosure of information; Confidentiality
Any Bank may disclose to a prospective transferee or Substitute or to
any other Person who may propose entering into contractual relations
with that Bank in relation to this Agreement such information about the
Borrower as the Bank shall consider appropriate. Each Bank agrees to
take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all non-public information identified
as "confidential" or "secret" by the Borrower or the Guarantor and
provided to it by the Borrower, the Guarantor or any Subsidiary of the
Guarantor in connection with this Agreement, or any other Loan
Document, and neither the Bank nor any of its Affiliates shall use any
such information for any purpose or in any manner other than pursuant
to the terms contemplated by this Agreement or in enforcement of this
Agreement or the other Loan Documents; except to the extent such
information (i) was or becomes generally available to the public other
than as a result of a disclosure by the Bank, or (ii) was or becomes
available on a non-confidential basis from a source other than the
Borrower, the Guarantor
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or a Subsidiary of the Guarantor, provided that such source is not
bound by a confidentiality agreement with the Borrower; provided,
further, however, that any Bank may disclose such information (A) at
the request or pursuant to any requirement of any Governmental
Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to
subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable law; (D) to the extent
reasonably required in connection with any litigation or proceeding to
which the Arranger, Agent, any Bank or their respective Affiliates may
be party; (E) to the extent reasonably required in connection with the
exercise of any remedy hereunder or under any other Loan Document; (F)
to any Participant or Substitute, actual or potential, provided that
such Person agrees in writing to keep such information confidential to
the same extent required of the Banks hereunder; (G) as to any Bank, as
expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Borrower is party or is deemed
party with such Bank; and (H) to such Bank's independent auditors and
other professional advisors. The provisions of this Clause 15.9 shall
not preclude the Borrower, in any situation described in clauses (B),
(C) or (D) above, from contesting in any legal manner any order or
requirement to disclose such information or seeking to impose limits on
such disclosure.
16. ARRANGER, AGENT AND REFERENCE BANKS
16.1 Appointment of Agent
Each Bank irrevocably appoints the Agent as its agent for the purposes
of this Agreement and authorises the Agent (whether or not by or
through employees or agents) to take such action on such Bank's behalf
and to exercise such rights, remedies, powers and discretions as are
specifically delegated to the Agent by this Agreement, together with
such powers and discretions as are reasonably incidental thereto.
Neither the Agent nor the Arranger
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shall, however, have any duties, obligations or liabilities to the
Banks beyond those expressly stated in this Agreement.
16.2 Amendments; Waivers
(a) Subject to Clause 16.2(b), the Agent may, with the consent of
the Majority Banks (or if and to the extent expressly
authorised by the other provisions of this Agreement), (i)
agree to amendments or modifications to this Agreement with
the Borrower and/or (ii) vary or waive breaches of, or
defaults under, or otherwise excuse performance of, any
provision of this Agreement by the Borrower. Any such action
so authorised and effected by the Agent shall be documented in
such manner as the Agent shall (with the approval of the
Majority Banks) determine, shall be promptly notified to the
Banks by the Agent and shall be binding on all the Banks.
(b) Except with the prior written consent of all the Banks, the
Agent shall not have authority on behalf of the Banks to agree
with the Borrower to any amendment or modification to this
Agreement or to grant waivers in respect of breaches or
defaults or to vary or excuse performance of or under this
Agreement by the Borrower, if the effect of such amendment,
modification, waiver, variation or excuse would be to (i)
reduce any applicable Margin, (ii) postpone the due date or
reduce the amount of any payment of principal, interest or
other amount payable by the Borrower under this Agreement,
(iii) change the currency in which any amount is payable by
the Borrower under this Agreement, (iv) increase any Bank's
Commitment, (v) extend the Availability Period, (vi) change
the definition of "Majority Banks" in Clause 1.2, (vii) change
any provision of this Agreement which expressly or impliedly
requires the approval or consent of all the Banks such that
the relevant approval or consent may be given otherwise than
with the sanction
57.
64
of all the Banks, (viii) change the order of distribution
under Clause 8.11, (ix) change Clause 14.2 or (x) change this
Clause 16.2.
16.3 Rights of Agent as Bank; No partnership
With respect to its own Commitment and Contribution (if any) the Agent
shall have the same rights and powers under this Agreement as any other
Bank and may exercise the same as though it were not performing the
duties and functions delegated to it under this Agreement and the term
"Banks" shall, unless the context clearly otherwise indicates, include
the Agent in its individual capacity as a Bank. This Agreement shall
not and shall not be construed so as to constitute a partnership
between the parties or any of them.
16.4 No liability of Arranger and Agent
Neither the Arranger nor the Agent shall:
(a) be obliged to request any certificate or opinion under Clause
3.4 or Clause 10.1 or to make any enquiry as to the use of the
proceeds of the Loan unless (in the case of the Agent) so
required in writing by any Bank, in which case the Agent shall
promptly make the appropriate request of the Borrower, or be
obliged to make any enquiry as to any default by the Borrower
in the performance or observance of any of the provisions of
this Agreement or as to the existence of a Default unless (in
the case of the Agent) the Agent has actual knowledge thereof
or has been notified in writing thereof by a Bank, in which
case the Agent shall promptly notify the Banks of the relevant
event or circumstance; or
58.
65
(b) be liable to any Bank for any action taken or omitted under or
in connection with this Agreement or the Facility unless
caused by its gross negligence or wilful misconduct.
For the purposes of this Clause 16 the Agent shall not be treated as
having actual knowledge of any matter of which the corporate finance or
any other division outside the agency or loan administration department
of the person for the time being acting as the Agent may become aware
in the context of corporate finance, advisory or lending activities
from time to time undertaken by the Agent for the Borrower or any of
its Subsidiaries or associated companies or any other person which may
be a trade competitor of the Borrower or may otherwise have commercial
interests similar to those of the Borrower.
16.5 Agent's duty to notify and take action
The Agent shall:
(a) promptly notify each Bank of the contents of each notice,
certificate or other document received by the Agent from the
Borrower under or pursuant to Clauses 10.1(a) or 10.1(e); and
(b) (subject to its being indemnified to its satisfaction) take
such action or, as the case may be, refrain from taking such
action with respect to any Default of which the Agent has
actual knowledge as the Majority Banks may reasonably direct.
16.6 Identity of Banks
The Agent may deem and treat (a) each Bank as the person entitled to
the benefit of the Contribution of such Bank for all purposes of this
Agreement unless and until a
59.
66
Substitution Certificate shall have been filed with the Agent, and (b)
the office set opposite the name of each Bank in Schedule 1 or, as the
case may be, in any relevant Substitution Certificate as such Bank's
lending office unless and until a written notice of change of lending
office shall have been received by the Agent; and the Agent may act
upon any such notice unless and until the same is superseded by a
further such notice.
16.7 Non-reliance on Arranger or Agent
Each Bank acknowledges that it has not relied on any statement,
opinion, forecast or other representation made by the Arranger or the
Agent to induce it to enter into this Agreement and that it has made
and will continue to make, without reliance on the Agent or the
Arranger and based on such documents as it considers appropriate, its
own appraisal of the creditworthiness of the Borrower and its own
independent investigation of the financial condition and affairs of the
Borrower in connection with the making and continuation of any Advances
under this Agreement. Neither the Arranger nor the Agent shall have any
duty or responsibility, either initially or on a continuing basis, to
provide any Bank with any credit or other information with respect to
the Borrower whether coming into its possession before the making of
any Advance or at any time or times thereafter, other than (in the case
of the Agent) as provided in Clause 16.5(a).
16.8 No Responsibility on Arranger or Agent for Borrower's performance
Neither the Arranger nor the Agent shall have any responsibility to any
Bank on account of the failure of the Borrower or the Guarantor to
perform its obligations under this Agreement or the Guaranty or for the
financial condition of the Borrower or the Guarantor or for the
completeness or accuracy of any statements, representations or
warranties in this Agreement or the Guaranty or the Information
Memorandum or any document delivered under this Agreement or for the
execution, effectiveness, adequacy, genuineness, validity,
60.
67
enforceability or admissibility in evidence of this Agreement or of any
certificate, report or other document executed or delivered under this
Agreement or otherwise in connection with the Facility or its
negotiation or for acting (or, as the case may be, refraining from
acting) in accordance with the instructions of the Majority Banks. The
Arranger and the Agent shall be entitled to rely on any communication,
instrument or document believed by it to be genuine and correct and to
have been signed or sent by the proper person and shall be entitled to
rely as to legal or other professional matters on opinions and
statements of any legal or other professional advisers selected or
approved by it.
16.9 Other dealings
The Arranger and the Agent may, without any liability to account to the
Banks, accept deposits from, lend money to, and generally engage in any
kind of banking or trust business with, the Borrower or any of its
Subsidiaries or associated companies or any of the Banks as if it were
not the Arranger or the Agent as the case may be.
16.10 Reimbursement and indemnity by Banks
Each Bank shall reimburse the Arranger and the Agent (rateably in
accordance with such Bank's Commitment or Contribution), to the extent
that the Arranger or the Agent is not reimbursed by the Borrower or the
Guarantor, for the charges and expenses incurred by the
Arranger and the Agent in connection with the contemplation of, or
otherwise in connection with, the enforcement of, or the preservation
of any rights under, or in carrying out its duties under, this
Agreement including (in each case) the fees and expenses of legal or
other professional advisers. Each Bank shall indemnify the Agent
(rateably in accordance with its Commitment or Contribution) against
all liabilities, damages, costs and claims whatsoever incurred by the
Agent in connection with this Agreement or the performance of its
duties under this Agreement or any action taken or omitted by the
61.
68
Agent under this Agreement, unless such liabilities, damages, costs or
claims arise from the Agent's own gross negligence or wilful
misconduct.
16.11 Retirement of Agent
(a) The Agent may retire from its appointment as Agent under this
Agreement having given to the Borrower and each of the Banks
not less than 30 days' notice of its intention to do so,
provided that no such retirement shall take effect unless
there has been appointed by the Agent as a successor agent:
(i) a Bank nominated by the Majority Banks or, failing
such a nomination,
(ii) any reputable and experienced bank or financial
institution with offices in Tokyo and nominated by
the Agent,
which shall have consented to such appointment.
(b) On any such successor being appointed, the retiring Agent
shall be discharged from any further obligation under this
Agreement and its successor and each of the other parties to
this Agreement shall have the same rights and obligations
among themselves as they would have had if such successor had
been a party to this Agreement in place of the retiring Agent.
16.12 Change of Reference Banks
If (a) the whole of the Contribution (if any) of any Reference Bank is
prepaid, (b) the Commitment (if any) of any Reference Bank is reduced
to zero in accordance with Clause 6.3 or Clause 13.1 or (c) a Reference
Bank assigns and/or novates the whole of its
62.
69
rights and obligations (if any) as a Bank under this Agreement or (d)
any Reference Bank ceases to provide quotations to the Agent for the
purposes of determining LIBOR, the Agent may, acting on the
instructions of the Majority Banks (which for this purpose shall not
include the relevant Reference Bank), terminate the appointment of such
Reference Bank and appoint another Bank to replace such Reference Bank.
16.13 Variation of Exhibits
The Agent may require such changes to any of the Exhibits as are
reasonable, in the opinion of the Agent after consultation with the
Banks, to protect the interests of the Banks under this Agreement.
17. NOTICES AND OTHER MATTERS
17.1 Notices
Every notice, request, demand or other communication under this
Agreement shall:
(a) be in writing delivered personally or by prepaid letter
(airmail if the addressee is abroad), telex or telefax;
(b) be deemed to have been received, subject as otherwise provided
in this Agreement, in the case of a letter when delivered
personally or 2 business days after it has been put into the
post (7 business days if delivered through international
airmail), in the case of a telex, at the time of despatch with
confirmed answerback of the addressee appearing at the
beginning and end of the transmission and, in the case of a
telefax, when a complete and legible copy is received by the
addressee (provided that if the date of receipt of a letter is
not a business day in the country of the addressee or
63.
70
if the time of receipt of any telex or telefax is after the
close of business in the country of the addressee it shall be
deemed to have been received at the opening of business on the
next such business day); and
(c) be sent to the addressee at the relevant address telex number
or telefax number stated in Schedule 1 or to such other
address, telex number or telefax number as has been notified
by the addressee to the other parties.
17.2 Notices through the Agent
Every communication under this Agreement to be given by the Borrower to
any other party shall be given to the Agent for onward transmission as
appropriate and to be given to the Borrower shall (except as otherwise
provided in this Agreement) be given by the Agent.
17.3 No implied waivers, remedies cumulative
No failure or delay on the part of the Agent, the Arranger, the Banks
or any of them to exercise any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise by the Agent, the Arranger, the Banks or any of them
of any power, right or remedy preclude any other or further exercise
thereof or the exercise of any other power, right or remedy. The
remedies provided in this Agreement are cumulative and are not
exclusive of any remedies provided by law.
17.4 English language
This Agreement is made in and shall be construed in the English
language; all certificates, instruments and other documents to be
delivered under or supplied in connection with this
64.
71
Agreement shall be in the English language; provided that, to the
extent that (a) any corporate document of the Borrower is in the
ordinary course of its business prepared in Japanese or (b) any
instrument or other document issued by a Governmental Authority is in
Japanese, such documents shall be delivered hereunder in Japanese and,
if appropriate, shall be accompanied by an English translation thereof.
Without limiting the generality of the foregoing, the Borrower's
certificate of seal impression and the certified copy of the commercial
registry of the Borrower need not be accompanied by their English
translations.
18. GOVERNING LAW AND JURISDICTION
18.1 Governing Law
This Agreement shall be governed by, and construed in accordance with,
the laws of Japan.
18.2 Jurisdiction
(a) Each party irrevocably agrees that the Tokyo District Court
shall have jurisdiction to hear and determine any suit, action
or proceedings, and to settle any disputes, which may arise
out of or in connection with this Agreement and, for those
purposes, irrevocably submits to the jurisdiction of that
court.
(b) Each party irrevocably waives any objection which it might now
or hereafter have to the court referred to in Clause 18.2(a)
being nominated as the forum to hear and determine any suit,
action or proceedings, and to settle any disputes, which may
arise out of or in connection with this Agreement and agrees
not to claim that court is not a convenient or appropriate
forum.
65.
72
(c) The submission to the jurisdiction of the court referred to in
Clause 18.2(a) shall not (and shall not be construed so as to)
limit any right of any party to take proceedings against any
other party in any other court of competent jurisdiction nor
shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other
jurisdiction (whether concurrently or not) if and to the
extent permitted by applicable law.
(d) Each party consents generally in respect of any legal action
or proceedings arising out of or in connection with this
Agreement to the giving of any relief or the issue of any
process in connection with such action or proceedings
including the making, enforcement or execution against any
property whatsoever (irrespective of its use or intended use)
of any order or judgment which may be made or given in such
action or proceeding.
66.
73
IN WITNESS OF WHICH the parties have caused this Agreement to be duly executed
on the date first above written.
LSI LOGIC JAPAN SEMICONDUCTOR, INC.
By:
--------------------------
Name:
Title:
67.
74
ABN AMRO BANK N.V., as Arranger
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
68.
75
ABN AMRO BANK N.V., Tokyo Branch, as Agent and a
Bank
By:
--------------------------
Name:
Title:
69.
76
THE INDUSTRIAL BANK OF JAPAN, LIMITED, as
Co-Agent and a Bank
By:
----------------------------
Name:
Title:
70.
77
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By:
----------------------------
Name:
Title:
71.
78
THE SANWA BANK, LIMITED
By:
---------------------------
Name:
Title:
72.
00
XXX XXXX XX XXXX XXXXXX, Tokyo Branch
By:
----------------------------
Name:
Title:
73.
80
BANQUE NATIONALE DE PARIS, Tokyo Branch
By:
----------------------------
Name: Xxxxxx Xxxxx-Tannugi
Title: Executive Director
74.
00
XXXXXXXX XXXX XXX, Xxxxx Branch
By:
----------------------------
Name:
Title:
75.
82
XXXXXX GUARANTY TRUST COMPANY OF NEW
YORK
By: ____________________________________
Name:
Title:
76.
83
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By: ____________________________________
Name: Yoshimasa Osawa
Title: Representative Director
77.
84
THE SUMITOMO BANK, LTD.
By: ____________________________________
Name:
Title:
78.
85
Schedule 1
The Parties and the Commitments
A. The Borrower
1) Name: LSI Logic Japan Semiconductor, Inc.
2) Incorporated in: Japan
3) Principal Office: 00, Xxxxxxxx
Xxxxxxx-xxx
Xxxxxxx, Xxxxx
4) Fax: 00-000-00-0000
5) Notices to: LSI Logic Corporation
0000 XxXxxxxx Xxxxxxxxx
XX X-000
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
6) Notices for the attention of:
1. General Counsel
2. Treasurer
S-1-1
86
B. The Banks and their Commitments
Address, telex and Commitment
Name Telefax number (yen)
---- ------------------ ------
ABN AMRO Bank N.V. Lending Office: 4,000,000,000
--------------
Tokyo Branch
00X, Xxxxxxxxx XX Xxxx
Xxxxxxxx
0-0-0, Xxxxxxxxx
Xxxxxx-xx, Xxxxx 000
Xxxxx
Attn: Structured Finance
Tel: 00-0-0000-0000
Fax: 00-0-0000-0000/6363
Notices to:
Same as above.
S-1-2
87
B. The Banks and their Commitments
Address, telex and Commitment
Name Telefax number (yen)
---- ------------------ ------
The Industrial Bank of Lending Office: 3,500,000,000
Japan, Limited --------------
0-0 Xxxxxxxxxx 0-xxxxx
Xxxxxxx-xx, Xxxxx 000
Xxxxx
Attn: Xx. Xxxxxxxx
Xxxx/Xx. Xxxxx
Xxxxxxxx
Foreign Corporations
Group, Corporate Banking
Department (Multinational)
Tel: 00-0-0000-0000
Fax: 00-0-0000-0000
Notices to:
Same as above.
S-1-3
88
B. The Banks and their Commitments
Address, telex and Commitment
Name Telefax number (yen)
---- ------------------ ------
Bank of America National Lending Office: 2,000,000,000
Trust and Savings --------------
Association Tokyo Branch
ARK Mori Xxxx.
0-00-00 Xxxxxxx
Xxxxxx-xx
Xxxxx 000, Xxxxx
Attn: Xx. Xxxxx Xxxxxxxxx
Tel: 00-0-0000-0000
Fax: 00-0-0000-0000
Telex: J22272 BANKOAM
Notices to:
----------
As to administrative
matters and wiring
instructions, same
as above. As to other
matters:
ARK Mori Xxxx.
0-00-00 Xxxxxxx
Xxxxxx-xx
Xxxxx 000, Xxxxx
Attn: Xxxxxxx Xxxxxx
Relationship Manager
Tel: 00-0-0000-0000
Fax: 00-0-0000-0000
S-1-4
89
B. The Banks and their Commitments
Address, telex and Commitment
Name Telefax number (yen)
---- ------------------ ------
The Sanwa Bank, Limited Lending Office: 3,000,000,000
--------------
International Finance
Dept., Tokyo
0-0-0, Xxxxxxxx
Xxxxxxx-xx
Xxxxx 000, Xxxxx
Attn: Structured Finance
Group
Tel: 00-0-0000-0000 Fax:
00-0-0000-0000
Notices to:
Same as above
S-1-5
90
B. The Banks and their Commitments
Address, telex and Commitment
Name Telefax number (yen)
---- ------------------ ------
The Bank of Nova Scotia Lending Office: 2,000,000,000
--------------
Tokyo Branch
Fukoku Seimei Building
21st Floor
2-2 Uchisaiwaicho 2-chome
Xxxxxxx-xx
Xxxxx 000, Xxxxx
Attn: Xxxxxx X. Xxxxx,
Vice President
Tel: 00-0-0000-0000
Fax: 00-0-0000-0000
Notices to:
Same as above
S-1-6
91
B. The Banks and their Commitments
Address, telex and Commitment
Name Telefax number (yen)
---- -------------- -----
Banque Nationale de Paris Lending Office: 2,000,000,000
Tokyo Branch
Shiroyama XX Xxxx
Building, 23rd Floor
3-1 Toranomon 4-chome
Minato-ku, Tokyo 000
Xxxxx
Attn: Xxxxxx Xxxxx Tannugi,
Executive
Director and Xxxxxxx Xxxxx,
Vice President
Tel: 00-0-0000-0000
Fax: 00-0-0000-0000
Notices to:
Same as above, with copy
to:
Banque Nationale de Paris
San Xxxxxxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx
Attn: Xxxxxx Xxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
S-1-7
92
B. The Banks and their Commitments
Address, telex and Commitment
Name Telefax number (yen)
---- ------------------ ------
Barclays Bank PLC Lending Office: 2,500,000,000
--------------
Tokyo Branch
15th Floor Urbannet Otemachi
Building
0-0-0 Xxxxxxxx, Xxxxxxx-xx
Xxxxx 000, Xxxxx
Attn: Satoaki Takahashi
Director
Tel: 00-0-0000-0000
Fax: 00-0-0000-0000
Telex: 24968 BARGROUPJ J
Notices to:
Same as above.
S-1-8
93
B. The Banks and their Commitments
Address, telex and Commitment
Name Telefax number (yen)
---- ------------------ ------
Xxxxxx Guaranty Trust Lending Office: 2,000,000,000
Company of New --------------
York Akasaka Park Building
0-00, Xxxxxxx 0-xxxxx
Xxxxxx-xx
Xxxxx 000 Xxxxx
Attn: Xxxxxxx Xxxxxx
Vice President,
Global Credit
Tel: 00-0-0000-0000
Fax: 00-0-0000-0000
Notices to:
Same as above.
S-1-9
94
B. The Banks and their Commitments
Address, telex and Commitment
Name Telefax number (yen)
---- ------------------ ------
The Long-Term Credit Bank Lending Office: 2,000,000,000
of Japan, Ltd. --------------
Tokyo Branch
1-6 Yaesu 0
Xxxx-xx
Xxxxx 000, Xxxxx
Attn: Tokyo Corporate
Finance Division I
Tel: 00-0-0000-0000
Fax: 00-0-0000-0000
Notices to:
Same as above
S-1-10
95
B. The Banks and their Commitments
Address, telex and Commitment
Name Telefax number (yen)
---- ------------------ ------
The Sumitomo Bank, Ltd. Lending Office: 2,000,000,000
--------------
Yotsuya Branch
0-0-0 Xxxxxxx
Xxxxxxxx-xx
Xxxxx 000, Xxxxx
Tel: 00-0-0000-0000
Fax:_______________
Notices to:
Same as above
S-1-11
96
C. The Agent
1) Name: ABN AMRO BANK N.V., Tokyo Branch
2) Incorporated in:
3) Principal Office: 00X, Xxxxxxxxx XX Xxxx Xxxxxxxx
0-0-0, Xxxxxxxxx, Xxxxxx-xx
Xxxxx 000, Xxxxx
4) Telex:
5) Fax: 00-0-0000-0000/6363
6) Notices to: [If different from 3)-5)]
7) Notices for the attention of: Structured Finance
8) Payment Account
Bank: The Sakura Bank, Ltd.
Branch: Tokyo Main Office (Toukyo Eigyoubu)
Address:
A/c No: 0000000 (current account)
S-1-12
97
Schedule 2
Documents and evidence required as conditions precedent
A. Borrower
(a) A copy, certified as then true and complete and up-to-date as of the
Closing Date by a duly authorised office of the Borrower, of the
Articles of Incorporation of the Borrower.
(b) A copy, certified as a true copy by a duly authorised officer of the
Borrower, of resolutions of the Board of Directors of the Borrower
effective as of the Closing Date evidencing approval of this Agreement
and authorising its appropriate officers or attorney (as applicable) to
execute and deliver this Agreement and to give all notices and take all
other action required by the Borrower under this Agreement.
(c) Specimen signatures, authenticated by a duly authorised officer of the
Borrower, of the Persons authorised in the resolutions of the Board of
Directors referred to in paragraph (b) above together with the executed
Power of Attorney empowering that Person to execute and deliver this
Agreement and to give all notices and take all other action required by
the Borrower under this Agreement (if applicable).
S-2-1
98
(d) An opinion of legal advisers to the Borrower on Japanese law, dated the
Drawdown Closing Date of the first Advance, in a form satisfactory to
and previously approved by the Agent.
(e) An opinion of Nishimura & Sanada, special legal advisers in Japan to
the Agent and the Banks, dated the Drawdown Closing Date of the first
Advance, in a form satisfactory to and previously approved by the
Agent.
(f) A certified copy of the commercial registry and a certificate of seal
impression (each as of the Closing Date) of a representative director
of the Borrower executing this Agreement or the Power of Attorney
referred to above (as the case may be).
B. The Guarantor
(a) The Guaranty, executed by the Guarantor.
(b) Copies of the resolutions of the board of directors of the Guarantor
and other necessary corporate action authorizing the Guarantor to enter
into the Guaranty and the transactions contemplated thereby, certified
as of the Closing Date by the Secretary or Assistant Secretary of the
Guarantor; and
S-2-2
99
(c) A certificate of the Secretary or Assistant Secretary of the Guarantor
certifying as of the Closing Date the names and true signatures of the
officers of the Guarantor authorized to execute, deliver and perform,
as applicable, the Guaranty, and all other documents to be delivered by
it thereunder.
(d) The certificate or articles of incorporation and the bylaws of the
Guarantor as in effect on the Closing Date, certified by the Secretary
or Assistant Secretary of the Guarantor as of the Closing Date,
together with a good standing certificate from the Secretary of State
of its jurisdiction of incorporation, dated the Closing Date.
(e) An opinion dated the Drawdown Closing Date of the first Advance of
California counsel to the Guarantor and addressed to the Agent and the
Banks, in a form satisfactory to and previously approved by the Agent.
(f) An opinion dated the Drawdown Closing Date of the first Advance of
California counsel to the Agent and the Banks and addressed to the
Agent and the Banks, in a form satisfactory to and previously approved
by the Agent.
(g) A certificate signed by a Responsible Officer of the Guarantor, dated
the Drawdown Closing Date, stating that:
S-2-3
100
i. The representations and warranties contained in Section 10 of
the Guaranty are true and correct on and as of such date, as
though made on and as of such date;
ii. no "Default" or "Event of Default" exists or would result from
the execution and delivery of the Guaranty;
iii. no event or circumstance has occurred since 31 December 1994
that has resulted or could reasonably be expected to result in
a "Material Adverse Effect" (as defined in the Guaranty); and
iv. each of the documents previously delivered pursuant to this
Schedule 2, Part B remains true, complete and accurate.
(h) Evidence that as of the Closing Date all approvals or consent of any
other Person (including, if any, any necessary shareholder consents),
required in connection with the execution, delivery and performance of
the Guaranty and any other document to be executed and delivered by the
Guarantor shall have been obtained.
S-2-4
101
C. General
Such other confirmations, information or opinions as the Agent may have
previously reasonably requested in writing.
D. Delivery Dates
(a) Documents required by A(a), A(b), A(c), A(d), A(e), A(f),
B(a), B(b), B(c), B(d), B(e), B(f) and B(h) not earlier than
the fifth Banking Day nor later than the third Banking Day
prior to the date of the first Drawdown Date;
(b) The document required by B(g), not later than each Drawdown
Closing Date.
S-2-5
102
Exhibit 1
Form of Drawdown Notice
To: [Name and address of Agent]
Attention:
[Date]
(yen)25,000,000,000
Floating Rate Guaranteed Credit Facility
Agreement dated 27 December, 1995
We refer to the above Agreement and hereby give you notice that we wish
to draw an Advance of (yen)[ ],([ ] Yen) on 199[ ]. The funds should be
credited to [name and number of account] with [details of bank in Tokyo].
The first Interest Period in respect of this Advance shall have a
duration of [1][3][6] months and the interest rate thereon shall accrue at a
rate determined by reference to [TIBOR] [LIBOR].
1.
103
We confirm that:
(i) no event or circumstance has occurred and is
continuing which constitutes a Default, and no
Default shall occur as a result of the making of such
Advance;
(ii) the representations and warranties contained in
Clause 9 of the Agreement (and so that the
representation and warranty in Clause 9.1(f) refers
for this purpose to the audited financial statements
of the Borrower in respect of the financial year
ended on [ ] 199[ ]) and in Section 10 of the
Guaranty are true and correct at the date hereof as
if made with respect to the facts and circumstances
existing at such date; and
(iii) the borrowing to be effected by such Advance will be
within our corporate powers, has been validly
authorised by appropriate corporate action and will
not cause any limit on our borrowings (whether
imposed by statute, regulation, agreement or
otherwise) to be exceeded;
2.
104
(iv) there has been no material adverse change in our
financial position from that set out in the financial
statements for and as of 31 December 1994; and
(v) as at the most recent Margin Determination Date, the
Ratio is [ ] and the Debt Rating is [ ].
Words and expressions defined in the Agreement shall have the same
meanings where used herein.
For and on behalf of
LSI Logic Japan Semiconductor, Inc.
..............................
Name:
Title:
3.
105
Exhibit 2
Form of Guaranty
106
Exhibit 3
Form of Account Pledge
THIS PLEDGE AGREEMENT is dated _______________ between (1) LSI LOGIC
JAPAN SEMICONDUCTOR, INC. (the "Pledgor") and (2) _______________ acting through
its _______________ (the "Pledgee").
It is hereby agreed as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1 Definitions. Unless the context otherwise requires, the
following terms shall have the following meanings for all purposes of this
Agreement:
"Account" means the Japanese yen account (Account No.__________) of the
Pledgor maintained with the Pledgee and evidenced, if applicable, by a deposit
certificate issued by the Pledgee.
"Collateral" means, collectively, all of the right, title and interest
present or future of the Pledgor in and to (i) the Account and all amounts now
or hereafter from time to time
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deposited therein or credited thereto, (ii) (if applicable) the deposit
certificate from time to time evidencing the Account and (iii) all proceeds of
the foregoing, including all cash and other property at any time and from time
to time receivable or distributable in respect of or in exchange for the
foregoing.
"Facility Agreement" means the Facility Agreement dated 27 December,
1995 among LSI Logic Japan Semiconductor, Inc., the Banks parties thereto, ABN
AMRO Bank N.V., as Arranger, and ABN AMRO Bank N.V., Tokyo Branch, as Agent.
"Secured Obligations" means all moneys, liabilities and obligations,
whether actual or contingent, which are now or which may at any time and from
time to time hereafter be due, owing, payable or incurred or be expressed to be
due, owing, payable or incurred from or by the Pledgor to the Pledgee under the
Facility Agreement.
"Security Event" means (i) a Default or (ii) a breach by the Pledgor of
its obligations hereunder.
"Security Period" means the period commencing on the date of this
Agreement and terminating on the Expiration Date.
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All other terms used herein in capitalized form which are defined in
the Facility Agreement and not otherwise defined herein shall have the
respective meanings set forth in the Facility Agreement.
1.2 Interpretation. Unless the context otherwise requires, words
importing the singular number shall include the plural and vice versa; the
headings are for convenience only and shall not affect the construction hereof;
references herein to any agreement, license or other instrument shall be deemed
to include references to such agreement, license or other instrument as amended,
or otherwise modified from time to time, but only to the extent such amendments
or other modifications are not prohibited by the terms of the Loan Documents;
references herein to any enactment shall be deemed to include references to such
enactment as re-enacted, amended or extended; references to Sections are
references to Sections of this Agreement; and references to the Pledgor and the
Pledgee shall, where relevant, be deemed to be references to or to include, as
appropriate, their respective successors or assigns.
SECTION 2. SECURITY
2.1 As collateral security for the prompt payment and punctual
performance in full of the Secured Obligations when due (whether at stated
maturity, by acceleration or otherwise), the Pledgor hereby irrevocably and
unconditionally grants to the Pledgee a security
3.
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interest in the form of a pledge (shichiken) upon all its present and future
right, title and interest in the Collateral to the intent that such pledge shall
constitute a first ranking charge on, over, and in respect of the Collateral in
priority to any other Lien in favour of any other Person.
2.2 The security constituted by this Agreement shall not be released or
discharged by payment or satisfaction of any part of the Secured Obligations but
shall be a continuing security and shall extend to cover any sum or sums of
money or other obligations which shall for the time being constitute the balance
of the Secured Obligations until all of the Secured Obligations have been
discharged in full; provided, however, that so long as no Default shall have
occurred and be continuing, Collateral may be withdrawn only on 10 Banking Days'
prior notice to the Agent and on (i) an Interest Payment Date or (ii) the
Expiration Date. Withdrawals shall be an integral multiple of (yen)100,000,000
(one hundred million yen).
2.3 The security hereby constituted shall become enforceable
immediately upon the occurrence and continuance of a Security Event. At any time
after the security hereby constituted has become enforceable, the Pledgee may,
at its discretion and without prejudice to any other rights and remedies it may
have, and without being responsible for any loss or damage which may arise in
connection therewith unless due to the wilful misconduct or gross negligence of
the Pledgee, and without any consent of, or notice to, the Pledgor, apply all or
4.
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any part of the Collateral or any deposit forming part of the Collateral in or
towards satisfaction of any of the Secured Obligations which is then due and
payable.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1 The Pledgor hereby represents, warrants and covenants that it has
not heretofore created or agreed to create any Lien over, or assigned or
permitted any Lien to subsist over, and that throughout the Security Period it
will not hereafter create or agree to create, assign or suffer to exist any Lien
over, the Collateral.
3.2 The Pledgor agrees to deliver to the Pledgee the passbook (if any)
and any and all other documentary evidence or records in respect of the Account
and further agrees that from time to time upon the reasonable request of the
Pledgee it will promptly and duly execute and deliver to the Pledgee any and all
such further instruments and documents, as may reasonably be necessary in order
to enable the Pledgee to obtain the full benefits of this Agreement and of the
rights, benefits and powers herein granted.
3.3 Without prejudice to Clause 6.7 of the Facility Agreement, the
Pledgor agrees that insofar as a Security Event has occurred and is continuing,
it will not withdraw any
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amount out of the Account and the Pledgee will be permitted not to effect the
Pledgor's instruction for such withdrawal.
SECTION 4. APPOINTMENT OF ATTORNEY
The Pledgor hereby irrevocably and by way of security for the
performance of its obligations hereunder appoints the Pledgee to be its true and
lawful attorney-in-fact, with full power of substitution, for the Pledgor and in
its name or otherwise and on its behalf and as its act and deed to sign, seal,
execute and deliver any document or deed and do all such assurances, acts and
things which the Pledgee may reasonably deem to be necessary in order to give
full effect to the purposes of this Agreement provided that the Pledgee shall
not exercise the authority conferred on it under this Section unless a Security
Event has occurred. No action taken or omitted to be taken by the Pledgee
pursuant to this Section shall give rise to any defense, counterclaim or other
right of set-off in favor of the Pledgor or affect in any manner whatsoever any
of the Secured Obligations except in cases of willful misconduct or gross
negligence on the part of the Pledgee. The Pledgor will take such reasonable
acts as may be necessary to ratify or confirm any actions taken by the Pledgee
as attorney-in-fact as provided herein. The Pledgee shall not have any
obligation to exercise any of the powers hereby conferred upon it, or to make
any demand or enquiry as to the nature or sufficiency of
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any payment secured by it or to take any other action whatsoever with respect to
the Collateral.
SECTION 5. MISCELLANEOUS
5.1 The security created by this Agreement shall be in addition to and
without prejudice to any other security or guarantees from time to time held by
the Pledgee in respect of the Secured Obligations and this Agreement shall
remain in full force and effect until payment and discharge in full of the
Secured Obligations, notwithstanding, and shall not be affected in anyway by,
(a) the liquidation, bankruptcy, insolvency or reorganization of the Pledgor, or
(b) the release of, or any amendment to, any security or guarantee now or
hereafter held by the Pledgee or any other Person in respect of the Secured
Obligations (including, except to the extent of the relevant release or
amendment, the security hereby constituted), or (c) the enforcement or absence
of enforcement of any security or guarantee (including the security hereby
constituted), or (d) any time, indulgence, waiver or consent given to the
Pledgor or any other Person whether by the Pledgee or any other Person, or (e)
the illegality, invalidity or unenforceability or any defect in any provision of
any documents relating to the Secured Obligations or this Pledge or any security
or any guarantee (including the security hereby constituted) or any of the
rights or obligations of any of the
7.
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parties under or in connection with any such document or any security or any
guarantee (including the security hereby constituted), whether on the grounds of
not having been duly executed by the Pledgor or any other party thereto or for
any other reason whatsoever, or (f) any other fact or contingency whatsoever.
5.2 No failure on the part of the Pledgee to exercise, and no delay in
exercising, and no course of dealing with respect to, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise of the same or any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
5.3 The Pledgor agrees to indemnify the Pledgee against, and to
reimburse the Pledgee on demand for, all reasonable out-of-pocket costs,
expenses, losses and liabilities of the Pledgee in connection with the
enforcement of this Agreement and the exercise by the Pledgee of any of the
powers conferred upon it hereunder (other than in respect of any exercise which
would constitute gross negligence or wilful misconduct).
5.4 If at any time any provision hereof becomes invalid, illegal or
unenforceable in respect of the laws of any jurisdiction, the validity, legality
or enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby and such invalidity,
8.
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illegality or unenforceability shall not affect the validity, legality or
enforceability of such provision in any other jurisdiction.
5.5 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. The Pledgor may
not assign its rights or obligations hereunder without the written consent of
the Pledgee.
5.6 This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
and both such counterparts together shall constitute one and the same
instrument.
5.7 This Agreement shall take effect under and be governed by and
construed in accordance with the laws of Japan.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized representatives on the day and year
first above written.
LSI LOGIC JAPAN SEMICONDUCTOR, INC.
9.
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By _____________________________________
Name:
Title:
[PLEDGEE]
By _____________________________________
Name:
Title:
[NB: Date of this agreement to be officially established in the form of Kakutei
hizuke]
10.
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Exhibit 4
Form of Substitution Certificate
To: [Name and address of Agent]
Attention: -19-
Substitution Certificate
This Substitution Certificate relates to a Credit Facility Agreement
(the "Agreement") dated 27 December, 1995 between LSI Logic Japan Semiconductor,
Inc. as Borrower (1), ABN AMRO Bank N.V. as Arranger (2), the banks and
financial institutions whose respective names and addresses are set out in
schedule 1 thereto as Banks (3) and ABN AMRO Bank N.V., Tokyo Branch as Agent
(4) and the Guaranty as defined in the Agreement. Terms defined in the Agreement
shall have the same meaning in this Substitution Certificate.
1.
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1 [Existing Bank] (the "Existing Bank") (a) confirms the accuracy of the
summary of its participation in the Facility set out in the schedule
hereto; and (b) requests [Substitute Bank] (the "Substitute") to accept
by way of novation the portion of that participation specified in the
schedule hereto by counter-signing and delivering this Substitution
Certificate to the Agent at its address for the service of notices
specified in the Agreement.
2 The Substitute hereby requests the Agent (on behalf of itself, the
Borrower and the Banks) to accept this Substitution Certificate as
being delivered to the Agent pursuant to and for the purposes of Clause
15.4 of the Agreement [and Clause [ ] of the Guaranty], so as to take
effect in accordance with the respective terms thereof on [date of
transfer] (the "Effective Date") or on such later date as may be
determined in accordance with the terms thereof.
3 The Agent (for itself, the Borrower and the other Banks [and the
Guarantor]) confirms the novation effected by this Substitution
Certificate pursuant to and for the purposes of Clause 15.4 of the
Agreement and Section 22 of the Guaranty so as to take effect in
accordance with the terms thereof.
4 The Substitute confirms:
2.
118
(a) that it has received a copy of the Agreement and the Guaranty
and all other documentation and information required by it in
connection with the transactions contemplated by this
Substitution Certificate;
(b) that it has made and will continue to make its own assessment
of the validity, enforceability and sufficiency of the
Agreement the Guaranty and this Substitution Certificate and
has not relied and will not rely on the Existing Bank, the
Arranger or the Agent or any statements made by any of them in
that respect;
(c) that it has made and will continue to make its own credit
assessment of the Borrower and has not relied and will not
rely on the Existing Bank, the Arranger or the Agent or any
statements made by either of them in that respect; and
(d) accordingly, none of the Existing Bank, the Arranger nor the
Agent shall have any liability or responsibility to the
Substitute in respect of any of the foregoing matters.
3.
119
5 Execution of this Substitution Certificate by the Substitute
constitutes its representation to the Existing Bank and all other
parties to the Agreement that it has power to become party to the
Agreement as a Bank on the terms herein and therein set out and has
taken all necessary steps to authorise execution and delivery of this
Substitution Certificate.
6 The Existing Bank makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of the Agreement the Guaranty or any
document relating thereto and assumes no responsibility for the
financial condition of the Borrower or any other party to the Agreement
or the Guaranty or for the performance and observance by the Borrower
or any other such party of any of its obligations under the Agreement
or any document relating thereto and any and all such conditions and
warranties, whether express or implied by law or otherwise, are hereby
excluded.
7 The Substitute hereby undertakes to the Existing Bank, the Borrower and
Agent that it will perform in accordance with their terms all those
obligations which by the respective terms of the Agreement will be
assumed by it after acceptance of this Substitution Certificate by the
Agent.
8 This Substitution Certificate and the rights and obligations of the
parties hereunder are governed by and shall be construed in accordance
with the laws of Japan.
4.
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Note: This Substitution Certificate is not a security, bond, note, debenture,
investment or similar instrument.
Executed by the authorised signatories of the parties on the date appearing
below.
5.
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The Schedule
Amount of Amount of Portion novated
--------- --------- ---------------
Advance Contribution Next (Yen)
------- ------------ ---- ----
(Yen) (Yen) Repayment Date
----- ----- --------------
Administrative Details of Substitute
Lending office:
Account for payments:
Telephone:
Telefax:
Telex:
Attention:
6.
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[Existing Bank] [Substitute]
By: By:
Title: Title:
Date: Date:
The Agent
(for itself and on behalf of the Borrower and the Banks [and the Guarantor])
By:
Title:
Date:
7.
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Exhibit 5
Form of Margin Certificate
To: [Name and address of Agent]
Attention: [Date]
(Yen)25,000,000,000
Floating Rate Guaranteed Credit Facility
Agreement dated 27 December, 1995
We refer to the above Agreement (terms used in this letter having the
meanings given to them in that Agreement) and notify you that as at the date of
this letter;
(i) the Ratio is [ ]
1.
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(ii) the Debt Rating is [ ].
for and on behalf of
LSI Logic Corporation
____________________ Name:
Title:
2.
125
Exhibit 6
Form of Confirmation of Repayment Schedule
To: [Name and Address of Agent]
Attention:
(Yen)25,000,000,000
Floating Rate Guaranteed Credit Facility
Agreement dated 27 December, 1995
We refer to the above Agreement (terms used in this letter
having the meanings given to them in that Agreement) and confirm to you that as
of the Expiration Date:
(a) the aggregate of all Advances made is
(Yen)___________.
(b) each Bank's contribution is as follows:
[Name of Bank] [Amount of Contribution]
(c) the repayment schedule with respect to the Loan is as
follows:
3.
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[Date of Repayment] [Amount of Repayment]
(d) the repayment schedule with respect to each Bank's
Contribution is as follows:
[Name of Bank] :
[Date of Repayment] [Amount of Repayment]
127
FORM OF LSI LOGIC CORPORATION GUARANTY
================================================================================
LSI LOGIC CORPORATION
GUARANTY
DATED AS OF DECEMBER __, 1995
================================================================================
128
TABLE OF CONTENTS
-----------------
SECTION Page
------- ----
SECTION 1 Definitions; Interpretation............................................................................. 1
(a) Terms Defined in Facility Agreement..................................................................... 1
(b) Certain Defined Terms................................................................................... 1
(c) Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Guaranty....................... 13
(d) Interpretation.......................................................................................... 13
SECTION 2 Guaranty........................................................................................................... 14
SECTION 3 Liability of Guarantor............................................................................................. 15
SECTION 4 Consents of Guarantor.............................................................................................. 17
SECTION 5 Guarantor's Waivers................................................................................................ 18
(a) Certain Waivers......................................................................................... 18
(b) Additional Waivers...................................................................................... 19
(c) Independent Obligations................................................................................. 19
(d) Financial Condition of Borrower......................................................................... 19
SECTION 6 Subrogation........................................................................................................ 19
SECTION 7 Subordination...................................................................................................... 20
(a) Subordination to Payment of Subject Obligations......................................................... 20
(b) No Payments............................................................................................. 20
(c) Subordination of Remedies............................................................................... 21
(d) Subordination upon Any Distribution of Assets of the Borrower........................................... 21
(e) Authorization to Agent.................................................................................. 22
SECTION 8 Continuing Guaranty; Reinstatement................................................................................. 22
(a) Continuing Guaranty..................................................................................... 22
(b) Reinstatement........................................................................................... 22
SECTION 9 Payments; Taxes.................................................................................................... 23
(a) Payments................................................................................................ 23
(b) Taxes................................................................................................... 23
SECTION 10 Representations and Warranties.................................................................................... 24
(a) Organization and Powers................................................................................. 24
(b) Authorization; No Conflict.............................................................................. 24
(c) Binding Obligation...................................................................................... 25
(d) Governmental Consents................................................................................... 25
(e) No Default.............................................................................................. 25
(f) Taxes................................................................................................... 25
(g) Regulated Entities...................................................................................... 25
(h) Title to Properties..................................................................................... 26
(i) Litigation.............................................................................................. 26
(j) Compliance with Consents and Licenses................................................................... 26
(k) Compliance with Environmental Laws...................................................................... 26
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129
TABLE OF CONTENTS
-----------------
(continued)
SECTION Page
------- ----
(l) ERISA................................................................................................... 27
(m) Insurance............................................................................................... 27
(n) Financial Statements.................................................................................... 27
(o) Liabilities............................................................................................. 28
(p) Labor Disputes, Etc..................................................................................... 28
(q) Consideration........................................................................................... 28
(r) Independent Investigation............................................................................... 28
(s) Name of Borrower........................................................................................ 28
(t) Full Disclosure......................................................................................... 28
SECTION 11 Affirmative Covenants............................................................................................. 29
(a) Financial Statements and Other Reports.................................................................. 29
(b) Additional Information.................................................................................. 30
(c) Preservation of Corporate Existence, Etc................................................................ 31
(d) Payment of Taxes, Etc................................................................................... 32
(e) Licenses................................................................................................ 32
(f) Maintenance of Property................................................................................. 32
(g) Insurance............................................................................................... 32
(h) Payment of Obligations.................................................................................. 33
(i) Compliance with Laws.................................................................................... 33
(j) Compliance with ERISA................................................................................... 33
(k) Inspection of Property and Books and Records............................................................ 33
(l) Margin Certificate...................................................................................... 34
(m) Further Assurances and Additional Acts.................................................................. 34
SECTION 12 Negative Covenants................................................................................................ 34
(a) Liens; Negative Pledges................................................................................. 34
(b) Change in Nature of Business............................................................................ 34
(c) Sales of Assets......................................................................................... 35
(d) Loans and Investments................................................................................... 35
(e) Restrictions on Fundamental Changes and Acquisitions.................................................... 36
(f) Transactions with Related Parties....................................................................... 36
(g) Accounting Changes...................................................................................... 37
(h) Distributions........................................................................................... 37
SECTION 13 Financial Covenants............................................................................................... 38
(a) Senior Debt to Total Capital............................................................................ 38
(b) Total Leverage Ratio.................................................................................... 38
(c) Quick Ratio............................................................................................. 38
(d) Minimum Consolidated Tangible Net Worth................................................................. 38
(e) Debt Service Coverage Ratio............................................................................. 38
(f) Profitability........................................................................................... 38
(g) Subordinated Debt....................................................................................... 39
SECTION 14 Event of Default.................................................................................................. 39
(a) Representation or Warranty.............................................................................. 39
(b) Specific Defaults....................................................................................... 39
(c) Other Defaults.......................................................................................... 39
(d) Default Under Other Indebtedness........................................................................ 39
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TABLE OF CONTENTS
-----------------
(continued)
SECTION Page
------- ----
(e) Insolvency; Voluntary Proceedings....................................................................... 40
(f) Involuntary Proceedings................................................................................. 40
(g) Judgments............................................................................................... 40
(h) Process Issued.......................................................................................... 40
(i) Seizure................................................................................................. 41
(j) ERISA................................................................................................... 41
(k) Dissolution, Etc........................................................................................ 41
(l) Ownership of Borrower................................................................................... 41
(m) Change in Ownership or Control.......................................................................... 41
(n) Repudiation............................................................................................. 41
(o) Material Adverse Effect................................................................................. 42
SECTION 15 Notices........................................................................................................... 42
SECTION 16 No Waiver; Cumulative Remedies.................................................................................... 42
SECTION 17 Costs and Expenses; Indemnification; Other Charges................................................................ 43
(a) Costs and Expenses...................................................................................... 43
(b) Indemnification......................................................................................... 43
(c) Defense................................................................................................. 44
(d) Other Charges........................................................................................... 44
(e) Interest................................................................................................ 44
SECTION 18 Payment Currency.................................................................................................. 45
SECTION 19 Set-off........................................................................................................... 46
SECTION 20 Survival.......................................................................................................... 46
SECTION 21 Successors and Assigns............................................................................................ 46
SECTION 22 Assignments, Participations, Etc.................................................................................. 46
SECTION 23 Governing Law..................................................................................................... 47
SECTION 24 Waiver of Jury Trial.............................................................................................. 47
SECTION 25 Entire Agreement.................................................................................................. 48
SECTION 26 Amendments and Waivers............................................................................................ 48
SECTION 27 Severability...................................................................................................... 48
SECTION 28 Benefit of Guaranty............................................................................................... 48
SECTION 29 Time.............................................................................................................. 49
EXHIBITS
Exhibit A Compliance Certificate
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SCHEDULES
Schedule 1 Certain Permitted Liens
(Section 1, "Permitted Liens")
Schedule 2 Litigation (Section 10(i))
Schedule 3 Certain Environmental Matters (Section 10(k))
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GUARANTY
THIS GUARANTY (this "Guaranty"), dated as of December ___,
1995, is made by LSI LOGIC CORPORATION, a Delaware corporation (the
"Guarantor"), in favor of the Banks from time to time party to the Facility
Agreement referred to below and ABN AMRO Bank N.V., as agent for such Banks (in
such capacity, the "Agent").
LSI Logic Japan Semiconductor, Inc., a limited liability
company incorporated under the laws of Japan (the "Borrower"), certain financial
institutions as lenders (the "Banks") and the Agent are parties to an Agreement
dated as of December ___, 1995 (as amended, modified, renewed or extended from
time to time, the "Facility Agreement"). It is a condition precedent to the
borrowings under the Facility Agreement that the Guarantor guarantee the
indebtedness and other obligations of the Borrower to the Agent and the Banks
under or in connection with the Facility Agreement as set forth herein. The
Guarantor, as the indirect holder of 100% of the issued and outstanding shares
of common stock of the Borrower, will derive substantial direct and indirect
benefits from the making of the Advances to the Borrower pursuant to the
Facility Agreement (which benefits are hereby acknowledged by the Guarantor).
NOW THEREFORE, to induce the Banks and the Agent to enter into
the Facility Agreement and to induce the Banks to make the Advances made
pursuant to the Facility Agreement and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Guarantor hereby represents, warrants, covenants and agrees as follows:
SECTION 9 Definitions; Interpretation.
(a) Terms Defined in Facility Agreement. All capitalized
terms used in this Guaranty (including in the recitals hereof) and not otherwise
defined herein shall have the meanings assigned to them in the Facility
Agreement.
(b) Certain Defined Terms. The following terms have the
following meanings:
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting in (a) the acquisition,
directly or indirectly, of all or substantially all of the assets of a
Person or of any business or division of a Person, (b) the acquisition,
directly or indirectly, of all or substantially all of the capital
stock, obligations or other securities of or interest in a Person, or
(c) a merger or consolidation or any other combination by the Guarantor
or any Subsidiary with another Person.
"Affiliate" means any Person which, directly or
indirectly, controls, is controlled by or is under common control with
another Person. For purposes of the foregoing, "control" with respect
to any Person shall mean the possession, directly or indirectly, of the
power (i) to vote 25% or more of the securities having ordinary voting
power for the election of directors of such Person, or (ii) to direct
or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or
otherwise.
"Bankruptcy Code" means Title 11 of the United States
Code, as applicable to the relevant case.
"Capital Lease" means, for any Person, any lease of
property (whether real, personal or mixed) in respect of which such
Person is liable as lessee and which, in accordance with GAAP, would,
at the time a determination is made, be required to be recorded as a
capital lease.
"Capitalized Interest" means interest that is
incurred or accrued in any period and added to the cost of the asset in
connection with which such interest is incurred.
"Compliance Certificate" means a certificate of a
Responsible Officer of the Guarantor, in substantially the form of
Exhibit A, with such changes thereto as the Agent or any Bank may from
time to time reasonably request.
"Consolidated CMLTD" means, as of any date of
determination, the portion of long term Indebtedness coming due in the
next succeeding four-quarter period.
"Consolidated Current Liabilities" means, as of any
date of determination, the sum of current liabilities of the Guarantor
and its Subsidiaries on a consolidated basis, as determined in
accordance with GAAP, plus (without
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133
duplication) Guaranty Obligations with respect to that portion of the
underlying obligations which come due within one year of such date of
determination.
"Consolidated EBIT" means, for any period,
Consolidated Net Income plus Consolidated Interest Expense plus income
tax expense as determined for the Guarantor and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any
period, interest expense (including interest expense attributable to
Capital Leases) of the Guarantor and its Subsidiaries on a consolidated
basis, as determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, the
net income of the Guarantor and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period, as
determined in accordance with GAAP.
"Consolidated Quick Assets" means, as of any date of
determination, the sum of all unencumbered and unrestricted (except
those encumbered or restricted in favor of the Agent or the Banks)
cash, cash equivalents and net accounts receivable classified as
current assets according to GAAP, of the Guarantor and its Subsidiaries
on a consolidated basis, as determined in accordance with GAAP.
"Consolidated Rental Expense" means, for any period,
rental expense of the Guarantor and its Subsidiaries on a consolidated
basis, as determined in accordance with GAAP.
"Consolidated Tangible Net Worth" means, as of any
date of determination, Consolidated Total Assets minus Consolidated
Total Liabilities, minus (i) all assets which would be classified in a
separate account as intangible assets in accordance with GAAP,
including goodwill, organizational expense, research and development
expense, capitalized software, patent applications, patents,
trademarks, trade names, brands, copyrights, trade secrets, customer
lists, licenses, franchises and covenants not to compete, (ii) all
unamortized debt discount and expense and (iii) all treasury stock;
provided, however, that to the extent otherwise included in the amount
set forth in the foregoing clause (i) of this definition, there shall
be excluded from such amount the sum of (x) all engineering costs
incurred in connection with the development of major production
capabilities at new manufacturing facilities or refurbishment of an
existing facility or with respect to introducing a new manufacturing
process to existing or new manufacturing facilities and which are
classified as a fixed asset and capitalized on the consolidated balance
sheet of the Guarantor in accordance with GAAP and (y) amounts
representing the capitalized portion of the acquisition and development
costs of software necessary for the operation of the business of the
Guarantor and its Subsidiaries, as shown on the consolidated balance
sheet of the Guarantor.
"Consolidated Total Assets" means, as of any date of
determination, the total assets of the Guarantor and its Subsidiaries
on a consolidated basis, as determined in accordance with GAAP.
"Consolidated Total Liabilities" means, as of any
date of determination, the total liabilities of the Guarantor and its
Subsidiaries on a consolidated basis, as determined in accordance with
GAAP.
"Dollars" and the sign "$" each means lawful money
of the United States.
"Environmental Laws" means all laws, statutes, common
law duties, rules, regulations, ordinances and codes, administrative
orders, directives, requests, licenses, authorizations and permits of,
and agreements with (including consent decrees), any Governmental
Authorities, in each case relating to or imposing liability or
standards of conduct concerning (a) the pollution, conservation or
protection of the environment (both natural and built), (b) the
development, occupation, exploitation or other use of land, buildings
or other property or assets, (c) the creation, storage, handling and
disposal of industrial waste and hazardous substances and (d) health
and safety at work or elsewhere, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Clean Air Act, the Federal Water Pollution Control Act of 1972, the
Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act, the Emergency Planning
and Community Right-to-Know Act, the California Hazardous Waste Control
Law, the California Solid Waste Management, Resource Recovery and
Recycling Act, the California Water Code and the California Health and
Safety Code.
"Equity Capital" means Consolidated Total Assets
minus Consolidated Total Liabilities.
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"ERISA" means the Employee Retirement Income Security
Act of 1974, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) which is under common control with the
Guarantor within the meaning of Section 4001(a)(14) of ERISA and
Sections 414(b), (c) and (m) of the Internal Revenue Code.
"ERISA Event" means (i) a Reportable Event with
respect to a Pension Plan; (ii) a withdrawal by the Guarantor from a
Pension Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations which is treated as such a
withdrawal under Section 4062(e) of ERISA; (iii) the filing of a notice
of intent to terminate, the treatment of a plan amendment as a
termination under Section 4041 or 4041A of ERISA or the commencement of
proceedings by the PBGC to terminate a Pension Plan subject to Title IV
of ERISA; (iv) a failure by the Guarantor to make required
contributions to a Pension Plan or other Plan subject to Section 412 of
the Code; (v) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of any liability under Title IV of ERISA, other
than PBGC premiums due but not delinquent under Section 4007 of ERISA,
upon the Guarantor; or (vii) an application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the
Code with respect to any Pension Plan.
"Event of Default" means any of the events or
circumstances specified as such in Section 14.
"Facility Agreement" has the meaning provided
therefor in the preamble hereto.
"GAAP" means generally accepted accounting principles
set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date
of determination.
"Governmental Authority" means, with respect to any
Person, any federal, state, local or other governmental department,
commission, board, bureau, agency, central bank, court, tribunal or
other instrumentality or authority, domestic or foreign, exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government having jurisdiction over such
Person.
"Guaranty Obligation" means, as applied to any
Person, any direct or indirect liability, contingent or
otherwise, of that Person
(i) with respect to any Indebtedness, lease (other
than an operating lease), dividend, or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person (A) to purchase, repurchase or otherwise
acquire such primary obligations or any property constituting direct or
indirect security therefor, or (B) to advance or provide funds (x) for
the payment or discharge of any such primary obligation, or (y) to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet
item, level of income or financial condition of the primary obligor, or
(C) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation, or (D) otherwise to assure or hold harmless the holder of
any such primary obligation against loss in respect thereof;
(ii) (A) with respect to letters of credit,
acceptances, bank guaranties, surety bonds or similar instruments
issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings, or (B) as a partner or
joint venturer in any partnership or joint venture;
(iii) with respect to synthetic leases; or
(iv) net obligations with respect to Rate Contracts,
other than Rate Contracts entered into in connection with a bona fide
hedging operation that provides offsetting benefits to such Person.
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"Hazardous Substances" means any hazardous or toxic
substance, material or waste, defined, listed, classified or regulated
as such in or under any Environmental Laws, including asbestos,
petroleum or petroleum products (including gasoline, crude oil or any
fraction thereof), polychlorinated biphenyls and ureaformaldehyde
insulation.
"Indebtedness" means, for any Person, without
duplication:
(i) all indebtedness or other obligations of such
Person for borrowed money;
(ii) all obligations of such Person for the deferred
purchase price of property or services (including obligations under
credit facilities which secure or finance such purchase price), other
than trade payables incurred by such Person in the ordinary course of
its business on ordinary terms;
(iii) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or
businesses;
(iv) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property);
(v) all obligations under Capital Leases;
(vi) all Guaranty Obligations other than Guaranty
Obligations described in clauses (i)(C) and (i)(D) of the definition of
"Guaranty Obligation" where the primary obligor is a Subsidiary; and
(vii) all indebtedness of another Person secured by
any Lien upon or in property owned by the Person for whom Indebtedness
is being determined, whether or not such Person has assumed or become
liable for the payment of such indebtedness of such other Person;
provided, that if such indebtedness is not assumed and recourse is
limited solely to such property, the Indebtedness incurred hereunder
shall be valued at the lesser of the principal amount of the obligation
so secured or the fair market value of the property subject to such
Lien.
"Insolvency Proceeding" means (i) any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (ii) any general
assignment for the benefit of creditors, composition, marshalling of
assets for creditors, or other, similar arrangement in respect of its
creditors generally or any substantial portion of its creditors;
undertaken under U.S. Federal, state or foreign law, including the
Bankruptcy Code.
"Intercompany Debt" has the meaning given to it in
Section 7(a).
"Intercompany Debt Payments" has the meaning given
to it in Section 7(b).
"Internal Revenue Code" means the Internal Revenue
Code of 1986, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"IRS" means the Internal Revenue Service, or any
successor thereto.
"Lien" means any mortgage, deed of trust, pledge,
security interest, assignment, deposit arrangement, charge or
encumbrance, lien (statutory or other), or other preferential
arrangement (including any conditional sale or other title retention
agreement, or any financing lease having substantially the same
economic effect as any of the fore going or any agreement to give any
security interest, but excluding any operating lease, regardless of
whether precautionary filings are made in respect thereof under
Section 9408 of the California Uniform Commercial Code).
"Loan Document" means the Facility Agreement, any
notes evidencing the Indebtedness thereunder, this Guaranty and all
other certificates, documents, agreements and instruments delivered to
the Agent and the Banks under or in connection with the Facility
Agreement.
"Material Adverse Effect" means (i) a material
adverse change in, or a material adverse effect upon, the operations,
business, properties, condition (financial or otherwise) or prospects
of the Guarantor, the Borrower or the Guarantor and its Subsidiaries
taken as a whole; (ii) a material impairment of the ability of the
Guarantor or the Borrower
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to perform its payment obligations under any Loan Document to which it
is a party or under any loan document relating to any Indebtedness of
the Guarantor or the Borrower, as the case may be, described in Section
14(d); or (iii) a material adverse effect upon the legality, validity,
binding effect or enforceability of any Loan Document.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Sections 3(37) and 4001(a)(3) of ERISA.
"Other Taxes" means any present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to,
this Guaranty or any other Loan Documents.
"PBGC" means the Pension Benefit Guaranty
Corporation, or any successor thereto.
"Pension Plan" means a pension plan (as defined in
Section 3(2) of ERISA) subject to Title IV of ERISA, which the
Guarantor sponsors or maintains, or to which it makes, is making, or is
obligated to make contributions, or in the case of a multiple employer
plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding five plan years.
"Permitted Acquisition" has the meaning given to
it in Section 12(e).
"Permitted Investments" means any Dollar-denominated
investments, maturing within 24 months from the date of acquisition,
selected by the Guarantor in accordance with its Corporate Cash
Investment Policy as adopted by the Guarantor on February 13, 1995;
provided that any Investments not meeting the standards set forth in
such Corporate Cash Investment Policy shall nevertheless be deemed to
be "Permitted Investments" if they do not exceed at any time, in the
aggregate, 10% of all Permitted Investments at such time.
"Permitted Liens" means:
(i) Liens which may at any time be granted in favor
of the Agent on behalf of the Banks or the Banks to secure obligations
under the Loan Documents;
(ii) Liens in existence as of the date of this
Guaranty listed on Schedule 1, and any substitutions or renewals
thereof, provided that the principal amount of the obligations secured
thereby is not increased;
(iii) Liens for current taxes, assessments or other
governmental charges which are not delinquent or remain payable without
any penalty or which are being contested in good faith via appropriate
proceedings, with appropriate reserves established therefor in
accordance with GAAP;
(iv) Liens in connection with workers' compensation,
unemployment insurance or other social security obligations;
(v) mechanics', workers', materialmen's, landlords',
carriers' or other like Liens arising in the ordinary and normal course
of business with respect to obligations which are not past due or which
are being contested in good faith via appropriate proceedings, with
appropriate reserves established therefor in accordance with GAAP;
(vi) purchase money security interests (including by
way of installment sales and title retention agreements) in personal or
real property hereafter acquired when the security interest is granted
contemporaneously with such acquisition (or within nine months
thereafter), Liens created to secure the cost of construction or
improvement of property and Liens created to secure Indebtedness
incurred to finance such purchase price or cost (including Liens of the
Guarantor or the Borrower in favor of the United States or any State,
or any department, agency, instrumentality or political subdivision
thereof, securing any real property or other assets in connection with
the financing of industrial revenue bond facilities or of any equipment
or other property designed primarily for the purpose of air or water
pollution control); provided, that (A) any such Lien shall attach only
to the property so purchased, constructed or improved, together with
attachments and accessions thereto, and rents, proceeds, products,
substitutions, replacements and profits thereof and attachments and
accessories thereto, and (B) the amount of Indebtedness secured by any
such Lien shall not exceed the purchase or construction price of such
property plus transaction costs and financing charges relating to the
acquisition or construction thereof;
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(vii) Liens arising from attachments or similar
proceedings, pending litigation, judgments or taxes or assessments in
any such event whose validity or amount is being contested in good
faith by appropriate proceedings and for which adequate reserves have
been established and are maintained in accordance with GAAP;
(viii) Liens arising in the ordinary course of
business or by operation of law, not securing Indebtedness, but
securing such obligations as (A) judgments or awards, which (x) are
covered by applicable insurance or (y) have been outstanding less than
30 consecutive days, (B) interests of landlords or lessors under
leases of real or personal property entered into in the ordinary course
of business arising by contract or operation of law, (C) Liens in favor
of customs and revenue authorities which secure payment of customs in
connection with the importation of goods, (D) Liens which constitute
rights of set-off of a customary nature or bankers' liens on amounts on
deposit, whether arising by contract or by operation of law, in
connection with arrangements entered into with depository institutions
in the ordinary course of business, (E) such minor defects,
irregularities, encumbrances, easements, rights of way, and clouds on
title as normally exist with respect to similar properties which do
not, individually or in the aggregate, materially impair the property
affected thereby or the use thereof and (F) subleases, licenses, and
sublicenses granted to third parties, the granting of which does not
result in a Material Adverse Effect;
(ix) Liens securing reimbursement obligations of the
Borrower or the Guarantor under documentary letters of credit;
provided, that such liens shall attach only to documents relating to
such letters of credit, goods covered thereby and products and proceeds
thereof;
(x) Liens on insurance policies or the proceeds of
insurance policies incurred solely to secure the financing of premiums
owing with respect thereto;
(xi) Liens existing on property (including the
proceeds and accessions thereto) acquired by the Borrower or the
Guarantor (including Liens on assets of any corporation at the time it
becomes a Subsidiary), but excluding any Liens created in contemplation
of any such acquisition; and
(xii) Liens encumbering customary initial deposits
and margin deposits, and other Liens that are either within the general
parameters customary in the industry and incurred in the ordinary
course of business, in each case securing Indebtedness under Rate
Contracts.
"Person" means an individual, corporation, limited
liability company, partnership, joint venture, trust, unincorporated
organization or any other entity of whatever nature or any Governmental
Authority.
"Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) which the Guarantor sponsors or maintains, or to
which the Guarantor makes, is making, or is obligated to make
contributions, and includes any Pension Plan.
"Rate Contracts" means interest rate swaps, caps,
floors and collars, currency swaps, or other similar financial products
designed to provide protection against fluctuations in interest,
currency or exchange rates.
"Reportable Event" means any of the events set forth
in Section 4043(b) of ERISA or the regulations promulgated thereunder,
other than any such event for which the 30-day notice requirement under
ERISA has been waived in regulations issued by the PBGC.
"Responsible Officer" means, with respect to any
Person, the chief executive officer, the president, the chief financial
officer or the treasurer of such Person, or any other senior officer of
such Person having substantially the same authority and responsibility;
or, with respect to compliance with financial covenants, the chief
financial officer or the treasurer of such Person, or any other senior
officer of such Person involved principally in the financial
administration or controllership function of such Person and having
substantially the same authority and responsibility.
"Senior Debt" means all Indebtedness, other than
Subordinated Debt, of the Guarantor and its Subsidiaries on a
consolidated basis.
"Solvent" means, with respect to any Person, that as
of the date of determination, (i) the then fair saleable value of the
property of such Person is (A) greater than the total amount of
liabilities (including reasonably anticipated liabilities with respect
to contingent obligations) of such Person and (B) greater than the
amount that will be required to pay the probable liabilities on such
Person's then existing debts as they become absolute and matured
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considering all financing alternatives and potential asset sales
reasonably available to such Person, and (ii) such Person has not
incurred and does not intend to incur, or does not believe that it will
incur, debts beyond its ability to pay such debts as they become due.
"Subject Obligations" shall have the meaning assigned
to such term in Section 2 hereof.
"Subordinated Debt" means (i) the Guarantor's 5-1/2%
Convertible Subordinated Notes Due 2001 (the "Convertible Subordinated
Notes") and (ii) any other Indebtedness of the Guarantor or any
Subsidiary under which principal payments will become due and payable
no earlier than the first anniversary of the Final Maturity Date and
which is subordinated on terms and conditions reasonably acceptable to
the Majority Banks; provided, that any Subordinated Debt having
subordination provisions no more favorable to the holder than those
contained in the Convertible Subordinated Notes shall be deemed to be
reasonably acceptable to the Majority Banks for the purposes hereof.
"Subsidiary" means, with respect to the Guarantor,
any corporation, partnership, limited liability company, association,
joint venture or other business entity of which more than 50% of the
total voting power of shares of capital stock or other ownership
interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled,
directly or indirectly, by the Guarantor or one or more of the other
Subsidiaries of the Guarantor or a combination thereof.
"Taxes" means any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank
and the Agent, such taxes (including income taxes or franchise taxes)
as are imposed on or measured by each Bank's net income by the
jurisdiction (or any political subdivision thereof) under the laws of
which such Bank or the Agent, as the case may be, is organized or
maintains a lending office; and "Taxation" shall be construed
accordingly.
"Termination Event" means any of the following:
(i) with respect to a Pension Plan, a reportable
event described in Section 4043 of ERISA and the regulations issued
thereunder (other than a reportable event not subject to the provisions
for 30-day notice to the PBGC under such regulations);
(ii) the withdrawal of the Guarantor or an ERISA
Affiliate from a Pension Plan during a plan year in which the
withdrawing employer was a "substantial employer" as defined in Section
4001(a)(2) or 4062(e) of ERISA;
(iii) the taking of any actions (including the filing
of a notice of intent to terminate) by the Guarantor, an ERISA
Affiliate, the PBGC, a Plan Administrator, or any other Person to
terminate a Pension Plan or the treatment of a Plan amendment as a
termination of a Pension Plan under Section 4041 of ERISA;
(iv) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Pension Plan; or
(v) the complete or partial withdrawal of the
Guarantor or an ERISA Affiliate from a Multiemployer Plan.
"Total Capital" means the sum of Equity Capital,
Senior Debt and Subordinated Debt.
"Unfunded Pension Liability" means the excess of a
Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding the Plan pursuant to Section 412 of the
Code for the applicable plan year.
"United States" and "U.S." each means the United
States of America.
(c) Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Guaranty. Except as otherwise expressly provided in this
Guaranty, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP. Financial statements,
determination relating to covenants, and other information required to be
delivered or determined by the Guarantor pursuant to this Guaranty shall be
prepared or determined in conformity with GAAP as in effect at the time of such
preparation or determination; provided, that in the event that a change to GAAP
taking effect after the
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date hereof would otherwise affect the calculation of any covenant set forth in
Section 13 hereof, such covenant shall be calculated in accordance with GAAP as
in effect immediately prior to such change until an appropriate adjustment can
be determined.
(d) Interpretation. In this Guaranty, except to the
extent the context otherwise requires:
(i) Any reference to an Article, a Section, a
Schedule or an Exhibit is a reference to an article or section of, or a schedule
or an exhibit to, this Guaranty, respectively, and any reference to a subsection
or a clause is, unless otherwise stated, a reference to a subsection or a clause
of the Section or subsection in which the reference appears.
(ii) The words "hereof," "herein," "hereto,"
"hereunder" and the like mean and refer to this Guaranty or any other Loan
Document as a whole and not merely to the specific Article, Section, subsection,
paragraph or clause in which the respective word appears.
(iii) The meaning of defined terms shall be equally
applicable to both the singular and plural forms of the terms defined.
(iv) The words "including," "includes" and "include"
shall be deemed to be followed by the words "without limitation."
(v) References to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of the Loan Documents.
(vi) References to statutes or regulations are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation referred to.
(vii) Any table of contents, captions and headings
are for convenience of reference only and shall not affect the construction of
this Guaranty.
(viii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding"; and the
word "through" means "to and including."
(ix) The use of a word of any gender shall include
each of the masculine, feminine and neuter genders.
SECTION 2 Guaranty. The Guarantor hereby unconditionally and
irrevocably guarantees to the Agent and the Banks, and their respective
successors, endorsees, transferees, assigns and Substitutes, the full and
prompt payment when due (whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise) and performance of the
indebtedness, liabilities and other obligations of the Borrower to the Agent and
the Banks under or in connection with the Facility Agreement and the other Loan
Documents, including all unpaid principal of the Advances, all interest accrued
thereon, all fees due under the Facility Agreement and all other amounts payable
by the Borrower to the Agent and the Banks thereunder or in connection
therewith. The terms "indebtedness," "liabilities" and "obligations" are used
herein in their most comprehensive sense and include any and all advances,
debts, obligations and liabilities, now existing or hereafter arising, whether
voluntary or involuntary and whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, together with interest
thereon at the contract rate (whether before or after the commencement of any
Insolvency Proceeding with respect to the Borrower), and whether recovery upon
such indebtedness, liabilities and obligations may be or hereafter become
unenforceable or shall be an allowed or disallowed claim under the Bankruptcy
Code or other applicable law. The foregoing indebtedness, liabilities and other
obligations of the Borrower, and all other indebtedness, liabilities and
obligations to be paid or performed by the Guarantor in connection with this
Guaranty (including any and all amounts due under Section 17), shall hereinafter
be collectively referred to as the "Subject Obligations."
SECTION 3 Liability of Guarantor. The liability of the Guarantor under
this Guaranty shall be irrevocable, absolute, independent and unconditional, and
shall not be affected by any circumstance which might constitute a discharge of
a surety or guarantor other than the indefeasible payment and performance in
full of all Subject Obligations. In furtherance of the foregoing and without
limiting the generality thereof, the Guarantor agrees as follows:
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(i) the Guarantor's liability hereunder shall be the
immediate, direct, and primary obligation of the Guarantor and shall not be
contingent upon the Agent's or any Bank's exercise or enforcement of any remedy
it may have against the Borrower or any other Person, or against any security at
any time securing the Subject Obligations;
(ii) this Guaranty is a guaranty of payment when due
and not merely of collectibility;
(iii) the Guarantor's payment of a portion, but not
all, of the Subject Obligations shall in no way limit, affect, modify or abridge
the Guarantor's liability for any portion of the Subject Obligations remaining
unsatisfied; and
(iv) the Guarantor's liability with respect to the
Subject Obligations shall remain in full force and effect without regard to, and
shall not be impaired or affected by, nor shall the Guarantor be exonerated or
discharged by, any of the following events:
(A) any Insolvency Proceeding with
respect to the Borrower, the Guarantor, any other guarantor or any
other Person, or any liquidation, winding up or dissolution of the
Borrower, the Guarantor, any other guarantor or any other Person;
(B) any limitation, discharge, or
cessation of the liability of the Borrower, the Guarantor, any other
guarantor or any other Person for any Subject Obligations due to any
statute, regulation or rule of law, or any invalidity or
unenforceability in whole or in part of any of the Subject Obligations
or the Loan Documents;
(C) any merger, acquisition,
consolidation or change in structure of the Borrower, the Guarantor or
any other guarantor or Person, or any sale, lease, transfer or other
disposition of any or all of the assets or shares of the Borrower, the
Guarantor, any other guarantor or other Person;
(D) any assignment or other transfer,
in whole or in part, of the Agent's or any Bank's interests in and
rights under this Guaranty or the other Loan Documents, including the
Agent's or any Bank's right to receive payment of the Subject
Obligations, or any assignment or other transfer, in whole or in part,
of the Agent's or any Bank's interests in and to any collateral at any
time securing the Subject Obligations;
(E) any claim, defense, counterclaim or
setoff, other than that of prior performance, that the Borrower, the
Guarantor, any other guarantor or other Person may have or assert,
including any defense arising from the unavailability of the Borrower's
commercial register reflecting the Borrower's current name, any defense
of incapacity or lack of corporate or other authority to execute any of
the Loan Documents or any defense to or excuse of performance arising
under or by virtue of any sovereign or regulatory act of any
Governmental Authority, including any payment moratorium, suspension or
forgiveness of debtor payments, bank holiday, imposition of exchange
controls, or declaration of war or national emergency;
(F) the Agent's or any Bank's
amendment, modification, renewal, extension, cancellation or surrender
of any Loan Document, any Subject Obligations, any collateral at any
time securing the Subject Obligations, or the Agent's or any Bank's
exchange, release, or waiver of any collateral at any time securing the
Subject Obligations;
(G) the Agent's or any Bank's exercise
or nonexercise of any power, right or remedy with respect to any
collateral at any time securing any of the Subject Obligations,
including the Agent's or any Bank's compromise, release, settlement or
waiver with or of the Borrower, the Guarantor, any other guarantor or
any other Person;
(H) the Agent's or any Bank's vote,
claim, distribution, election, acceptance, action or inaction in any
bankruptcy case related to the Subject Obligations;
(I) any impairment or invalidity of any
collateral at any time securing any of the Subject Obligations or any
failure to perfect any of the liens of the Agent and the Banks thereon
with respect to such collateral; and
(J) any other guaranty, whether by the
Guarantor or any other Person, of all or any part of the Subject
Obligations or any other indebtedness, obligations or liabilities of
the Borrower to the Agent or the Banks.
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SECTION 12 Consents of Guarantor. The Guarantor hereby unconditionally
consents and agrees that, without notice to or further assent from the
Guarantor:
(i) the principal amount of the Subject Obligations
may be increased or decreased and additional indebtedness or obligations of the
Borrower under the Loan Documents may be incurred, by one or more amendments,
modifications, renewals or extensions of any Loan Document or otherwise;
(ii) the time, manner, place or terms of any payment
under any Loan Document may be extended or changed, including by an increase or
decrease in the interest rate on any Subject Obligation or any fee or other
amount payable under such Loan Document, by an amendment, modification or
renewal of any Loan Document or otherwise;
(iii) the time for the Borrower's (or any other
Person's) performance of or compliance with any term, covenant or agreement on
its part to be performed or observed under any Loan Document may be extended, or
such performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms
as the Agent and the Banks may deem proper;
(iv) the Agent or the Banks may discharge or release,
in whole or in part, any other guarantor or any other Person liable for the
payment and performance of all or any part of the Subject Obligations, and may
permit or consent to any such action or any result of such action, and shall not
be obligated to demand or enforce payment upon any collateral at any time
securing the Subject Obligations, nor shall the Agent or the Banks be liable to
the Guarantor for any failure to collect or enforce payment or performance of
the Subject Obligations from any Person or to realize on any collateral
therefor;
(v) the Agent and the Banks may take and hold
security (legal or equitable) of any kind, at any time, as collateral for the
Subject Obligations, and may, from time to time, in whole or in part, exchange,
sell, surrender, release, subordinate, modify, waive, rescind, compromise or
extend such security and may permit or consent to any such action or the result
of any such action, and may apply such security and direct the order or manner
of sale thereof;
(vi) the Agent and the Banks may request and accept
other guaranties of the Subject Obligations and any other indebtedness,
obligations or liabilities of the Borrower to the Agent or the Banks and may,
from time to time, in whole or in part, surrender, release, subordinate, modify,
waive, rescind, compromise or extend any such guaranty and may permit or consent
to any such action or the result of any such action; and
(vii) the Agent and the Banks may exercise, or waive
or otherwise refrain from exercising, any other right, remedy, power or
privilege (including the right to accelerate the maturity of any Advance and any
power of sale) granted by any Loan Document or other security document or
agreement, or otherwise available to the Agent and the Banks, with respect to
the Subject Obligations, any security for any or all of the Subject Obligations,
even if the exercise of such right, remedy, power or privilege affects or
eliminates any right of subrogation or any other right of the Guarantor against
the Borrower;
all as the Agent and the Banks may deem advisable, and all with out impairing,
abridging, releasing or affecting this Guaranty.
SECTION 5 Guarantor's Waivers.
(a) Certain Waivers. The Guarantor waives and agrees
not to assert:
(i) any right to require the Agent or any Bank to
marshal assets in favor of the Borrower, the Guarantor, any other guarantor or
any other Person, to proceed against the Borrower, any other guarantor or any
other Person, to proceed against or exhaust any security at any time held for
the Subject Obligations, to give notice of the terms, time and place of any
public or private sale of personal property security constituting collateral for
the Subject Obligations or comply with any other provisions of Section 9504 of
the California UCC (or any equivalent provision of any other applicable law) or
to pursue any other right, remedy, power or privilege of the Agent or any Bank
whatsoever;
(ii) the defense of the statute of limitations in any
action hereunder or for the collection or performance of the Subject
Obligations;
(iii) any defense arising by reason of any lack of
corporate or other authority or any other defense of the Borrower, the
Guarantor or any other Person;
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(iv) any defense (other than payment) based upon the
Agent's or any Bank's errors or omissions in the administration of the Subject
Obligations;
(v) any rights to set-offs and counterclaims;
(vi) all rights and defenses arising out of an
election of remedies by the creditor, even though that election of remedies,
such as a nonjudicial foreclosure with respect to security for a guaranteed
obligations, has destroyed the Guarantor's rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the Code
of Civil Procedure or otherwise;
(vii) any rights or defenses by reason of the lack of
any fair value hearing or determination with respect to any collateral securing
the Subject Obligations, whether pursuant to California Code of Civil Procedure
Sections 580a or 726 or otherwise; and
(viii) without limiting the generality of the
foregoing, to the fullest extent permitted by law, any defenses or benefits that
may be derived from or afforded by applicable law limiting the liability of or
exonerating guarantors or sureties, or which may conflict with the terms of this
Guaranty, including any and all benefits that otherwise might be available to
the Guarantor under California Civil Code Section 1432, 2809, 2810, 2815,
2819, 2839, 2845, 2848, 2849, 2850, 2899 and 3433 and California Code of Civil
Procedure Section 580a, 580b, 580d and 726.
(b) Additional Waivers. The Guarantor waives any and all
notice of the acceptance of this Guaranty, and any and all notice of the
creation, renewal, modification, extension or accrual of the Subject
Obligations, or the reliance by the Agent and the Banks upon this Guaranty, or
the exercise of any right, power or privilege hereunder. The Subject Obligations
shall conclusively be deemed to have been created, contracted, incurred and
permitted to exist in reliance upon this Guaranty. The Guarantor waives
promptness, diligence, presentment, protest, demand for payment, notice of
default, dishonor or nonpayment and all other notices to or upon the Borrower,
the Guarantor or any other Person with respect to the Subject Obligations.
(c) Independent Obligations. The obligations of the Guarantor
hereunder are independent of and separate from the obligations of the Borrower
and any other guarantor and upon the occurrence and during the continuance of
any Event of Default (as defined in the Facility Agreement), a separate action
or actions may be brought against the Guarantor, whether or not the Borrower or
any such other guarantor is joined therein or a separate action or actions are
brought against the Borrower or any such other guarantor.
(d) Financial Condition of Borrower. The Guarantor shall not
have any right to require the Agent or the Banks to obtain or disclose any
information with respect to: (i) the financial condition or character of the
Borrower or the ability of the Borrower to pay and perform the Subject
Obligations; (ii) the Subject Obligations; (iii) any collateral at any time
securing any or all of the Subject Obligations; (iv) the existence or
nonexistence of any other guarantees of all or any part of the Subject
Obligations; (v) any action or inaction on the part of the Agent or the Banks or
any other Person; or (vi) any other matter, fact or occurrence whatsoever.
SECTION 14 Subrogation. The Guarantor shall not have, and hereby
waives, (i) any rights that it may acquire by way of subrogation under this
Guaranty, by any payment hereunder or otherwise, (ii) any rights of
contribution, indemnification, reimbursement or similar suretyship claims
arising out of this Guaranty or (iii) any other right which it might otherwise
have or acquire (in any way whatsoever) which could entitle it at any time to
share or participate in any right, remedy or security of the Banks or the Agent
as against the Borrower or other guarantors, whether in connection with this
Guaranty, any of the other Loan Documents or otherwise. If any amount shall be
paid to the Guarantor on account of the foregoing rights at any time, such
amount shall be held in trust for the benefit of the Agent and the Banks and
shall forthwith be paid to the Agent to be credited and applied to the Subject
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.
SECTION 15 Subordination.
(a) Subordination to Payment of Subject Obligations. All
payments on account of all indebtedness, liabilities and other obligations of
the Borrower to the Guarantor, whether created under, arising out of or in
connection with any documents or instruments evidencing any credit extensions to
Borrower or otherwise, including all principal on any such credit extensions,
all interest accrued thereon, all fees and all other amounts payable by the
Borrower to the Guarantor in connection therewith, whether now existing or
hereafter arising, and whether due or to become due, absolute or contingent,
liquidated or unliquidated, determined
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or undetermined (the "Intercompany Debt") shall be subject, subordinate and
junior in right of payment and exercise of remedies, to the extent and in the
manner set forth herein, to the prior payment in full in cash or cash
equivalents of the Subject Obligations.
(b) No Payments. Following the occurrence of an Event of
Default under the Facility Agreement, the Guarantor shall not accept or receive
any payment or distribution by or on behalf of the Borrower, directly or
indirectly, of assets of the Borrower of any kind or character, whether in cash,
property or securities, including on account of the purchase, redemption or
other acquisition of Intercompany Debt, as a result of any collection, sale or
other disposition of collateral, or by setoff, exchange or in any other manner,
for or on account of the Intercompany Debt ("Intercompany Debt Payments"). In
the event that, notwithstanding the provisions of this Section 7, any
Intercompany Debt Payments shall be received in contravention of this Section 7
by the Guarantor before all Subject Obligations are paid in full in cash or cash
equivalents, such Intercompany Debt Payments shall be held in trust for the
benefit of the Agent and the Banks and shall be paid over or delivered to the
Agent for application to the payment in full in cash or cash equivalents of all
Subject Obligations remaining unpaid to the extent necessary to give effect to
this Section 7, after giving effect to any concurrent payments or distributions
to the Agent and the Banks in respect of the Subject Obligations.
(c) Subordination of Remedies. As long as any Subject
Obligations shall remain outstanding and unpaid, the Guarantor shall not,
without the prior written consent of the Agent:
(i) accelerate, make demand or otherwise make due and
payable prior to the original stated maturity thereof any Intercompany Debt or
bring suit or institute any other actions or proceedings to enforce its rights
or interests under or in respect of the Intercompany Debt;
(ii) exercise any rights under or with respect to (A)
any guaranties of the Intercompany Debt, or (B) any collateral held by it,
including causing or compelling the pledge or delivery of any collateral, any
attachment of, levy upon, execution against, foreclosure upon or the taking of
other action against or institution of other proceedings with respect to any
collateral held by it, notifying any account debtors of the Borrower or
asserting any claim or interest in any insurance with respect to any collateral,
or attempt to do any of the foregoing; or
(iii) commence, or cause to be commenced, or join
with any creditor other than the Agent and the Banks in commencing, any
Insolvency Proceeding against the Borrower.
(d) Subordination upon Any Distribution of Assets of the
Borrower. In the event of any payment or distribution of assets of the Borrower
of any kind or character, whether in cash, property or securities, upon the
dissolution, winding up or total or partial liquidation or reorganization,
readjustment, arrangement or similar proceeding relating to the Borrower or its
property, whether voluntary or involuntary, or in any Insolvency Proceeding
with respect to the Borrower, or otherwise (i) all amounts owing on account of
the Subject Obligations, including all interest accrued thereon at the contract
rate both before and after the commencement of any such proceeding, whether or
not an allowed claim in any such proceeding, shall first be paid in full in
cash, or payment provided for in cash or in cash equivalents, before any
Intercompany Debt Payment is made; and (ii) to the extent permitted by
applicable law, any Intercompany Debt Payment to which the Guarantor would be
entitled except for the provisions hereof, shall be paid or delivered by the
trustee in bankruptcy, receiver, assignee for the benefit of creditors or other
liquidating agent making such payment or distribution directly to the Agent (on
behalf of the Banks) for application to the payment of the Subject Obligations
in accordance with clause (i), after giving effect to any concurrent payment or
distribution or provision therefor to the Agent or the Banks in respect of such
Subject Obligations.
(e) Authorization to Agent. If, while any Intercompany Debt
is outstanding, any Insolvency Proceeding is commenced by or against the
Borrower or its property:
(i) the Agent, when so instructed by the Majority
Banks, is hereby irrevocably authorized and empowered (in the name of the Banks
or in the name of the Guarantor or otherwise), but shall have no obligation, to
demand, xxx for, collect and receive every payment or distribution in respect of
the Intercompany Debt and give acquittance therefor and to file claims and
proofs of claim and take such other action (including voting the Intercompany
Debt) as it may deem necessary or advisable for the exercise or enforcement of
any of the rights or interests of the Agent and the Banks; and
(ii) the Guarantor shall promptly take such action as
the Agent (on instruction from the Majority Banks) may reasonably request (A) to
collect the Intercompany Debt for the account of the Banks and to file
appropriate claims or proofs of claim in respect of the Intercompany Debt, (B)
to execute and deliver to the Agent, such powers of attorney, assignments and
other instruments as it may request to enable it to enforce any and all claims
with respect to the Intercompany Debt, and (C) to collect and receive any and
all Intercompany Debt Payments.
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SECTION 16 Continuing Guaranty; Reinstatement.
(a) Continuing Guaranty. This Guaranty is a continuing
guaranty and agreement of subordination and shall continue in effect and be
binding upon the Guarantor until payment and performance in full of the Subject
Obligations.
(b) Reinstatement. This Guaranty shall continue to be
effective or shall be reinstated and revived, as the case may be, if, for any
reason, any payment of the Subject Obligations by or on behalf of the Borrower
(or receipt of any proceeds of any collateral) shall be rescinded, invalidated,
declared to be fraudulent or preferential, set aside, voided or otherwise
required to be repaid to the Borrower, its estate, trustee, receiver or any
other Person (including under the Bankruptcy Code or other state or federal
law), or must otherwise be restored by the Agent or any Bank, whether as a
result of any Insolvency Proceedings or otherwise. To the extent any payment is
so rescinded or restored, the Subject Obligations shall be revived in full force
and effect without reduction or discharge for such payment. All losses, damages,
expenses (including fees and expenses of external legal counsel and the
allocated cost of internal legal services and disbursements of internal counsel)
that the Agent or the Banks may suffer or incur as a result of any voided or
otherwise set aside payments shall be specifically covered by the indemnity in
favor of the Banks and the Agent contained in Section 17 of this Guaranty.
SECTION 17 Payments; Taxes.
(a) Payments. The Guarantor hereby agrees, in furtherance of
the foregoing provisions of this Guaranty and not in limitation of any other
right which the Agent or any Bank or any other Person may have against the
Guarantor by virtue hereof, upon the failure of the Borrower to pay any of the
Subject Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code or any similar
provision under Japanese law), the Guarantor shall forthwith pay, or cause to be
paid, in cash, to the Agent an amount equal to the amount of the Subject
Obligations then due as aforesaid (including interest which, but for the filing
of a petition in bankruptcy with respect to the Borrower, would have accrued on
such Subject Obligations, whether or not a claim is allowed against the Borrower
for such interest in any such bankruptcy proceeding). The Guarantor shall make
each payment hereunder, unconditionally in full without set-off, recoupment or
counterclaim, on the day when due, in accordance with Section 18. All such
payments shall be applied as directed by the Guarantor; provided, that following
a default by the Guarantor in the performance of its obligations hereunder, such
payments shall be promptly applied from time to time by the Agent (i) first, to
the payment of any fees, costs, expenses and other amounts due the Agent
hereunder, and (ii) second, to the payment of the other Subject Obligations in
accordance with the provisions of the Facility Agreement.
(b) Taxes.
(i) Any and all payments by the Guarantor to each
Bank or the Agent under this Guaranty shall be made free and clear of, and
without deduction or withholding, for any Taxes. In addition, the Guarantor
shall pay all Other Taxes.
(ii) The Guarantor agrees to indemnify and hold
harmless each Bank and the Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by the Bank or the Agent and any liability
(including penalties, interest, additions to tax and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. Payment under this indemnification shall be made within 30
days after the date the Bank or the Agent makes written demand therefor.
(iii) Except where such deduction or withholding
results from the failure of a Bank to comply with the terms of clause (v) below,
if the Guarantor shall be required by law to deduct or withhold any Taxes or
Other Taxes from or in respect of any sum payable hereunder to any Bank or the
Agent, then:
(A) the sum payable shall be increased
as necessary so that after making all required deductions and
withholdings (including deductions and withholdings applicable to
additional sums payable under this Section) such Bank or the Agent, as
the case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made;
(B) the Guarantor shall make such
deductions and withholdings;
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(C) the Guarantor shall pay the full
amount deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable law; and
(D) the Guarantor shall also pay to each
Bank or the Agent for the account of such Bank, at the time interest is
paid, all additional amounts which the respective Bank specifies as
necessary to preserve the after-tax yield the Bank would have received
if such Taxes or Other Taxes had not been imposed.
(iv) Within 30 days after the date of any payment by
the Guarantor of Taxes or Other Taxes, the Guarantor shall furnish the Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Agent.
(v) Each Bank that is organized under the laws of a
jurisdiction outside the United States hereby agrees that, if and to the extent
it is legally able to do so, it shall deliver in a timely fashion to the
Guarantor and the Agent, as applicable, such certificates, documents or other
evidence that may be available to establish, if applicable, the nonapplicability
to such Bank of, or such Bank's exemption from, United States federal
withholding tax under the Internal Revenue Code in respect of any sum payable
hereunder.
SECTION 18 Representations and Warranties. The Guarantor represents and
warrants to the Agent and each Bank that:
(a) Organization and Powers. The Guarantor is a corporation
duly organized, validly existing and in good standing under the law of the
jurisdiction of its incorporation, is qualified to do business and is in good
standing in each jurisdiction in which the failure so to qualify or be in good
standing would have a Material Adverse Effect and has all requisite power and
authority to own its assets and carry on its business and to execute, deliver
and perform its obligations under the Guaranty.
(b) Authorization; No Conflict. The execution, delivery and
performance by the Guarantor of this Guaranty have been duly authorized by all
necessary corporate action of the Guarantor, and do not and will not: (i)
contravene the terms of the certificate of incorporation, or the terms of the
bylaws, of the Guarantor or result in a breach of or constitute a default under
any material indenture or loan or credit agreement or any other material
agreement, lease or instrument to which the Guarantor is a party or by which it
or its properties may be bound or affected; or (ii) violate any provision of any
law, rule, regulation, order, writ, judgment, injunction, decree or the like
binding on or affecting the Guarantor.
(c) Binding Obligation. This Guaranty is the legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms, except to the extent the enforceability hereof would
be subject to bankruptcy, insolvency, receivership or similar laws providing
relief from creditors, or principles of equity generally.
(d) Governmental Consents. No authorization, consent,
approval, license, exemption of, or filing or registration with, any
Governmental Authority, or approval or consent of any other Person, is required
for the due execution, delivery or performance by the Guarantor of this
Guaranty.
(e) No Default. No Default or Event of Default (as defined in
the Facility Agreement) exists or would result from the execution and delivery
of the Facility Agreement or this Guaranty or from the performance by the
Borrower of its obligations under the Facility Agreement or by the Guarantor of
the Subject Obligations. As of the Closing Date, neither the Guarantor nor any
Subsidiary is in default under or with respect to any contractual obligation in
any respect which, individually or together with all such defaults, could
reasonably be expected to have a Material Adverse Effect, or that would, if such
default had occurred after the Closing Date, create an Event of Default (as
defined in the Facility Agreement). The Subject Obligations are "Senior Debt" as
defined in the Indenture, dated as of March 23, 1994, by and between the
Guarantor and The First National Bank of Boston executed in connection with the
Guarantor's 5 1/2% Convertible Subordinated Notes Due 2001.
(f) Taxes. The Guarantor and its Subsidiaries have filed all
Federal and other material tax returns and reports required to be filed, and
have paid all Federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
the Guarantor or any Subsidiary that would, if made, have a Material Adverse
Effect.
(g) Regulated Entities. None of the Guarantor, any Person
controlling the Guarantor, or any Subsidiary, is an "Investment Company" within
the meaning of the Investment Company Act of 1940. The Guarantor is not subject
to regulation
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under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
(h) Title to Properties. The Guarantor and each Subsidiary
have good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of
their respective businesses, except for such defects in title as could not,
individually or in the aggregate, have a Material Adverse Effect. As of the
Closing Date, the property of the Guarantor and its Subsidiaries is subject to
no Liens, other than Permitted Liens.
(i) Litigation. Except as set forth on Schedule 2, there are
no actions, suits or proceedings pending or, to the best of the Guarantor's or
the Borrower's knowledge, threatened against or affecting the Guarantor or any
of its Subsidiaries or the properties of the Guarantor or any of its
Subsidiaries before any Governmental Authority or arbitrator which would be
reason ably likely to result in a Material Adverse Effect.
(j) Compliance with Consents and Licenses. Every consent
required by the Guarantor or any Subsidiary (including those required under or
pursuant to any Environmental Law) in connection with the conduct of its
business and the ownership, use, exploitation or occupation of its property and
assets has been obtained and is in full force and effect and there has not been
any default in the observance of the conditions and restrictions (if any)
imposed in, or in connection with, any of the same, except where the failure to
obtain any of the foregoing would not reasonably be expected to have a Material
Adverse Effect.
(k) Compliance with Environmental Laws. Except as set forth on
Schedule 3, to the best of the Guarantor's or the Borrower's knowledge after due
investigation, (i) the properties of the Guarantor and its Subsidiaries do not
contain and have not previously contained (at, under, or about any such
property) any Hazardous Substances or other contamination (A) in amounts or
concentrations that constitute or constituted a violation of, or could give rise
to liability under, any Environmental Laws, in either case where such violation
or liability could reasonably be expected to result in a Material Adverse
Effect, (B) which could interfere with the continued operation of such property,
or (C) which could materially impair the fair market value thereof; and (ii)
there has been no transportation or disposal of Hazardous Substances from, nor
any release or threatened release of Hazardous Substances at or from, any
property of the Guarantor or any of its Subsidiaries in violation of or in any
manner could give rise to liability under any Environmental Laws, where such
violation or liability, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
(l) ERISA. Except as specifically disclosed to the Banks in
writing prior to the Closing Date: (i) each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (ii) there are no pending, or to the best knowledge of the
Guarantor, threatened, claims, actions or lawsuits, or action by any
governmental authority, with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect; (iii) there has
been no prohibited transaction or other violation of the fiduciary
responsibility rule with respect to any Plan which could reasonably result in a
Material Adverse Effect; (iv) no ERISA Event has occurred or is reasonably
expected to occur with respect to any Pension Plan; (v) no Pension Plan has any
Unfunded Pension Liability; (vi) the Guarantor has not incurred, nor does it
reasonably expect to incur, any liability under Title IV of ERISA with respect
to any Pension Plan (other than premiums due and not delinquent under Section
4007 of ERISA); (vii) no trade or business (whether or not incorporated under
common control with the Guarantor within the meaning of Section 414(b), (c), (m)
or (o) of the Code) maintains or contributes to any Pension Plan or other Plan
subject to Section 412 of the Code; and (viii) neither the Guarantor nor any
entity under common control with the Guarantor in the preceding sentence has
ever contributed to any multiemployer plan within the meaning of Section
4001(a)(3) of ERISA.
(m) Insurance. The properties of the Guarantor and its
Subsidiaries are insured against losses and damages of the kinds and in amounts
which are deemed prudent by the Guarantor in its reasonable business judgment
and within the general parameters customary among similarly situated businesses
in the industry, and such insurance is maintained with financially sound and
reputable insurance companies or pursuant to a plan or plans or self-insurance
to such extent as is usual for companies of similar size engaged in the same or
similar businesses and owning similar properties.
(n) Financial Statements. The audited consolidated balance
sheet of the Guarantor and its Subsidiaries as at December 31, 1994 and the
related consolidated statements of income, shareholders' equity and cash flows
for the fiscal year then ended, and the unaudited consolidated balance sheet of
the Guarantor and its Subsidiaries as at September 30, 1995 and the related
consolidated statements of income, shareholders' equity and cash flows, for the
quarter then ended and the nine-month period then ended, are complete and
correct and fairly present the financial condition of the Guarantor and its
Subsidiaries as at such dates and the results of operations of the Guarantor and
its Subsidiaries for the periods covered by such statements, in each case in
accordance with GAAP consistently applied, subject, in the case of the September
30, 1995 financial statements, to normal year-end adjustments and the absence of
notes. Since December 31, 1994, there has been no Material Adverse Effect.
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(o) Liabilities. Neither the Guarantor nor any of its
Subsidiaries has any material liabilities, fixed or contingent, that are not
reflected in the financial statements referred to in subsection (n), in the
notes thereto or otherwise disclosed in writing to the Banks, other than
liabilities arising in the ordinary course of business since September 30, 1995.
(p) Labor Disputes, Etc. There are no strikes, lockouts or
other labor disputes against the Guarantor or any Subsidiary, or, to the best of
the Guarantor's or the Borrower's knowledge, threatened against or affecting the
Guarantor or any Subsidiary which may result in a Material Adverse Effect.
(q) Consideration. The Guarantor has received at least
"reasonably equivalent value" (as such phrase is used in Section 548 of the
Bankruptcy Code, in Section 3439.04 of the California Uniform Fraudulent
Transfer Act and in comparable provisions of other applicable law) and at least
sufficient consideration to support its obligations hereunder in respect of the
Subject Obligations.
(r) Independent Investigation. The Guarantor hereby
acknowledges that it has undertaken its own independent investigation of the
financial condition of the Borrower and all other matters pertaining to this
Guaranty and further acknowledges that it is not relying in any manner upon any
representation or statement of the Agent or any Bank with respect thereto. The
Guarantor represents and warrants that it has received and reviewed copies of
the Loan Documents and that it is in a position to obtain, and it hereby assumes
full responsibility for Borrower obtaining, any additional information
concerning the financial condition of the Borrower and any other matters
pertinent hereto that the Guarantor may desire. The Guarantor is not relying
upon or expecting the Agent or any Bank to furnish to the Guarantor any
information now or hereafter in the Agent's or any such Bank's possession
concerning the financial condition of the Borrower or any other matter.
(s) Name of Borrower. The Borrower's true name is set forth in
the preamble to this Guaranty, and the Borrower has made all applicable filings
required to cause such name to be reflected on its commercial register.
(t) Full Disclosure. None of the representations or warranties
made by the Guarantor in this Guaranty or by the Borrower in the Facility
Agreement as of the date such representations and warranties are made, and none
of the statements contained in any exhibit, report, statement or certificate
furnished by or on behalf of the Guarantor or the Borrower in connection with
this Guaranty or the Facility Agreement, contains any untrue statement of a
material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, not misleading in any material respect as of the time
when made or delivered.
SECTION 11 Affirmative Covenants. So long as any Subject Obligations
shall remain unpaid or any Bank shall have any Commitment, the Guarantor agrees
as follows:
(a) Financial Statements and Other Reports. The Guarantor will
furnish to the Agent in sufficient copies for distribution to the Banks:
(i) as soon as available and in any event within 55
days after the end of each of the first three fiscal quarters of each fiscal
year of the Guarantor, a consolidated balance sheet of the Guarantor and its
Subsidiaries as of the end of such quarter, and the related consolidated
statements of income, shareholders' equity and cash flows of the Guarantor and
its Subsidiaries for such quarter and the portion of the fiscal year through
the end of such quarter, prepared in accordance with GAAP consistently applied,
all in reasonable detail and setting forth in comparative form the figures for
the corresponding period in the preceding fiscal year;
(ii) as soon as available and in any event within 100
days after the end of each fiscal year of the Guarantor, a consolidated balance
sheet of the Guarantor and its Subsidiaries as of the end of such fiscal year,
and the related consolidated statements of income, shareholders' equity and cash
flows of the Guarantor and its Subsidiaries for such fiscal year, prepared in
accordance with GAAP consistently applied, all in reasonable detail and setting
forth in comparative form the figures for the previous fiscal year, and in the
case of such consolidated financial statements, accompanied by a report thereon
of Price Waterhouse LLP or another firm of independent certified public
accountants of recognized national standing, which report shall be unqualified
as to scope of audit or the status of the Guarantor and its Subsidiaries as a
going concern;
(iii) together with the financial statements required
pursuant to clauses (i) and (ii), a Compliance Certificate of a Responsible
Officer as of the end of the applicable accounting period, which shall contain a
certification of a Responsible Officer of the Guarantor stating that such
financial statements fairly present the financial condition of the Guarantor
and its Subsidiaries as at such date and the results of operations of the
Guarantor and its Subsidiaries for the period ended on such date and
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have been prepared in accordance with GAAP consistently applied, subject to
changes resulting from normal, year-end audit adjustments and except for the
absence of notes; and
(iv) promptly after the giving, sending or filing
thereof, copies of all reports, if any, which the Guarantor or any of its
Subsidiaries sends to the holders of its respective capital stock or other
securities and of all reports or filings, if any, by the Guarantor or any of its
Subsidiaries with the SEC or any national securities exchange.
(b) Additional Information. The Guarantor will furnish to the
Agent the following information, and will cause the Borrower to furnish to the
Agent the following information insofar as it relates to the Borrower:
(i) promptly after the Guarantor or the Borrower has
knowledge or becomes aware thereof, notice of the occurrence or existence of any
Default;
(ii) prompt written notice of any action, event or
occurrence that could reasonably be expected to result in a Material Adverse
Effect due to environmental liability under Environmental Laws;
(iii) prompt written notice of each action, suit and
proceeding before any Governmental Authority or arbitrator pending, or to the
best of the Guarantor's or the Borrower's knowledge, threatened against or
affecting the Guarantor or any of its Subsidiaries which if adversely determined
would involve an aggregate liability of $10,000,000 (or its equivalent in any
other currency) or more in excess of amounts covered by third-party insurance,
or (B) otherwise may have a Material Adverse Effect;
(iv) promptly after the Guarantor has knowledge or
becomes aware thereof, (A) notice of the occurrence of any Termination Event,
together with a copy of any notice of such Termination Event to the PBGC, and
(B) the details concerning any action taken or proposed to be taken by the IRS,
PBGC, Department of Labor or other Person with respect thereto;
(v) promptly upon the commencement or increase of
contributions to, the adoption of, or an amendment to, a Plan by the Guarantor
or an ERISA Affiliate, if such commencement or increase of contributions,
adoption, or amendment could reasonably be expected to result in a net increase
in unfunded liability to Guarantor or an ERISA Affiliate in excess of
$10,000,000, a calculation of the net increase in unfunded liability;
(vi) promptly after filing or receipt thereof by the
Guarantor or any ERISA Affiliate, copies of the following:
(A) any notice received from the PBGC of
intent to terminate or have a trustee appointed to
administer any Pension Plan;
(B) any notice received from the sponsor of
a Multiemployer Plan concerning the imposition, delinquent
payment, or amount of withdrawal liability;
(C) any demand by the PBGC under Subtitle D
of Title IV of ERISA; and
(D) any notice received from the IRS
regarding the disqualification of a Plan intended to qualify
under Section 401(a) of the Internal Revenue Code;
(vii) within 30 days of the date thereof, or, if
earlier, on the date of delivery of any financial statements pursuant to
subsection 11(a), notice of any material change in accounting policies or
financial reporting practices by the Guarantor or the Borrower;
(viii) promptly after the occurrence thereof, notice
of any labor controversy resulting in or threatening to result in any strike,
work stoppage, boycott, shutdown or other material labor disruption against or
involving the Guarantor or any of its Subsidiaries which could result in a
Material Adverse Effect;
(ix) prompt written notice of any change in the
fiscal year of the Guarantor or of the Borrower;
(x) prompt written notice of any other condition or
event which has resulted, or that could reasonably be expected to result, in a
Material Adverse Effect; and
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(xi) such other information respecting the
operations, properties, business or condition (financial or otherwise) of the
Guarantor or its Subsidiaries as any Bank (through the Agent) may from time to
time reasonably request.
Each notice pursuant to this subsection (b) shall be accompanied by a written
statement by a Responsible Officer of the Guarantor (or of the Borrower, with
respect to occurrences affecting the Borrower) setting forth details of the
occurrence referred to therein, and stating, to the extent then known or
proposed, what action the Guarantor or the Borrower, as the case may be, may
take with respect thereto.
(c) Preservation of Corporate Existence, Etc. The Guarantor
shall, and shall cause each Subsidiary to:
(i) preserve and maintain in full force and effect
its corporate existence and good standing under the laws of its state or
jurisdiction of incorporation, except in the case of any Subsidiary (other than
the Borrower) to the extent that the failure to obtain or maintain the foregoing
would not reasonably be expected to have a Material Adverse Effect;
(ii) preserve and maintain in full force and effect
all governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that the failure to obtain or maintain the foregoing would not
reasonably be expected to have a Material Adverse Effect;
(iii) use reasonable efforts, in the ordinary course
of business, to preserve its business organization and goodwill, except in the
case of any Subsidiary (other than the Borrower) to the extent that the failure
to obtain or maintain the foregoing would not reasonably be expected to have a
Material Adverse Effect; and
(iv) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.
(d) Payment of Taxes, Etc. The Guarantor will, and will cause
each of its Subsidiaries to, pay and discharge all taxes, fees, assessments and
governmental charges or levies imposed upon it or upon its properties or assets
prior to the date on which penalties attach thereto, and all lawful claims for
labor, materials and supplies which, if unpaid, might become a Lien upon any
properties or assets of the Guarantor or any Subsidiary, except to the extent
such taxes, fees, assessments or governmental charges or levies, or such claims,
are being contested in good faith by appropriate proceedings and are adequately
reserved against in accordance with GAAP.
(e) Licenses. The Guarantor will, and will cause each of its
Subsidiaries to, obtain and maintain all licenses, authorizations, consents,
filings, exemptions, registrations and other governmental approvals necessary in
connection with the execution, delivery and performance of the Loan Documents,
the consummation of the transactions therein contemplated or the operation and
conduct of its business and ownership of its properties, except to the extent
that the failure to obtain or maintain the foregoing would not reasonably be
expected to have a Material Adverse Effect.
(f) Maintenance of Property. The Guarantor shall maintain, and
shall cause each Subsidiary to maintain, and preserve all its property which is
used or useful in its business in good working order and condition, ordinary
wear and tear excepted.
(g) Insurance. The Guarantor shall maintain, and shall cause
each Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against losses
and damages of the kinds and in amounts which are deemed prudent by the
Guarantor in its reasonable business judgment and within the general parameters
customary among similarly situated businesses in the industry.
(h) Payment of Obligations. The Guarantor shall, and shall
cause each Subsidiary to, pay and discharge as the same shall become due and
payable, all their respective obligations and liabilities, including:
(i) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets, unless the
same are being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by the Guarantor or such
Subsidiary;
(ii) all lawful claims which, if unpaid, would by
law become a Lien (other than a Permitted Lien) upon its property, except to the
extent such claims are being contested in good faith, via appropriate
proceedings, with adequate reserves established therefor in accordance with
GAAP; and
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(iii) all Indebtedness, including obligations of the
Borrower under the Facility Agreement, as and when due and payable or within any
grace periods applicable thereto, but subject to any subordination provisions
contained in any instrument or agreement evidencing such Indebtedness.
(i) Compliance with Laws. The Guarantor shall comply, and
shall cause each Subsidiary to comply, in all material respects with the
requirements of all Environmental Laws and all applicable laws, rules,
regulations and orders of any Governmental Authority having jurisdiction over it
or its business.
(j) Compliance with ERISA. The Guarantor shall, and shall
cause each of its ERISA Affiliates to: (a) maintain each Plan in compliance in
all material respects with the applicable provisions of ERISA, the Code and
other federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; and (c) make all required
contributions to any Plan subject to Section 412 of the Code.
(k) Inspection of Property and Books and Records. The
Guarantor shall maintain and shall cause each Subsidiary to maintain proper
books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Guarantor and
such Subsidiary. The Guarantor shall permit, and shall cause each Subsidiary to
permit, representatives and independent contractors of the Agent or any Bank to
visit and inspect any of their respective properties, to examine their
respective corporate, financial and operating records, and make copies thereof
or abstracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent public
accountants, all at the expense of the Guarantor and at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Guarantor; provided, however, that (i) unless
an Event of Default under the Facility Agreement shall have occurred and be
continuing, (A) the Guarantor shall be responsible under this paragraph (k) for
the costs and expenses of the Agent only, (B) all inspections, visits,
examinations and other actions permitted or authorized hereunder shall be
coordinated only through the Guarantor, and (C) physical inspections of the
Borrower's facilities in Japan shall be made on two weeks' prior notice and
shall occur no more frequently than semiannually in the case of inspections by
the Agent and no more frequently than annually otherwise, and (ii) when an Event
of Default under the Facility Agreement exists the Agent or any Bank may make
any visit, inspection or examination or take any other action authorized
hereunder at the expense of the Guarantor at any time during normal business
hours, without advance notice and without being subject to any of the other
restrictions described in clause (i).
(l) Margin Certificate. The Guarantor shall from time to time
furnish to the Borrower for delivery by it pursuant to the Facility Agreement a
Margin Certificate.
(m) Further Assurances and Additional Acts. The Guarantor
shall, and shall cause the Borrower to, execute, acknowledge, deliver, file,
notarize and register at its own expense all such further agreements,
instruments, certificates, documents and assurances and perform such acts as the
Agent or the Majority Banks shall deem reasonably necessary or appropriate to
effectuate the purposes of the Loan Documents, and promptly provide the Bank
with evidence of the foregoing satisfactory in form and substance to the Agent
and the Majority Banks.
SECTION 12 Negative Covenants. So long as any Subject Obligations shall
remain unpaid or any Bank shall have any Commitment, the Guarantor agrees that:
(a) Liens; Negative Pledges. The Guarantor will not, and will
not permit any of its Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon or with respect to any of its properties, revenues or assets,
whether now owned or hereafter acquired, other than (i) Permitted Liens and (ii)
other Liens that, in the aggregate at any time, secure obligations in an amount
not in excess of 10% of Consolidated Total Assets.
(b) Change in Nature of Business. The Guarantor will not, and
will not permit any of its Subsidiaries to, engage in any material line of
business other than the electronics business and other businesses incidental or
reasonably related thereto.
(c) Sales of Assets. The Guarantor will not, and will not
permit any of its Subsidiaries to, convey, sell, lease, transfer, or otherwise
dispose of, or part with control of (whether in one transaction or a series of
transactions) any assets (including any shares of stock in any Subsidiary or
other Person), except:
(i) sales or other dispositions of inventory in
the ordinary course of business;
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(ii) sales or other dispositions of assets in the ordinary
course of business which have become worn out or obsolete or which are promptly
being replaced;
(iii) sales of accounts receivable to financial
institutions not affiliated with the Guarantor; provided that (A) the discount
rate shall not at any time exceed 10%, (B) the amount of all accounts receivable
permitted to be sold in any fiscal quarter shall not exceed 30% of the
consolidated accounts receivable of the Guarantor and its Subsidiaries,
determined as of the end of the next preceding fiscal quarter (or fiscal year,
as the case may be), and (C) the sole consideration received for such sales
shall be cash; and
(iv) sales or other dispositions of assets outside
the ordinary course of business which do not constitute Substantial Assets.
For purposes of clause (iv), a sale, lease, transfer or other disposition of
assets shall be deemed to be of "Substantial Assets" if such assets, when added
to all other assets conveyed, sold, leased, transferred or otherwise disposed of
in any period of four consecutive fiscal quarters (other than assets sold in the
ordinary course of business or pursuant to clause (iii)), shall exceed 10% of
Consolidated Total Assets as determined as of the end of the fiscal quarter of
the Guarantor immediately preceding the date of determination.
(d) Loans and Investments. The Guarantor will not, and will
not permit any of its Subsidiaries to, make any investment in any Person, or
otherwise extend any credit to or make any additional investments in any Person,
other than in connection with:
(i) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sales of goods or services in
the ordinary course of business;
(ii) Permitted Investments;
(iii) additional purchases of or investments in the
stock of Subsidiaries;
(iv) advances or loans in the ordinary course of its
business to its employees, officers and directors; or
(v) investments otherwise permitted in this Guaranty.
(e) Restrictions on Fundamental Changes and Acquisitions. The
Guarantor will not, and will not permit the Borrower to, liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or enter into any
Acquisition, provided that the Guarantor or the Borrower may enter into and
consummate the following Acquisitions, subject to the provisos below (each a
"Permitted Acquisition"):
(i) a merger of the Guarantor with any other Person,
if the Guarantor is the surviving corporation; or a merger of
the Borrower and the Guarantor as long as no Material Adverse
Effect shall result therefrom; and
(ii) other Acquisitions in which the consideration
paid consists of stock or cash or a combination of cash and
stock;
provided, that the aggregate consideration paid in cash in connection with any
Permitted Acquisition made during any period of four consecutive fiscal
quarters, when added to the cash consideration paid in connection with all other
Permitted Acquisitions during such period, shall not exceed the lesser of (A) an
amount equal to 25% of Consolidated Tangible Net Worth, determined as of the
last day of the fiscal quarter (or fiscal year) of the Guarantor most recently
ended or (B) an amount equal to 50% of the cash balance as shown on the
consolidated balance sheet of the Guarantor and its Subsidiaries as of such day;
and
provided further, that in any event, (x) the Guarantor shall give to the Agent
prior written notice of any proposed Acquisition and concurrently with such
notice shall deliver to the Agent pro forma financial statements of the
Guarantor and its Subsidiaries and a certificate of a Responsible Officer of the
Guarantor setting forth pro forma calculations of the covenants set forth in
Section 13, in each case after giving effect to the proposed Acquisition, (y) no
Permitted Acquisition shall be made while there exists a Default or if a Default
would occur as a result thereof and (z) the acquired or other Person in any
Acquisition shall be in the electronics business or other business incidental or
reasonably related thereto.
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(f) Transactions with Related Parties. The Guarantor will not,
and will not permit any of its Subsidiaries to, enter into any transaction,
including the purchase, sale or exchange of property or the rendering of any
services, with any Affiliate, any officer or director thereof or any Person
which beneficially owns or holds 20% or more of the equity securities, or 20% or
more of the equity interest, thereof (a "Related Party"), or enter into, assume
or suffer to exist, or permit any Subsidiary to enter into, assume or suffer to
exist, any employment or consulting contract with any Related Party, except (i)
a transaction or contract which is in the ordinary course of the Guarantor's or
such Subsidiary's business, including a transaction in the ordinary course of
business between or among the Guarantor and one or more of its Subsidiaries, and
(ii) any other transaction which is upon fair and reasonable terms not less
favorable to the Guarantor or such Subsidiary than it would obtain in a
comparable arm's length transaction with a Person not a Related Party. For
purposes of this paragraph (f), the sale, transfer or disposition of more than
30% of its assets (in any transaction or a series of related transactions) by
the Guarantor or any Subsidiary shall be deemed to be outside the ordinary
course of business.
(g) Accounting Changes. The Guarantor shall not, and shall not
suffer or permit any Subsidiary to, make any significant change in accounting
treatment or reporting practices, except as required or permitted by GAAP (or,
in the case of any Subsidiary domiciled in a jurisdiction other than the United
States, in accordance with generally accepted accounting principles and
practices in such jurisdiction).
(h) Distributions. The Guarantor will not declare or pay any
dividends in respect of its capital stock, or purchase, redeem, retire or
otherwise acquire for value any of its capital stock now or hereafter
outstanding, return any capital to its shareholders as such, or make any
distribution of assets to its shareholders as such, or permit any of its
Subsidiaries to purchase, redeem, retire, or otherwise acquire for value any
stock of the Guarantor, except that the Guarantor may:
(i) declare and deliver dividends and distributions
payable only in common stock of the Guarantor;
(ii) purchase shares of its capital stock from time
to time in connection with the issuance of shares under the Guarantor's employee
stock option plans; provided, however, that the aggregate purchase price for all
such shares in any fiscal year of the Guarantor shall not exceed $10,000,000;
(iii) purchase, redeem, retire, or otherwise acquire
shares of its capital stock with the proceeds received from a substantially
concurrent issue of new shares of its capital stock; and
(iv) in addition to the dividends, purchases,
redemptions, retirements and other acquisitions permitted by the foregoing
paragraphs (i) through (iii), declare and deliver dividends and distributions,
and purchase, redeem, retire, or otherwise acquire shares of its capital stock,
in an aggregate amount not exceeding $100,000,000 in any period of four
consecutive quarters.
SECTION 21 Financial Covenants. So long as of the Subject Obligations
shall remain unpaid or any Bank shall have any Commitment, the Guarantor agrees
that:
(a) Senior Debt to Total Capital. The Guarantor will maintain
a ratio of Senior Debt to Total Capital of not more than 0.35 to 1.0 as of the
end of each of the Guarantor's fiscal quarters.
(b) Total Leverage Ratio. The Guarantor will maintain a ratio
of the sum (without duplication) of (i) Consolidated Total Liabilities and (ii)
Guaranty Obligations (determined on a consolidated basis for the Guarantor and
its Subsidiaries) to Consolidated Tangible Net Worth of not more than (x) 1.0 to
1.0 as of the end of each of the Guarantor's fiscal quarters in the Guarantor's
1995 and 1996 fiscal years and (y) 0.75 to 1.0 as of the end of each of the
Guarantor's fiscal quarters thereafter;
(c) Quick Ratio. The Guarantor will maintain a ratio of
Consolidated Quick Assets to Consolidated Current Liabilities of not less than
1.35 to 1.0 as of the end of any fiscal quarter of the Guarantor;
(d) Minimum Consolidated Tangible Net Worth. The Guarantor
will maintain Consolidated Tangible Net Worth (exclusive of the cumulative
translation adjustment account as reported in the consolidated balance sheet of
the Guarantor and its Subsidiaries as of such date) as of the end of each of the
Guarantor's fiscal quarters of not less than $997,000,000 plus 100% of the
net proceeds received by the Guarantor or any Subsidiary from the sale or
issuance of equity securities (including equity securities issued upon the
conversion of Subordinated Debt) to any Person other than the Guarantor or any
Subsidiary after September 30, 1995 plus 80% of positive Consolidated Net
Income, if any, for each fiscal quarter elapsed after September 30, 1995;
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(e) Debt Service Coverage Ratio. The Guarantor will maintain a
ratio of (A) the sum of Consolidated EBIT plus Consolidated Rental Expense to
(B) the sum of Consolidated CMLTD plus Consolidated Interest Expense plus
Capitalized Interest plus Consolidated Rental Expense of not less than 2.0 to
1.0 for any period of four consecutive fiscal quarters of the Guarantor;
(f) Profitability. During any period of four consecutive
fiscal quarters, the Guarantor, on a consolidated basis, shall not incur (a)
more than two quarterly losses or (b) losses in excess of $45,000,000 in the
aggregate for any one or two quarters. The Guarantor, on a consolidated basis,
shall be profitable for any period of four consecutive fiscal quarters; and
(g) Subordinated Debt. Subordinated Debt of the Guarantor and
its consolidated Subsidiaries shall not exceed (A) $500,000,000 at any time
during the Guarantor's 1995 and 1996 fiscal years or (B) $750,000,000 at any
time thereafter; and the Guarantor shall not, and shall not permit any of its
Subsidiaries to, make any voluntary or optional payment or repayment on,
redemption, exchange or acquisition for value of, or any sinking fund or similar
payment with respect to, any Subordinated Debt if a Default shall then exist or
would occur as a result thereof.
SECTION 14 Event of Default. Any of the following shall constitute an
"Event of Default":
(a) Representation or Warranty. Any representation or warranty
by the Guarantor or the Borrower made herein or in the Facility Agreement, or
which is contained in any certificate, document or financial or other statement
by the Guarantor or the Borrower or any Responsible Officer of the Guarantor or
the Borrower, furnished at any time under this Guaranty, the Facility Agreement
or any other Loan Document, is incorrect in any material respect, on or as of
the date made; or
(b) Specific Defaults. The Guarantor fails to perform or
observe any term, covenant or agreement contained in any of Sections 11(b),
11(h)(iii) (in respect of the Borrower's obligations under the Facility
Agreement), 12 or 13; or
(c) Other Defaults. The Guarantor fails to perform or observe
any other term or covenant contained in this Guaranty, and such default shall
continue unremedied for a period of 30 days after the earlier of (i) the date
upon which a Responsible Officer of the Guarantor knew or reasonably should have
known of such failure or (ii) the date upon which written notice thereof is
given to the Guarantor by the Agent or any Bank; or
(d) Default Under Other Indebtedness. The Guarantor or any of
its Subsidiaries shall fail (i) to make any payment of any principal of, or
interest or premium on, any Indebtedness (other than in respect of the Advances)
in an aggregate principal amount outstanding of at least $10,000,000 (or its
equivalent in any other currency) when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the agreement
or instrument relating to such Indebtedness as of the date of such failure, or
(ii) to perform or observe any term, covenant or condition on its part to be per
formed or observed under any agreement or instrument relating to any such
Indebtedness, when required to be performed or observed, and such failure shall
continue after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such failure to perform or observe is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness
without any further action by the holder thereof; or any such Indebtedness shall
be declared to be due and payable, or required to be prepaid (other than by a
contractually required prepayment), prior to the stated maturity thereof; or
any facility or commitment available to the Guarantor or any Subsidiary relating
to Indebtedness in an aggregate amount at any one time of not less than
$10,000,000 (or its equivalent in any other currency) is withdrawn, suspended or
cancelled by reason of any default (however described) of the Guarantor or such
Subsidiary; or
(e) Insolvency; Voluntary Proceedings. The Guarantor or any
Subsidiary (i) ceases or fails to be Solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
formal corporate action to effectuate or authorize any of the foregoing; or
(f) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Guarantor or any Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the Guarantor's or any Subsidiary's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Guarantor or any Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding;
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or (iii) the Guarantor or any Subsidiary acquiesces in the appointment of a
receiver, trustee, custodian, conservator, liquidator, mortgagee in possession
(or agent therefor), or other similar Person for itself or a substantial portion
of its property or business; or
(g) Judgments. (i) A final nonappealable judgment or order for
the payment of money against the Guarantor or any of its Subsidiaries shall
remain unpaid 90 days following the due date for such payment and that is
reasonably expected to result in a Material Adverse Effect; or (ii) any
non-monetary judgment or order shall be rendered against the Guarantor or any
such Subsidiary which has or would reasonably be expected to have a Material
Adverse Effect; or
(h) Process Issued. A warrant of attachment, execution,
distraint, or similar process against any substantial part of the assets of the
Guarantor or any of its Subsidiaries is issued which remains undismissed or
undischarged for a period of 30 days, if as a result thereof there is reasonably
expected to occur a Material Adverse Effect; or
(i) Seizure. All or a material part of the undertaking,
assets, rights or revenues of the Guarantor or the Borrower are seized,
nationalized, expropriated or compulsorily acquired by or under the authority of
any Governmental Authority; or
(j) ERISA. (i) an ERISA Event shall occur with respect to a
Pension Plan which has resulted or could reasonably be expected to result in
liability of the Guarantor under Title IV of ERISA to the Pension Plan or PBGC
in an aggregate amount in excess of $10,000,000; (ii) the commencement or
increase of contributions to, or the adoption of or the amendment of a Pension
Plan by the Guarantor which has resulted or could reasonably be expected to
result in an increase in Unfunded Pension Liability among all Pension Plans in
an aggregate amount in excess of $10,000,000; or (iii) any of the
representations and warranties contained in subsection 10(l) hereof shall cease
to be true and correct which, individually or in combination, has resulted or
could reasonably be expected to result in a Material Adverse Effect; or
(k) Dissolution, Etc. The Guarantor or any of its Subsidiaries
shall (i) liquidate, wind up or dissolve (or suffer any liquidation, wind-up or
dissolution), except to the extent expressly permitted by subsection 12(g), (ii)
suspend its operations other than in the ordinary course of business, or (iii)
take any corporate action to authorize any of the actions or events set forth
above in this subsection (k); or
(l) Ownership of Borrower. The Borrower shall cease to be a
wholly-owned indirect or direct Subsidiary of the Guarantor, except as permitted
hereunder; or
(m) Change in Ownership or Control. (i) Any Person, or two or
more Persons acting in concert, shall acquire beneficial ownership, directly or
indirectly, or shall enter into a contract or arrangement (A) for the
acquisition of the securities of the Guarantor (or other securities convertible
into such securities) representing 30% or more of the combined voting power of
all securities of the Guarantor entitled to vote in the election of directors,
or (B) which upon consummation will result in its or their acquisition of, or
control over, securities of the Guarantor (or other securities convertible into
such securities) representing 30% or more of the combined voting power of all
securities of the Guarantor entitled to vote in the election or directors; or
(ii) during any period of up to 12 consecutive months commencing after the
Closing Date, individuals who at the beginning of such period were directors of
the Guarantor shall cease for any reason to constitute a majority of the Board
of Directors of the Guarantor, unless the Persons replacing such individuals
were nominated by the Board of Directors of the Guarantor.
(n) Repudiation. This Guaranty is for any reason revoked,
invalidated or repudiated, or otherwise ceases to be in full force and effect,
or the Guarantor or any other Person contests the validity or enforceability of
this Guaranty or denies that it has any further liability hereunder.
(o) Material Adverse Effect. A Material Adverse Effect shall
have occurred.
Upon the occurrence of an Event of Default, the Agent and the
Banks shall have the rights and remedies set forth in Clause 11 of the Facility
Agreement.
SECTION 15 Notices. All notices, requests and other communications
provided for hereunder shall be in writing and delivered by prepaid letter
(airmail if the addressee is abroad), or by telex or telefax, (a) if to the
Guarantor, to its address specified on the signature pages hereof or such other
address as shall be designated by the Guarantor in a written notice to the other
parties, (b) if to the Agent, to its address as set forth in or determined
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pursuant to the Facility Agreement or such other address as shall be designated
by the Agent in a written notice to the other parties, and (c) if to any Bank,
to its address as set forth in or determined pursuant to the Facility Agreement
or such other address as shall be designated by such Bank in a written notice to
the Guarantor and the Agent. All such notices, requests and communications shall
be effective (i) if delivered for overnight delivery, upon delivery, (ii) if
mailed, two business days after it has been deposited into the mail (seven
business days if delivered through international mail), (iii) if transmitted by
facsimile, when a complete and legible copy is received by the addressee, or
(iv) if sent by telex, at the time of dispatch with confirmed answerback of the
addressee appearing at the beginning and end of the transmission (provided that
if the date of receipt is not a business day in the country of the addressee or
if the time of receipt of any telex or telefax is after the close of business in
the country of the address it shall be deemed to have been received at the
opening of business on the next business day).
SECTION 16 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent or any Bank of any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
SECTION 17 Costs and Expenses; Indemnification; Other
Charges.
(a) Costs and Expenses. The Guarantor shall:
(i) as soon as reasonably practicable in accordance
with the Guarantor's customary procedures for reviewing and processing such
items, and in any event within 30 days following receipt of an invoice therefor,
and to the extent not earlier paid pursuant to the Facility Agreement, pay or
reimburse the Agent for all reasonable costs and expenses incurred by the Agent
in connection with the development, preparation, delivery, administration and
execution of, and any amendment, supplement, waiver or modification to, this
Guaranty and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including fees and expenses of external legal counsel and the allocated cost of
internal legal services and disbursements of internal counsel incurred by the
Agent with respect thereto (subject, however, in the case of legal fees only, to
an aggregate limit agreed between the Agent and the Guarantor in a letter dated
November 30, 1995 for the development, preparation, delivery and execution of
the Loan Documents);
(ii) pay or reimburse each Bank and the Agent on
demand for all reasonable costs and expenses incurred by them in connection with
the enforcement, attempted enforcement, or preservation of any rights or
remedies (including in connection with any "workout" or restructuring regarding
the Subject Obligations) under this Guaranty, including fees and expenses of
external legal counsel and the allocated cost of internal legal services and
disbursements of internal counsel incurred by the Agent and any Bank; and
(iii) as soon as reasonably practicable in accordance
with the Guarantor's customary procedures for reviewing and processing such
items, and in any event within 30 days following receipt of an invoice therefor,
pay or reimburse the Agent on demand for all reasonable appraisal (including the
allocated cost of internal appraisal services), audit, search and filing costs,
fees and expenses, consulting, recording, costs and similar fees and expenses
incurred or sustained by the Agent or any of its Affiliates in connection with
the matters referred to in clauses (i) and (ii) of this subsection 17(a) or
otherwise in connection with this Guaranty.
(b) Indemnification. Whether or not the transactions
contemplated by the Facility Agreement are consummated, the Guarantor shall
indemnify and hold the Agent, the Arranger, each Bank and each of their
respective officers, directors, employees, counsel, agents and attorneys-in-fact
(each, an "Indemnified Person") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses and disbursements (including fees and expenses of
external legal counsel and the allocated cost of internal legal services and
disbursements of internal counsel) of any kind or nature whatsoever which may at
any time (including at any time following repayment of the Advances and the
termination, resignation or replacement of the Agent or replacement of any Bank)
be imposed on, incurred by or asserted against any such Person in any way
relating to or arising out of this Guaranty or any document contemplated by or
referred to herein, or the trans actions contemplated hereby, or any action
taken or omitted by any such Person under or in connection with any of the
foregoing, including with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate pro ceeding) related to or
arising out of this Guaranty or the Advances or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that the Guarantor shall
have no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities to the extent resulting from the gross negligence or
willful misconduct of such Indemnified Person. The agreements in this Section
shall survive payment of all other Subject Obligations.
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(c) Defense. At the election of any Indemnified Person, the
Guarantor shall defend such Indemnified Person using legal counsel satisfactory
to such Indemnified Person in such Person's sole discretion, at the sole cost
and expense of the Guarantor.
(d) Other Charges. The Guarantor agrees to indemnify the Agent
and each of the Banks against and hold each of them harmless from any and all
present and future stamp, transfer, documentary and other such taxes, levies,
fees, assessments and other charges made by any jurisdiction by reason of the
execution, delivery, performance and enforcement of this Guaranty.
(e) Interest. Any amounts payable in Dollars to the Agent or
any Bank under this Section 17 or otherwise under this Guaranty if not paid when
due shall bear interest from the due date until paid in full, at a fluctuating
rate per annum equal to the Prime Commercial Lending Rate of ABN AMRO Bank N.V.
("ABN") as announced from time to time by ABN at its Chicago Office plus 2%
(calculated on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed). Any other amounts payable to the Agent or any Bank under
this Guaranty if not paid when due shall bear interest at the default rate set
forth in the Facility Agreement (but in no event exceeding the maximum rate
permitted by applicable law).
SECTION 18 Payment Currency.
(a) The Guarantor hereby guarantees that the Subject
Obligations will be paid to the Agent and the Banks without set-off or
counterclaim in the currency and at the places and times and in the manner
provided for in the Facility Agreement. The obligation of the Guarantor
hereunder to make payments in any currency (the "Payment Currency") shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Payment Currency or
any other realization in such currency, whether as proceeds of set-off,
security, guarantee, distributions, or otherwise, except to the extent to which
such tender, recovery or realization shall result in the effective receipt by
the Agent and the Banks of the full amount of the Payment Currency to be
payable hereunder. Without limiting the foregoing, the Guarantor (i)
acknowledges that this Guaranty is not an instrument which may be paid in
Dollars pursuant to Section 3107 of the California Uniform Commercial Code, (ii)
agrees that (A) upon the acceleration of the Subject Obligations after an Event
of Default, the Agent, upon the instructions of the Majority Banks, may at any
time and from time to time purchase for the ratable benefit of the Banks, one or
more hedging contracts to fix the Dollar equivalent amount of the Subject
Obligations in the Payment Currency and (B) as a separate and independent
obligation hereunder, the Guarantor shall immediately pay to the Agent and the
Banks all direct and indirect costs incurred by the Agent or the Banks in
obtaining any such hedging contract, and (iii) agrees that (A) any judgment
entered against the Guarantor and in favor of any Bank with respect to the
Subject Obligations shall, if requested by such Bank, be entered in the Payment
Currency pursuant to the Uniform Foreign-Money Claims Act as in effect in the
State of California (California Code of Civil Procedure Section 676 et seq.) and
(B) for the purpose of determining any "spot rate" as defined in California Code
of Civil Procedure Section 676.1(11), the Reference Banks shall be used as the
"bank or other dealer in foreign exchange" referenced in such section. The
Guarantor shall indemnify the Agent and each Bank (as an alternative or
additional cause of action) for the amount (if any) by which such effective
receipt shall fall short of the full amount of the Payment Currency to be
payable hereunder, and such obligation to indemnify shall not be affected by
judgment being obtained for any other sums due under this Guaranty.
(b) Upon a payment with respect to any of the Subject
Obligations becoming due hereunder, unless and until such payment is received by
the Agent and the Banks in the Payment Currency in accordance with subsection
18(a), the Guarantor shall (i) bear all exchange rate risks with respect
thereto, and (ii) pay inter est on such Subject Obligations to the Guarantor and
the Banks on the amounts due, on demand, at the rate of interest then payable by
the Borrower.
SECTION 19 Set-off. In addition to any rights and remedies of the Agent
and the Banks provided by law, if an Event of Default (as defined in the
Facility Agreement) exists or the Advances have been accelerated, the Agent and
each Bank are authorized at any time and from time to time, without prior notice
to the Guarantor, any such notice being waived by the Guarantor to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, the Agent or such Bank (as the case may be)
to or for the credit or the account of the Guarantor against any and all Subject
Obligations, now or hereafter existing, irrespective of whether or not the
Agent or such Bank shall have made demand under this Guaranty which are then due
and payable. The Agent and each Bank agree promptly to notify the Guarantor, and
each Bank agrees promptly to notify the Agent, after any such set-off and
application made by such Bank; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application.
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SECTION 28 Survival. All covenants, agreements, representations and
warranties made in this Guaranty shall survive the execution and delivery of
this Guaranty, and shall continue in full force and effect so long as any of the
Subject Obligations remains unsatisfied. Without limiting the generality of the
foregoing, the obligations of the Guarantor under Section 17 shall survive the
satisfaction of the Subject Obligations.
SECTION 29 Successors and Assigns. The provisions of this Guaranty
shall be binding upon the Guarantor and its successors and assigns and inure to
the benefit of the Agent, each Bank and their respective successors and assigns,
except that the Guarantor may not assign or transfer any of its rights or
obligations under or in connection with this Guaranty without the prior written
consent of the Agent and each Bank.
SECTION 30 Assignments, Participations, Etc. Each Bank may, without
notice to or consent by the Guarantor, sell, assign, transfer or grant
participations in all or any portion of such Bank's rights and obligations
hereunder in connection with any sale, assignment, transfer or grant of a
participation by such Bank under Clause 15 of the Facility Agreement of its
rights and obligations thereunder. The Guarantor agrees that in connection with
any such sale, assignment, transfer or grant by any Bank, such Bank may deliver
to the prospective participant or assignee financial statements and other
relevant information relating to the Guarantor and its Subsidiaries as
contemplated by Clause 15 of the Facility Agreement.
SECTION 31 Governing Law.
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA; PROVIDED THAT THE AGENT AND
THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY SHALL BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA IN AND FOR
THE CITY AND COUNTY OF SAN FRANCISCO OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF CALIFORNIA, OR, AT THE SOLE OPTION OF AGENT OR MAJORITY BANKS, IN
ANY OTHER COURT IN WHICH AGENT OR MAJORITY BANKS SHALL INITIATE LEGAL OR
EQUITABLE PROCEEDINGS AND WHICH HAS JURISDICTION OVER THE SUBJECT MATTER AND
PARTIES IN CONTROVERSY AND BY EXECUTION AND DELIVERY OF THIS GUARANTY, THE
GUARANTOR CONSENTS, AND THE BANKS AND THE AGENT BY THEIR ACCEPTANCE HEREOF EACH
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF
THOSE COURTS. THE GUARANTOR IRREVOCABLY WAIVES, AND THE BANKS AND THE AGENT BY
THEIR ACCEPTANCE HEREOF EACH IRREVOCABLY WAIVES, ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS GUARANTY OR ANY DOCUMENT
RELATED HERETO. THE GUARANTOR WAIVES, AND THE BANKS AND THE AGENT BY THEIR
ACCEPTANCE HEREOF EACH WAIVES, PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.
SECTION 32 Waiver of Jury Trial. THE GUARANTOR HEREBY AGREES TO WAIVE,
AND THE AGENT AND THE BANKS BY THEIR ACCEPTANCE HEREOF HEREBY AGREE TO WAIVE,
THEIR RESPECTIVE RIGHTS TO A TRAIL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
GUARANTOR HEREBY AGREES, AND THE AGENT AND THE BANKS BY THEIR ACCEPTANCE HEREOF
HEREBY AGREE, THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT IN ANY WAY LIMITING THE FOREGOING, THE GUARANTOR
FURTHER AGREES, AND THE AGENT AND THE BANKS BY THEIR ACCEPTANCE HEREOF FURTHER
AGREE, THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM, OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS GUARANTY
OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY. THIS SECTION 24 MAY NOT
BE AMENDED EXCEPT PURSUANT TO SECTION 26 AND BY SPECIFIC REFERENCE TO THIS
SECTION 24.
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SECTION 33 Entire Agreement. This Guaranty embodies the entire
agreement and understanding among the Guarantor, the Banks and the Agent with
respect to the subject matter hereof, and supersedes all prior or
contemporaneous agreements and under standings of such Persons, verbal or
written, relating to the subject matter hereof.
SECTION 34 Amendments and Waivers. This Guaranty may not be amended
except by a writing signed by the Guarantor, the Agent and the Majority Banks,
except that without the consent in writing of all of the Banks (a) the release
or termination of this Guaranty may not be made, (b) the due date of any payment
of principal, interest or other amount payable by the Guarantor hereunder may
not be postponed and the amount thereof may not be reduced, and (c) the currency
in which any amount is payable by the Guarantor may not be changed. No waiver of
any rights of the Agent or the Banks under any provision of this Guaranty or
consent to any departure by the Guarantor therefrom shall be effective unless in
writing and signed by the Agent and the Majority Banks. Any such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 35 Severability. The illegality or unenforceability of any
provision of this Guaranty or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Guaranty or any instrument or agreement required
here under.
SECTION 36 Benefit of Guaranty. This Guaranty is made and entered into
for the sole protection and legal benefit of the Banks and the Agent and their
successors and assigns, and no other Person shall be a direct or indirect
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Guaranty. Neither the Agent nor any Bank, by its
acceptance of this Guaranty, shall have any obligation under this Guaranty to
any Person other than the Guarantor, and such obliga tions shall be limited to
those expressly stated herein.
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SECTION 37 Time. Time is of the essence as to each term or provision of
this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed and delivered in San Francisco, California, by its proper and
duly authorized officers, as of the date first above written.
LSI LOGIC CORPORATION
By _______________________________________________
Title:__________________________________________
Address:
0000 XxXxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Facsimile:________________________________________
Attention:________________________________________
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