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EXHIBIT 10.39A
FIRST AMENDMENT TO AGREEMENT
THIS FIRST AMENDMENT TO AGREEMENT (this "Amendment"), dated December
24, 1996, is made among LSI Logic Japan Semiconductor, Inc., a company
organized and existing under the laws of Japan (the "Borrower"), the financial
institutions listed on the signature pages hereof under the heading "BANKS"
(each a "Bank" and, collectively, the "Banks"), ABN AMRO Bank N.V., Tokyo
Branch as agent for the Banks (in such capacity, the "Agent"), and The
Industrial Bank of Japan, Limited, as co-agent (in such capacity, the
"Co-Agent").
The Borrower, the Banks, the Agent and the Co-Agent are parties to an
Agreement dated as of December 27, 1995 (the "Agreement") under which the Banks
have made available to the Borrower a credit facility of up to Y.25,000,000,000
(twenty-five billion yen). The Borrower has requested that the Banks agree to
certain amendments to the Agreement. The Banks have agreed to such request,
subject to the terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
SECTION 1 Definitions; Interpretation.
(a) Terms Defined in Agreement. All capitalized terms used in
this Amendment and not otherwise defined herein shall have the meanings
assigned to them in the Agreement or, if not defined in the Agreement, in the
Guaranty (as such term is amended as provided below).
(b) Interpretation. The rules of interpretation set forth in
Section 1.5 of the Agreement shall be applicable to this Amendment and are
incorporated herein by this reference.
SECTION 2 Amendments to the Agreement.
(a) Amendments. The Agreement shall be amended as follows,
effective as of the date of satisfaction of the conditions set forth in Section
3 (the "Effective Date"):
(i) Clause 1.2 of the Agreement is hereby amended as follows:
(A) The definition of "Guaranty" is amended and restated
as follows:
"Guaranty" means the Guaranty dated as of December
27, 1995, as amended by that certain
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Amended and Restated Guaranty dated as of December 30, 1996, made by the
Guarantor.
(B) The definition of "Margin" is amended and restated in
its entirety as follows:
"Margin" has the meaning given to it in Clause 5.3;
(C) The definition of "Margin Determination Date" is
amended and restated in its entirety as follows:
"Margin Determination Date" means (i) the "Effective
Date" as defined in the First Amendment to Agreement
dated December 30, 1996, among the Borrower, the
Banks, the Agent and the Co-Agent, (ii) the 55th day
following the end of each of the first three fiscal
quarters of the Guarantor or (iii) the 100th day
following the end of each fiscal year of the
Guarantor, as the case may be;
(D) The definition of "Margin Period" is deleted.
(E) The definition of "Ratio" is amended and restated in
its entirety as follows:
"Ratio" means the EBITDA/Total Debt Ratio;
(ii) Clause 5.3 of the Agreement is hereby amended and
restated in its entirety as follows:
5.3 Margin
(a) The "Margin" shall be, in respect of any portion of
any Contribution other than any Collateralized
Amount, the amount set forth opposite the indicated
Level below the heading "LIBOR/TIBOR Margin" in the
pricing grid set forth on Annex I in accordance with
the parameters set forth on Annex I.
(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 as
of each Margin Determination Date
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and shall submit Margin Certificates (duly completed and signed by a
Responsible Officer of the Guarantor) on or before each Margin Determination
Date.
(iii) The Agreement is hereby also amended by attaching as
Annex I thereto the pricing grid attached hereto as Exhibit A.
(iv) The Agreement is hereby also amended by deleting the
reference to the Debt Rating in Exhibit 1 to the Agreement.
(v) The Agreement is hereby also amended by deleting the form
of "Margin Certificate" attached as Exhibit 5 to the Agreement and substituting
therefor as a new Exhibit 5 the form of Margin Certificate attached hereto as
Exhibit B.
(b) Amendment to Table of Contents. The Table of Contents of the
Agreement shall be amended to the extent necessary to reflect the amendments to
the Agreement made in subsection (a).
(c) References Within Agreement. Each reference in the Agreement
to "this Agreement" and the words "hereof," "herein," "hereunder," or words of
like import, shall mean and be a reference to the Agreement as amended by this
Amendment.
SECTION 3 Conditions of Effectiveness. The effectiveness of Section
2 of this Amendment shall be subject to the satisfaction of each of the
following conditions precedent:
(a) Guaranty. The Agent shall have received the Amended and
Restated Guaranty in the form of Exhibit C hereto, executed by the Guarantor
(the "Amended and Restated Guaranty").
(b) Additional Closing Documents and Actions. The Agent shall
have received the following, in form and substance satisfactory to it:
(i) evidence that all (A) authorizations or approvals of any
Governmental Authority, and (B) approvals or consents of any other Person,
required in connection with the Amended and Restated Guaranty or the execution,
delivery and performance of this Amendment shall have been obtained;
(ii) a certificate of a Responsible Officer of the Borrower, stating
that (A) the representations and warranties contained in Section 4 are true and
correct on and as of the date of such certificate as though made on and as of
the Effective Date, and (B) on and as of the Effective Date, after and giving
effect to the amendment of the Agreement contemplated hereby,
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(1) no Default shall have occurred and be continuing, and (2) there has been no
material adverse change in the financial condition of the Borrower from that
set forth in the financial statements as of December 31, 1995; and
(iii) a certificate of a Responsible Officer of the Guarantor,
stating that (A) the representations and warranties contained in Section 10 of
the Amended and Restated Guaranty are true and correct on and as of the
Effective Date as though made on and as of such date, (B) no "Event of Default"
(as defined in the Guaranty) exists or would result from the execution,
delivery and performance of the Amended and Restated Guaranty, and (C) there
has been no Material Adverse Effect as to the Guarantor and its Subsidiaries
since December 31, 1995.
(c) Corporate Documents. The Agent shall have received the
following, in form and substance satisfactory to it:
(i) a certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Effective Date, certifying (A) copies of the resolutions of
the Board of Directors of the Borrower authorizing the execution, delivery and
performance of this Amendment and (B) the incumbency, authority and signatures
of each officer of the Borrower authorized to execute and deliver this
Amendment, together with the related Power of Attorney empowering each Person
to execute and deliver this Amendment; and
(ii) a certificate of the Secretary or Assistant Secretary of the
Guarantor, dated the Effective Date, certifying (A) copies of the resolutions
of the Board of Directors of the Guarantor authorizing the execution, delivery
and performance of the Amended and Restated Guaranty and (B) the incumbency,
authority and signatures of each officer of the Guarantor authorized to execute
and deliver the Amended and Restated Guaranty.
(d) Legal Opinion. The Agent shall have received the opinion of
the General Counsel of the Guarantor, dated the Effective Date, in
substantially the form of Exhibit D; and
(e) Material Adverse Effect. On and as of the Effective Date,
there shall have occurred no material adverse change in the financial condition
of the Borrower from that set forth in its financial statements dated December
31, 1995, and no Material Adverse Effect (with respect to the Guarantor and its
Subsidiaries) since December 31, 1995.
(f) Representations and Warranties; No Default. On the Effective
Date, after giving effect to the amendment of the Agreement contemplated
hereby:
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(i) the representations and warranties contained in Section 4 shall
be true and correct on and as of the Effective Date as though made on and as of
such date; and
(ii) no Default shall have occurred and be continuing.
(g) Margin Certificate and Compliance Certificate. The Agent
shall have received a completed Margin Certificate and a completed Compliance
Certificate, dated the Effective Date, for the Guarantor's immediately
preceding fiscal quarter.
(h) Additional Documents. The Agent shall have received, in form
and substance satisfactory to it, such additional approvals, opinions,
documents and other information as the Agent or any Bank (through the Agent)
may reasonably request.
SECTION 4 Representations and Warranties. To induce the Banks to
enter into this Amendment, the Borrower hereby confirms and restates, as of the
date hereof, the representations and warranties made by it in Section 9 of the
Agreement and in the other Loan Documents. For the purposes of this Section 4,
(i) each reference in Section 9 of the Agreement to "this Agreement," and the
words "hereof," "herein," "hereunder," or words of like import in such Section,
shall mean and be a reference to the Agreement as amended by this Amendment,
(ii) Section 9.1(f) of the Agreement shall be deemed instead to refer to the
last day of the most recent fiscal quarter and fiscal year for which financial
statements have then been delivered, (iii) any representations and warranties
which relate solely to an earlier date shall not be deemed confirmed and
restated as of the date hereof (provided that such representations and
warranties shall be true, correct and complete as of such earlier date), and
(iv) clause (i) shall take into account any amendments to the Schedules and
other disclosures made in writing by the Borrower to the Agent and the Banks
after the Closing Date and approved by the Agent and the Majority Banks.
SECTION 5 Miscellaneous.
(a) Notice. The Agent shall notify the Borrower, the Guarantor
and the Banks of the occurrence of the Effective Date and promptly thereafter
distribute to the Borrower and the Banks copies of all documents delivered
under Section 3.
(b) Agreement Otherwise Not Affected. Except as expressly amended
pursuant hereto, the Agreement shall remain unchanged and in full force and
effect and is hereby ratified and confirmed in all respects. The Banks' and
the Agent's execution and delivery of, or acceptance of, this Amendment and any
other documents and instruments in connection herewith (collectively,
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the "Amendment Documents") shall not be deemed to create a course of dealing or
otherwise create any express or implied duty by any of them to provide any
other or further amendments, consents or waivers in the future. Nothing in
this Amendment or any other Amendment Document is intended to impair the
priorities, liens or rights of any Bank with respect to any Collateral granted
to such Bank under the Account Pledge executed by the Borrower in favor of such
Bank substantially in the form of Exhibit 3 to the Agreement or other form
satisfactory to such Bank. The Borrower hereby ratifies and confirms the
priority and perfection of all security interests in the Collateral granted to
any Bank prior to the date hereof.
(c) No Reliance. The Borrower hereby acknowledges and confirms to
the Agent and the Banks that the Borrower is executing this Amendment and the
other Amendment Documents on the basis of its own investigation and for its own
reasons without reliance upon any agreement, representation, understanding or
communication by or on behalf of any other Person.
(d) Costs and Expenses. The Borrower agrees to pay to the Agent
on demand the reasonable out-of-pocket costs and expenses of the Agent, and the
reasonable fees and disbursements of counsel to the Agent (including allocated
costs of internal counsel), in connection with the negotiation, preparation,
execution and delivery of this Amendment and any other documents to be
delivered in connection herewith.
(e) Binding Effect. This Amendment shall be binding upon, inure
to the benefit of and be enforceable by the Borrower, the Agent and each Bank
and their respective successors and assigns.
(f) Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF JAPAN.
(g) Complete Agreement; Amendments. This Amendment, together with
the other Amendment Documents and the other Loan Documents, contains the entire
and exclusive agreement of the parties hereto and thereto with reference to the
matters discussed herein and therein. This Amendment supersedes all prior
commitments, drafts, communications, discussion and understandings, oral or
written, with respect thereto. This Amendment may not be modified, amended or
otherwise altered except in accordance with the terms of Clause 16.2 of the
Agreement.
(h) Jurisdiction.
(i) 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
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may arise out of or in connection with the Amendment Documents and, for those
purposes, irrevocably submits to the jurisdiction of that court.
(ii) Each party irrevocably waives any objection which it might now
or hereafter have to the court referred to in clause (i) above 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 the Amendment
Documents and agrees not to claim that court is not a convenient or appropriate
forum.
(iii) The submission to the jurisdiction of the court referred to in
clause (i) above 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.
(iv) Each party consents generally in respect of any legal action or
proceedings arising out of or in connection with the Amendment Documents 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.
(i) English language. This Amendment 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 Amendment
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.
(j) Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment, as of the date first above written.
THE BORROWER
LSI LOGIC JAPAN SEMICONDUCTOR, INC.
By____________________________________
Title:
THE AGENT
ABN AMRO BANK N.V., Tokyo Branch
By____________________________________
Title:
THE BANKS
ABN AMRO BANK N.V., Tokyo Branch,
as Bank
By____________________________________
Name:
Title:
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THE INDUSTRIAL BANK OF JAPAN,
LIMITED, as Co-Agent and a Bank
By____________________________________
Name:
Title:
THE SANWA BANK, LIMITED
By____________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA, Tokyo Branch
By____________________________________
Name:
Title:
BANQUE NATIONALE DE PARIS, Tokyo Branch
By____________________________________
Name:
Title:
BARCLAYS BANK PLC, Tokyo Branch
By____________________________________
Name:
Title:
9.
00
XXXXXX XXXXXXXX XXXXX XXXXXXX XX
XXX XXXX
By____________________________________
Name:
Title:
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD.
By____________________________________
Name:
Title:
THE SUMITOMO BANK, LTD.
By____________________________________
Name:
Title:
THE MITSUBISHI TRUST & BANKING
CORPORATION
By____________________________________
Name:
Title:
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THE DAI-ICHI KANGYO BANK, LIMITED
By____________________________________
Name:
Title:
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Exhibit A
to First Amendment to Agreement
ANNEX I
PRICING GRID
---------------------------------------------------------------------------
Level EBITDA/Total Debt (Basis points per annum)
Ratio ------------------------
LIBOR/TIBOR Margin
------- ------------------------ ------------------------
Level 1 Greater than or equal to 65
to 1.0 to 1.0
------- ------------------------ ------------------------
Level 2 Less than 1.0 to 1.0 75
---------------------------------------------------------------------------
The EBITDA/Total Debt Ratio used to compute the Margin for the
Contributions shall be the EBITDA/Total Debt Ratio set forth in the Margin
Certificate most recently delivered by the Guarantor to the Agent pursuant to
Section 11(l) of the Guaranty; changes in the Margin resulting from a change in
the EBITDA/Total Debt Ratio shall become effective one Business Day after
delivery by the Guarantor to the Agent of a new Margin Certificate pursuant to
Section 11(l). If the Guarantor shall fail to deliver a Margin Certificate on
or prior to a Margin Determination Date as required pursuant to Section 11(l)
(without giving effect to any grace period), the Margin from the first day
after such Margin Determination Date through the day the Guarantor delivers to
the Agent a Margin Certificate shall conclusively equal the highest Margin set
forth above.
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Exhibit B
to First Amendment to Agreement
Exhibit 5
FORM OF MARGIN CERTIFICATE
TO: ABN AMRO Bank N.V., Tokyo Branch, as Agent
(address)
Re: LSI Logic Japan Semiconductor, Inc.
Gentlemen:
This Margin Certificate is made and delivered pursuant to the
Agreement dated December 27, 1995, as amended December 30, 1996 (as further
amended, modified, renewed or extended from time to time, the "Agreement")
among LSI Logic Japan Semiconductor, Inc. (the "Borrower"), certain financial
institutions named therein as Banks, ABN AMRO Bank N.V., Tokyo Branch, as
Agent, and The Industrial Bank of Japan, as Co-Agent and reference is made
thereto for full particulars of the matters described therein. All capitalized
terms used in this Margin Certificate and not otherwise defined herein shall
have the meanings assigned to them in the Agreement, or, if not defined in the
Agreement, in the Guaranty. This Margin Certificate relates to the accounting
period ending __________, 199__. We hereby notify you that the Ratio is
____________ as of the end of the [fiscal quarter] [fiscal year] ending
__________, 199__.
We refer you to our Compliance Certificate dated __________, 199__
delivered pursuant to the Guaranty for further information regarding the
determination of the Ratio.
IN WITNESS WHEREOF, the undersigned officer has signed this Margin
Certificate on behalf of the Guarantor this ____ day of ______________, 199__.
______________________________________
Name:
Title:
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Exhibit C
to First Amendment to Agreement
FORM OF AMENDED AND RESTATED GUARANTY
================================================================================
LSI LOGIC CORPORATION
AMENDED AND RESTATED GUARANTY
DATED AS OF DECEMBER 30, 1996
================================================================================
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TABLE OF CONTENTS
SECTION Page
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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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) Financial Condition of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Subordination to Payment of Subject Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) No Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(c) Subordination of Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(d) Subordination upon any Distribution of Assets of the Borrower . . . . . . . . . . . . . . . . . . 22
(e) Authorization to Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8 Continuing Guaranty; Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(a) Continuing Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(b) Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 9 Payments; Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(a) Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(b) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 10 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(a) Organization and Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(c) Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(d) Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(e) No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(f) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(g) Regulated Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(h) Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(i) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(j) Compliance with Consents and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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TABLE OF CONTENTS
(continued)
SECTION Page
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(k) Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(l) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(m) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(n) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(o) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(p) Labor Disputes, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(q) Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(r) Independent Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(s) Name of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(t) Significant Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(u) Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 11 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(b) Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(c) Preservation of Corporate Existence, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(d) Payment of Taxes, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(e) Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(f) Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(g) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(h) Payment of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(i) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(j) Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(k) Inspection of Property and Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(l) Margin Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(m) Further Assurances and Additional Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 12 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(a) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(b) Change in Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(c) Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(d) Loans and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(e) Restrictions on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(f) Transactions with Related Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(g) Accounting Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(h) Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 13 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(a) Senior Debt to Total Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(b) Quick Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(c) Minimum Consolidated Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(d) Debt Service Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(e) Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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TABLE OF CONTENTS
(continued)
SECTION Page
------- ----
SECTION 14 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(a) Representation or Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(b) Specific Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(c) Other Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(d) Default Under Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(e) Insolvency; Voluntary Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(f) Involuntary Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(g) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(h) Process Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(i) Seizure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(j) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(k) Dissolution, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(l) Ownership of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(m) Change in Ownership or Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(n) Repudiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(o) Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 15 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 16 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 17 Costs and Expenses; Indemnification; Other Charges . . . . . . . . . . . . . . . . . . . . . . . . 43
(a) Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(b) Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(c) Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(d) Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(e) Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 18 Payment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 19 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 20 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 21 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 22 Assignments, Participations, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 23 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 24 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 25 Effective Date; Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 26 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 27 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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TABLE OF CONTENTS
(continued)
SECTION Page
------- ----
SECTION 28 Benefit of Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 29 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 30 Guarantor Acknowledgment and Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
EXHIBITS
Exhibit A Compliance Certificate
SCHEDULES
Schedule 1 Certain Permitted Liens
(Section 1, "Permitted Liens")
Schedule 2 Litigation (Section 10(i))
Schedule 3 Certain Environmental Matters (Section 10(k))
Schedule 4 Significant Subsidiaries
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AMENDED AND RESTATED GUARANTY
THIS AMENDED AND RESTATED GUARANTY (this "Guaranty"), dated as
of December 30, 1996, 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").
WHEREAS, 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 December 27, 1995 (as amended, modified, renewed
or extended from time to time, the "Facility Agreement");
WHEREAS, the Guarantor has previously delivered a certain
Guaranty (the "Prior Guaranty") dated as of December 27, 1995 in favor of the
Banks from time to time party to the Facility Agreement and the Agent
guaranteeing 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 therein;
WHEREAS, the Borrower and the Guarantor have requested that
the Banks and the Agent agree to amend and restate the Prior Guaranty in order
to, among other things, amend the financial covenants contained therein; and
WHEREAS, the Banks and the Agent are willing to amend and
restate the Prior Guaranty as provided in this Guaranty.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the Guarantor hereby represents,
warrants, covenants and agrees as follows:
SECTION 1 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,
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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 duplication) Guaranty Obligations
with respect to that portion of the underlying obligations which come
due within one year of such date of determination.
"Consolidated EBITDA" means, for any period,
Consolidated Net Income plus Consolidated Interest Expense plus income
tax expense plus depreciation expense, amortization expense and other
non-cash expenses or charges relating to Permitted Acquisitions which
were deducted in determining Consolidated Net Income, of the Guarantor
and
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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.
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"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 Debt" means, as of any date of
determination, all Indebtedness 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.
"Convertible Subordinated Notes" has the meaning
provided therefor in the definition of Subordinated Debt.
"Dollars" and the sign "$" each means lawful money of
the United States.
"EBITDA/Total Debt Ratio" means, as of the last day
of any fiscal quarter of Guarantor, the ratio of (i) Consolidated
EBITDA for such fiscal quarter then ended to (ii) Consolidated Total
Debt as of such date.
"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.
"ERISA" means the Employee Retirement Income Security
Act of 1974, including (unless the context
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23
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.
"First Amendment" has the meaning provided therefor
in Section 30.
"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
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24
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.
"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:
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(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.
"Indemnified Person" has the meaning given to such
term in Section 17(b).
"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.
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26
"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 foregoing 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 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.
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"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" means any Acquisition of a
Person by the Guarantor or any Subsidiary for which (i) the sole
consideration paid by the Guarantor or any Subsidiary, as the case may
be, consists of common stock, or (ii) the total cash consideration
paid by the Guarantor or any Subsidiary, as the case may be, does not
exceed, in the aggregate with all other Acquisitions, $500,000,000
during the period from December 20, 1996 through the Final Maturity
Date.
"Permitted Investments" means any investments
selected by the Guarantor in accordance with its Corporate Cash
Investment Policy as adopted by the Guarantor on February 13, 1995 (as
the same may be amended from time to time with the approval of the
Agent); 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 (A) any substitute or renewal Lien is limited
to the property encumbered by the existing Lien, and (B) 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;
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(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;
(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
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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 within the general
parameters customary in the industry and incurred in the ordinary
course of business in connection with Rate Contracts or portfolio
investments maintained with financial intermediaries.
"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.
"Prior Guaranty" has the meaning provided therefor in
the Recitals hereof.
"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.
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"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.
"Significant Subsidiary" means, at any time, any
Subsidiary having at such time total assets, as of the last day of the
preceding fiscal quarter, having a net book value in excess of
$10,000,000 (exclusive of intercompany assets and liabilities), based
upon the Guarantor's most recent annual or quarterly financial
statements delivered to the Agent under Section 11(a).
"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
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
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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.
"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,
determinations 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
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after the date hereof would otherwise affect the calculation of any covenant
set forth in Section 13, 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.
(x) References to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Guarantor.
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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:
(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,
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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
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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.
SECTION 4 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;
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(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 without 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
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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;
(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 Sections 1432,
2809, 2810, 2815, 2819, 2839, 2845, 2848, 2849, 2850, 2899 and 3433 and
California Code of Civil Procedure Sections 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,
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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 6 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 7 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
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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 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
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(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 8 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 9 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
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(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;
(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
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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 10 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.
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(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" for purposes of, and 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 Convertible Subordinated Notes.
(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 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
Significant Subsidiary has 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 Liens permitted under Section
12(a).
(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
reasonably likely to result in a Material Adverse Effect.
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(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
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Guarantor nor any entity under common control with the Guarantor in the
preceding sentence has ever contributed to any Multiemployer Plan.
(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, 1995 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, 1996 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, 1996 financial statements, to normal year-end adjustments and the
absence of notes. Since December 31, 1995, there has been no Material Adverse
Effect.
(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,
1996.
(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.
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(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) Significant Subsidiaries. The name and ownership of
each Significant Subsidiary of the Guarantor on the date of this Guaranty is as
set forth in Schedule 4. All of the outstanding capital stock of, or other
interest in, each such Significant Subsidiary has been validly issued, and is
fully paid and nonassessable.
(u) 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
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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 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;
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(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 ERISA Event,
together with a copy of any notice of such ERISA 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 45 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 change in accounting policies or financial
reporting practices by the Guarantor or the Borrower or any Significant
Subsidiary that is expected to affect
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(or has affected) materially under U.S. GAAP the consolidated financial
condition of the Guarantor and its Subsidiaries;
(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 Person or
Subsidiary not identified on Schedule 4 that becomes a Significant Subsidiary
after the date of this Guaranty;
(xi) 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
(xii) such other information respecting the
operations, properties, business or condition (financial or otherwise) of the
Guarantor or its Significant 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 connection with transactions permitted
by Section 12, and 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;
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(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 (other than a Permitted 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. Except as otherwise
permitted under Section 12(c) or (e), 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 Indebtedness. The Guarantor shall, and
shall cause each Subsidiary to, pay and discharge as the same shall become due
and payable, all obligations of the Borrower
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under the Facility Agreement and all other Indebtedness, 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 subsection (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).
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(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. 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, determined as of the end of the
next preceding fiscal quarter (or fiscal year, as the case may be).
(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;
(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
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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;
(iv) sales or other dispositions of assets outside
the ordinary course of business which do not constitute Substantial Assets; and
(v) sales or other dispositions of Permitted
Investments.
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, enter into any Acquisition or
otherwise extend any credit to, guarantee the obligations of or make any
additional investments in or acquire any interest 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, and guarantees of the obligations of, Subsidiaries;
(iv) Permitted Acquisitions;
(v) employee loans and guarantees in accordance with
the Borrower's usual and customary practices with respect thereto; or
(vi) additional investments not exceeding, in the
aggregate with all such investments and all Acquisitions, $500,000,000 during
the period from December 20, 1996 through the Final Maturity Date;
provided that in the case of an Acquisition or an investment referred to in
clause (vi) above, (A) no such Acquisition or investment shall be made while
there exists a Default or if a Default or Material Adverse Effect would occur
as a result thereof, and (B) the acquired or other Person in which any such
Acquisition or investment is made shall be in the electronics
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business or other business incidental or reasonably related thereto.
(e) Restrictions on Fundamental Changes. The Guarantor
will not, and will not permit any of its Subsidiaries to, merge with or
consolidate into, or acquire all or substantially all of the assets of, any
Person, or sell, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets, except that:
(i) any of the Guarantor's Subsidiaries may merge
with, consolidate into or transfer all or substantially all of its assets to
another of the Guarantor's Subsidiaries or to the Guarantor and in connection
therewith such Subsidiary may be liquidated or dissolved, provided that (A) if
the transaction involves the Guarantor, the Guarantor shall be the surviving
Person, and (B) if any transaction shall be between a non-wholly owned
Subsidiary and a wholly owned Subsidiary, the wholly owned Subsidiary shall be
the continuing or surviving Person, and provided further that no Material
Adverse Effect or Default shall result therefrom;
(ii) the Guarantor or any of its Subsidiaries may
sell or dispose of assets in accordance with the provisions of subsection (c);
(iii) the Guarantor or any of its Subsidiaries may
make any investment permitted by subsection (d); and
(iv) the Guarantor may merge with or consolidate
into any other Person pursuant to an Acquisition permitted by subsection (d),
provided that (A) the Guarantor is the surviving Person, (B) no such merger or
consolidation shall be made while there exists a Default or if a Default or
Material Adverse Effect would occur as a result thereof, and (C) the Guarantor
shall have complied with the notice and other requirements of subsection (d)
with respect to any Acquisition.
(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
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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;
(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 13 Financial Covenants. So long as any 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;
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(b) 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;
(c) 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 (i)
$997,000,000 plus (ii) 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 (iii) 80%
of positive Consolidated Net Income, if any, for each fiscal quarter elapsed
after September 30, 1995, minus (iv) 80% of total goodwill generated by the
Guarantor's Permitted Acquisitions from September 30, 1996, if any, and minus
(v) 100% of restructuring and acquisition charges related to the Guarantor's
Permitted Acquisitions from September 30, 1996 (provided that any such
restructuring or acquisition charges are expensed in the same fiscal quarter
during which the applicable Permitted Acquisition is completed);
(d) Debt Service Coverage Ratio. The Guarantor will
maintain a ratio of (i) the sum of Consolidated EBITDA plus Consolidated Rental
Expense to (ii) 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, calculated as of the end of such period; and
(e) Subordinated Debt. The Guarantor will not permit
Subordinated Debt of the Guarantor and its consolidated Subsidiaries to exceed
(i) $500,000,000 at any time during the Guarantor's 1996 fiscal year or (ii)
$750,000,000 at any time thereafter; and the Guarantor will not, and will 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 Events 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
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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) (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 performed 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
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(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; 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
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(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(e), (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 herein and 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 pursuant to the Facility Agreement or such other
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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. The rights and remedies hereunder are
cumulative and not exclusive of any rights, remedies, powers and privileges
that may otherwise be available to the Agent or any Bank.
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
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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 transactions
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 proceeding) 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
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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 interest 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.
SECTION 20 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
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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 21 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 22 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 23 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
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SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY CALIFORNIA LAW.
SECTION 24 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.
SECTION 25 Effective Date; Entire Agreement. This Guaranty shall be
effective on and as of the "Effective Date" defined in the First Amendment.
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 understandings of
such Persons, verbal or written, relating to the subject matter hereof, and
amends and restates in its entirety the Prior Guaranty.
SECTION 26 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.
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SECTION 27 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
hereunder.
SECTION 28 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 other than an Indemnified
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
obligations shall be limited to those expressly stated herein.
SECTION 29 Time. Time is of the essence as to each term or provision
of this Guaranty.
SECTION 30 Guarantor Acknowledgment and Consent. The Guarantor
hereby (a) acknowledges and consents to the execution, delivery and performance
by the Borrower of that certain First Amendment to Facility Agreement (the
"First Amendment") dated as of December 24, 1996 which amends the Facility
Agreement as set forth in such First Amendment, a copy of which has been
previously delivered to and reviewed by the Guarantor; (b) reaffirms and agrees
that this Guaranty and all other documents and agreements executed and
delivered by the Guarantor previously (other than the Prior Guaranty) or
concurrently herewith to the Agent and the Banks in connection with the
Facility Agreement are in full force and effect, without defense, offset or
counterclaim; and (c) reaffirms and agrees that all of the provisions of this
Guaranty are applicable to, and enforceable by the Agent and all Banks party to
the Facility Agreement against, the Guarantor.
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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: (000) 000-0000
Attention: Xxxx X. Xxxx
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EXHIBIT A
to the Amended and Restated Guaranty
FORM OF COMPLIANCE CERTIFICATE
TO: ABN AMRO Bank N.V., Tokyo Branch, as Agent
(address)
Re: LSI Logic Corporation
Ladies and Gentlemen:
This Compliance Certificate is made and delivered pursuant to
the Amended and Restated Guaranty dated as of December 30, 1996 (as amended,
modified, renewed or extended from time to time, the "Guaranty") made by LSI
Logic Corporation, a Delaware corporation (the "Guarantor"), in favor of the
Banks referred to therein and ABN AMRO Bank N.V., Tokyo Branch, as Agent, and
reference is made thereto for full particulars of the matters described
therein. All capitalized terms used in this Compliance Certificate and not
otherwise defined herein shall have the meanings assigned to them in the
Guaranty. This Compliance Certificate relates to the accounting period ending
__________, 199__.
I am the _______________________ of the Guarantor. I have
reviewed the terms of the Guaranty and I have made, or caused to be made under
my supervision, a detailed review of the transactions and conditions of the
Guarantor and its Subsidiaries during such accounting period. I hereby certify
that the information set forth on Schedule 1 hereto (and on any additional
schedules hereto setting forth further supporting detail) is true, accurate and
complete as of the end of such accounting period.
I hereby further certify that (i) as of the date hereof, no
Event of Default has occurred and is continuing, and (ii) on and as of the date
hereof, there has occurred no Material Adverse Effect since December 31, 1995,
except, in each case, as may be set forth in a separate attachment hereto
describing in detail the nature of each condition or event constituting an
exception to the foregoing statements, the period during which it has existed
and the action which the Guarantor is taking or proposes to take with respect
to each such condition or event.
IN WITNESS WHEREOF, the undersigned officer has signed this
Compliance Certificate this ____ day of ______________, 199__.
______________________________________
Name:
Title:
A-1.
70
Exhibit D
to First Amendment to Agreement
FORM OF LEGAL OPINION
December __, 1996
To each of the Banks party to the Amendment
Agreement referred to below, and to
ABN AMRO Bank N.V., Tokyo Branch, as Agent
Ladies and Gentlemen:
I am General Counsel of LSI Logic Corporation, a Delaware corporation
(the "Guarantor"), and I am giving my opinion in connection with the execution
and delivery of the First Amendment to Agreement, dated December 24, 1996 (the
"Amendment Agreement"), amending the Agreement dated December 27, 1995 (the
"Agreement") among LSI Logic Japan Semiconductor, Inc. (the "Borrower"),
certain financial institutions named therein as Banks (the "Banks"), ABN AMRO
Bank N.V., Tokyo Branch, as Agent (the "Agent"), and The Industrial Bank of
Japan, Limited, as Co-Agent, and the related Amended and Restated Guaranty,
dated as of December 30, 1996 (the "Guaranty") of LSI Logic Corporation, Inc.
(the "Guarantor") in favor of the Agent and the Banks.
This opinion is provided to the Agent and the Banks as required
pursuant to Section 3(d) of the Amendment Agreement. Capitalized terms not
otherwise defined herein have the respective meanings set forth in the
Amendment Agreement and the Guaranty.
In connection with this opinion letter, I have examined an executed
copies of the Guaranty; certificates of public officials from the States of
California and Delaware; the certificate of incorporation and by-laws of the
Guarantor, as amended to date; records of proceedings of the Board of Directors
of the Guarantor by which resolutions were adopted relating to matters covered
by this opinion; and such certificates of officers of the Guarantor as to
certain factual matters as I have deemed necessary or appropriate.
In addition, I have made such other investigations as I have deemed
necessary to enable me to express the opinions hereinafter set forth. In the
course of this examination I have assumed the genuineness of all signatures of
persons signing the Loan Documents on behalf of parties thereto other than the
Guarantor, the authenticity of all documents submitted to me as originals and
the conformity to authentic original documents of all documents submitted to me
as certified, conformed or photostatic copies.
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Based upon the foregoing, and further subject to the assumptions,
qualifications and exceptions set forth below, I hereby advise you that in my
opinion:
(1) The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with the
corporate power and authority to own and operate (or lease, as the case may be)
its properties and to carry on its business as it is now conducted. The
Guarantor is qualified as a foreign corporation and in good standing in the
State of California.
(2) The Guarantor has the corporate power and authority to enter
into and perform the Guaranty, and has taken all necessary corporate action to
authorize the execution, delivery and performance of the Guaranty.
(3) 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, or enforcement against, the Guarantor of the Guaranty.
(4) The Guaranty have been duly executed and delivered by the
Guarantor and constitutes the legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms.
(5) The execution, delivery and performance by the Guarantor of
the Guaranty will not (i) violate or be in conflict with any provision of the
certificate of incorporation, or by-laws of the Guarantor, (ii) violate or be
in conflict with any law or regulation having applicability to the Guarantor,
(iii) violate or contravene any judgment, decree, injunction, writ or order of
any court, or any arbitrator or other Governmental Authority, having
jurisdiction over the Guarantor or the Guarantor's properties or by which the
Guarantor may be bound, or (iv) violate or conflict with, or constitute a
default under or result in the termination of, or accelerate the performance
required by, any indenture, any loan or credit agreement, or any other
agreement for borrowed money or any other material agreement, lease or
instrument to which the Guarantor is a party or by which it or the Guarantor's
properties may be bound or affected except as contemplated under the Guaranty.
(6) Except as otherwise disclosed on Schedule 2 to the Guaranty,
no litigation or other proceedings are pending or threatened against the
Guarantor or its properties before any court, arbitrator or governmental agency
or authority with respect to the Guaranty or which, if determined adversely to
the Guarantor, would be likely to have a Material Adverse Effect.
The opinion set forth in paragraph 4 above is subject to the
qualification that the enforceability of the Guaranty may
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be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and by
general equity principles.
I express no opinion herein concerning any law other than the law of
the State of California, the General Corporation Law of the State of Delaware
and the federal law of the United States.
This letter has been furnished to you at the request of the Guarantor
pursuant to Section 3(d) of the Amendment Agreement for your use in connection
with the Amendment Agreement and the Guaranty, and may not be relied upon by
you or any other person for any other purpose without my consent; provided the
Agent and each Bank may deliver a copy to its legal counsel in connection with
the Amendment Agreement and the Guaranty, to any prospective assignee or
participant of any Bank and to any successor Agent, and such legal counsel, any
such assignee or participant and any successor Agent shall be entitled to rely
hereon.
Very truly yours,
3.
