Intercompany Loan Agreement
THIS INTERCOMPANY LOAN AGREEMENT (the "Agreement") is made
as of this 10th day of April, 1997, by and between Hyundai
Electronics America, a California corporation ("HEA"), and Maxtor
Corporation, a Delaware corporation ("Maxtor").
RECITALS
1. Maxtor desires to borrow from HEA from time to time
such amount or amounts, not to exceed an aggregate outstanding
principal amount of $150,000,000 at any one time, as it may
require to meet its day-to-day operational expenses and working
capital needs.
2. HEA is willing to lend to Maxtor from time to time such
amounts or amounts, subject to certain terms and conditions.
NOW, THEREFORE, HEA and Maxtor hereby agrees as
follows:
Section 1. The Loan.
1.1 Amount and Term of Loan. HEA agrees upon the terms and
conditions of this Agreement, to loan to Maxtor, and Maxtor
agrees to borrow from HEA, such amount or amounts as Maxtor may
from time to time require to meet its operational expenses and
working capital needs, which amount or amounts shall not exceed
at any one time an aggregate outstanding principal amount of
$150,000,000 (the "Loan"). Each disbursement made to Maxtor
under the Loan shall be in the minimum amount of $500,000 and
shall be in multiples of $10,000.
1.2 The Note. The Loan will be evidenced by a Promissory
Note, in substantially the form attached hereto as Exhibit A.
duly executed and delivered by Maxtor to HEA (the "Note"). Each
disbursement made to Maxtor under the Loan will be set forth on
Attachment 1 to the Note with appropriate insertions therein, for
the principal amount so loaned. The Note will be payable in
accordance with its terms, which are hereby incorporated by
reference in this Agreement, and shall bear interest on the
aggregate unpaid principal amount thereunder at a rate per annum
of ten (10) basis points above HEA's average monthly cost of
borrowing (as determined on the date of the applicable
disbursement). Any principal amount which is not paid when due
(whether as stated, by acceleration or otherwise) shall bear
additional interest from and including the date due until the
date of payment in full thereof at a rate per annum equal to 2%.
Interest shall be payable quarterly on the last day of the last
month of each calendar quarter and upon payment in full or any
prepayment of the unpaid principal amount thereof.
1.3 Interest and Repayment. Maxtor shall repay and shall
pay interest on the entire outstanding principal balance of the
Loan in accordance with the Note.
1.4 Prepayment. Maxtor may at any time and from time to
time prepay the Loan in whole or in part without penalty;
provided that any such prepayment shall be in the minimum amount
of $500,000.
Section 2. Disbursements.
2.1 General. HEA agrees to make disbursements of the Loan
at such times and in such amounts as Maxtor may from time to time
request, provided that the conditions set forth in Section 2.2
below have been satisfied.
2.2 Conditions to Disbursement. The obligation of HEA to
disburse any portion of the Loan shall be subject to the
following conditions:
(a) Maxtor shall have duly executed the Note and appropriate
insertions evidencing the amount of the disbursement shall have
been made on Attachment 1 to the Note.
(b) No Event of Default (defined in Section 5.1) shall have
occurred and be continuing and no event which with notice or
lapse of time or both would become an Event of Default, shall
have occurred and be continuing.
(c) The representations and warranties of Maxtor contained
in Section 4.1 shall be true on and as of the date of the
disbursement.
(d) No material adverse change shall have occurred and be
continuing with respect to the assets, operations, financial
condition or prospects of Maxtor.
(e) The Proposed disbursement would not cause the
outstanding principal balance of the Loan to exceed $150,000,000.
Section 3. Term of Agreement.
This Agreement shall be in full force and effect from the
date set forth above and shall terminate at the end of one (1)
year thereafter, unless extended for a longer period upon mutual
written agreement of the parties in accordance with Section 6.5
hereof.
Section 4. Representations and Warranties.
4.1 Representations and Warranties of Maxtor. Maxtor hereby
represents and warrants to HEA as follows:
(a) On and as of the date of this Agreement, Maxtor is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite
power and authority to own and operate its properties and assets
and to carry on its business as now conducted and as presently
proposed to be conducted and to execute and deliver, and to
perform its obligations under, this Agreement and the Note.
(b) This Agreement and the Note, and all actions
contemplated to be taken thereunder, have been duly authorized by
all necessary corporate and other actions required on the part of
Maxtor.
(c) The execution and delivery of this Agreement and the
Note, and the taking of any and all actions contemplated thereby,
will not constitute a breach or default under, or be in conflict
with, any contractual or other obligation by which Maxtor is
bound.
4.2 Representation and Warranties of HEA. HEA hereby
represents and warrants to Maxtor as follows:
(a) On and as of the date of this Agreement, HEA is a
corporation duly organized, validly existing and in good standing
under the laws of the State of California and has all requisite
power and authority to own and operate its properties and assets
and to carry on its business as now conducted and as presently
proposed to be conducted and to execute and deliver, and to
perform its obligations under, this Agreement.
(b) This Agreement and all actions contemplated to taken
thereunder, have been duly authorized by all necessary corporate
and other actions required on the part of HEA.
(c) The execution and delivery of this Agreement and the
taking of any and all actions contemplated thereby, will not
constitute breach or default under, or be in conflict with, any
contractual or other obligation by which HEA is bound.
Section 5. Defaults and Remedies
5.1 Events of Default. Any of the following events shall
constitute an "Event of Default".
(a) Failure of Maxtor to pay when due any principal,
interest or other amounts owing pursuant to this Agreement or the
Note;
(b) Failure of Maxtor to pay when due (beyond any period of
grace allowed with respect thereto) any principal, interest or
other amounts owing with respect to any other borrowed money
obligation, or if the holder of such other obligation declares,
or may declare, such obligation due prior to the stated maturity
thereof;
(c) If any representation or warranty made by Maxtor in any
agreement, document or instrument delivered in connection with
this Agreement or the indebtedness evidenced hereby proves to be
false in any material respect when made;
(d) If Maxtor violates any other covenant, agreement or
condition contained in any agreement, document or instrument
executed in connection with the Loan, including but not limited
to, the Note, and such violation shall continue for a period of
15 days after notice of such violation is given by HEA to Maxtor;
provided, however, that if any such violation by its nature
cannot reasonably be cured within such 15-day period, no Event of
Default shall be deemed to have occurred or exist if and so long
as Maxtor shall commence good faith efforts to effect such cure
within such 15-day period and shall diligently and continuously
prosecute the same to completion;
(e) If Maxtor admits in writing its inability to pay its
debts as they mature, applies to any tribunal for the appointment
of a trustee or receiver of any substantial part of its assets,
or commences any proceedings with respect to itself under any
bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution, liquidation or other similar law of any
jurisdiction;
(f) If any such application or any such proceedings
described in (e) above are filed or commenced against Maxtor and
Maxtor indicates its approval, consent or acquiescence, or an
order is entered adjudicating Maxtor bankrupt or insolvent, or
approving the application or petition in any such proceedings,
and such order remains in effect for 30 days;
(g) If Maxtor executes and delivers a definitive agreement
with respect to the sale of all or substantially all of its
assets, the merger of Maxtor with another entity, whether or not
Maxtor is the surviving entity, or the reorganization of Maxtor
whereby over 50% of the equity ownership of Maxtor is exchanged
for cash, securities of another entity or other property;
(h) If HEA owns beneficially or of record less than 50% of
the voting power of Maxtor or
(I) If the Board of Director of Maxtor approves the
dissolution or winding up of Maxtor
5.2 Remedies. Upon the occurrence and during the
continuance of an Event of Default, HEA at its option and with
notice as provided in Section 6.1 below to Maxtor may do any one
or more of the following:
(a) Declare all indebtedness arising hereunder immediately
due and payable and credit any sums received thereafter in such
manner as it elects upon such indebtedness. Such application
shall not operate to waive or cure any default existing under
this Agreement or to invalidate any notice of default or any
action pursuant to such notice and shall not prejudice any rights
of HEA under the Note or any other agreement or document
contemplated in or by this Agreement. Upon such declaration HEA
shall be released from all obligations to Maxtor to advance
additional amounts under this Agreement.
(b) Withhold any one or more disbursements of the Loan
proceeds until the default is cured; and/or
(c) Exercise any or all rights and remedies granted
pursuant to this Agreement, the Note and/or any other agreement
or document contemplated in or by this Agreement or otherwise
permitted by law.
Section 6. Miscellaneous.
6.1 Notices. All notices and communications required or
permitted under this Agreement must be in writing and must be
either hand-delivered, telecopied, sent by registered or
certified first-class mail, postage pre-paid, or sent by
nationally recognized express courier service. Such notices and
communications will be deemed to have been given upon receipt, if
hand-delivered or sent by telecopy., five (5) days after mailing
if sent by mail, and one (1) day after dispatch if sent by
express courier, to the address of the receiving party set forth
at the signature page of this Agreement or at such other address
as may be specified by a notice given in accordance with Section
6.1.
6.2 Governing Law; Severability. This Agreement will be
governed by and construed in accordance with the laws of the
State of California excluding those laws pertaining to conflicts
of laws. If any provision of this Agreement is determined by a
court of competent jurisdiction to be unlawful or unenforceable
in any jurisdiction, then such provision will be enforced to the
maximum extent permissible under applicable law, and the
remaining provisions of this Agreement will remain in full force
and effect.
6.3 Successors and Assigns. This Agreement and the Note
shall be binding upon and shall inure to the benefit of Maxtor
and HEA and their respective successors and assigns, except that
neither party will have the right to assign its rights hereunder
or any interest herein without the prior written consent of the
other party.
6.4 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so delivered will be
deemed an original, and all of which will constitute but one and
the same instrument.
6.5 Amendment; Waiver. This Agreement and the Note may
not be amended or modified except by a writing executed by Maxtor
and HEA. No right under this Agreement may be waived except by a
writing signed by the party waiving such right, and no waiver of
one breach of this Agreement will constitute a waiver of
subsequent breaches of the same or of a different nature.
6.6 Entire Agreement. This Agreement and the exhibits
hereto (each of which are incorporated herein) constitute the
entire agreement and understanding of the parties regarding the
subject matter hereof and supersede all prior and contemporaneous
agreements or understandings, whether written or oral, with
respect thereto.
IN WITNESS WHEREOF, Maxtor and HEA have each caused this
Agreement to be executed and delivered on the date first set for
above.
HYUNDAI ELECTRONICS AMERICA
MAXTOR CORPORATION
By:/s/ Xxxxx Xxxxxxx
Its: Sr. VP Finance
Address: 0000 X. Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No:(000) 000-0000
By:/s/ Xxxxx Xxxxx
Its: Treasurer
Address: 000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Telecopier No: (000) 000-0000
Exhibit A
PROMISSORY NOTE
$150,000,000 April 10, 1997
For value received, Maxtor Corporation , a Delaware
corporation (the "Company"), hereby promises to pay to the order
of Hyundai Electronics America, a California corporation (the
"Holder"), such aggregate amount as may be advanced hereunder (as
reflected on Attachment 1) up to the principal sum of Xxx Xxxxxxx
Xxxxx Xxxxxxx Xxxxxx Xxxxxx Dollars (US $150,000,000), together
with interest as set forth in Section 2 below, in immediately
available funds at the address of the Holder, or at such other
office within the United States as the Holder may designate, from
time to time, for notices to be delivered to the Holder pursuant
to Section 6.1 below.
This Note shall be subject in all respects to the terms of
the Loan Agreement referred to below and to the following terms
and conditions:
1. Term. Subject to Section 3 below, the unpaid principal
amount outstanding, as reflected on Attachment 1, together with
accrued interest on this Note, shall be due and payable on April
10, 1998, or such later date as is the termination date of the
Loan Agreement (as defined below).
2. Interest. The Company promises to pay interest on the
unpaid principal amount outstanding from time to time hereunder
until such principal amount is paid in full, at a rate per annum
equal to ten (10) basis points above HEA's average monthly cost
of borrowing (as determined on the date of the applicable
disbursement). Interest under this Note shall be calculated on
the basis of the actual number of days elapsed over three hundred
and sixty (360) days. All interest accrued under this Note shall
be payable on a calendar quarter basis on the last day of the
last month of each calendar quarter and upon payment in full or
any prepayment of the principal amount outstanding hereunder.
3. Right to Prepay. Upon payment of accrued interest on
this Note, the Company may prepay this Note, in whole or in part,
from time to time, without penalty; provided that any such
prepayment shall be in the minimum amount of $500,000.
4. Loan Agreement. This Note is the Note referred to in,
and is entitled to the benefits of, that certain Intercompany
Loan Agreement dated April 10, 1997 between the Company and the
Holder (the "Loan Agreement"), the terms of which are hereby
incorporated by reference into this Note. If principal or
interest is not paid when due or should any other Events of
Default as specified in the Loan Agreement occur, and all
remedies available to the Holder under the Loan Agreement shall
come fully into force.
5. Waiver of Rights. The company hereby waives grace
(except as expressly provided herein), demand, presentment for
payment, notice of demand, notice of non-payment or dishonor,
protest and notice of protest, and shall pay all costs of
collection when incurred, including, without limitation,
reasonable attorney's costs and other expenses. The right to
plead any and all statutes of limitation as a defense to any
demands hereunder is hereby waived to the fullest extent
permitted by law.
6. Miscellaneous.
6.1 Notices. All notices and communications required or
permitted under this Note must be in writing and must be either
hand-delivered, telecopied , sent by registered or certified
first-class mail, postage pre-paid, or sent by nationally
recognized express courier service. Such notices and
communications will be deemed to be given upon receipt, if hand-
delivered or sent by telecopy, five (5) days after mailing if
sent by mail, and one (1) day after dispatch if sent by express
courier, to the address of the receiving party in accordance with
Section 6.1 of the Loan Agreement.
6.2 Attorney's Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Note, the
prevailing party shall be entitled to reasonable attorney's fees
and costs, in addition to any other relief to which such party
may be entitled.
6.3 Heading. The headings of the sections contained in
this Note are inserted for convenience only and do not form a
part, or affect the meaning, construction or scope, hereof.
6.4 Absolute Obligation. No provisions of this Note shall
alter or impair the obligation of the Company, which obligation
is absolute and unconditional, to pay the amount of this Note at
the time, place and in the manner herein described.
6.5 Maximum Rate of Interest. Notwithstanding any other
provision of this Note or any document or instrument executed or
delivered in connection with this Note, interest, fees and the
like shall not exceed the maximum rate permitted by law.
6.6 Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of
California, excluding these laws pertaining to conflicts of law.
Any action against the undersigned concerning this Note and the
indebtedness evidenced hereby may be brought in any court of
competent jurisdiction located in the State of California, and
the undersigned hereby accepts the non-exclusive jurisdiction of
any such court and waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to maintenance of such
action.
The Company has caused this Note to be signed in its name by
its duly authorized officers.
MAXTOR CORPORATION
By: /s/ Xxxxx Xxxxx
Title: Treasurer
Attachment 1
Date Amount of Repayment Outstanding Interest
Advance Principal Balance
