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EXHIBIT 10.64
WAIVER AND AMENDMENT NO. 1
TO THE CREDIT AGREEMENT
Dated as of May 22, 1998
WAIVER AND AMENDMENT NO. 1 TO THE CREDIT AGREEMENT among, Maxtor
Corporation, a Delaware corporation (the "Borrower") and Nomura Bank
International p1c (the "Lender").
PRELIMINARY STATEMENTS:
(1) The Borrower and the Lender have entered into a 364-Day Credit
Agreement dated as of October 31, 1997 (the "Credit Agreement"). Capitalized
terms not otherwise defined in this Amendment have the same meanings as
specified in the Credit Agreement.
(2) Hyundai Electronics Industries, Co., Ltd. ("HEI") has released its
1997 year end financial statements, which financial statements indicate that HEI
is in default of the financial covenant set forth in Section XI(a) of the
Guaranty (the "HEI Default").
(3) The Borrower has requested that the Lender waive the HEI Default,
amend certain provisions of the Credit Agreement and accept Hyundai Heavy
Industries Co., Ltd. as a guarantor in the place of HEI.
(4) The Lender is, on the terms and conditions stated below, willing to
grant the request of the Borrower and the Borrower and the Lender have agreed to
amend the Credit Agreement as hereinafter set forth.
SECTION 1. Waivers. Effective as of the date of the origination of the
HEI Default and subject to the satisfaction of the conditions precedent set
forth in Section 4, the Lender hereby (a) waives Section 6.01(c)(ii) of the
Credit Agreement to the extent of the HEI Default, (b) waives Section 6.01(d) of
the Credit Agreement to the extent that the HEI Default constitutes an event or
condition that would permit the acceleration of the maturity of any Debt
referred to in Section 6.01(d), but only so long as the maturity of such Debt
has not been accelerated and (c) agrees that the HEI Default or cross defaults
caused by the HEI Default does not constitute a Material Adverse Change.
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SECTION 2. Amendments to Credit Agreement. The Credit Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 4, hereby amended as follows:
(a) Section 1.01 is amended by deleting the definitions of
"Margin", "Guarantor", "Guaranty" and "Hyundai Group" set forth therein
and replacing them, respectively with the following new definitions:
"Margin" means, as of any date prior to April 1, 1998, a
percentage per annum equal to .73 % for the Loan and, as of any
date on or after April 1, 1998, a percentage per annum equal to
1.93 % for the Loan.
"Guarantor" means Hyundai Heavy Industries Co., Ltd., a
company incorporated with limited liability in the Republic of
Korea.
"Guaranty" means the guaranty executed by the Guarantor
in the form attached on Exhibit A to Amendment No. 1.
"Hyundai Group" means, collectively, the Guarantor,
Hyundai Merchant Marine Co., Ltd., Hyundai Corporation and
Hyundai Electronics Industries Co., Ltd.
(b) Section 1.01 is further amended by adding thereto in proper
alphabetical sequence the following definition:
"Amendment No. 1" means Waiver and Amendment No. 1 to
the Credit Agreement dated as of May 22, 1998.
(c) Section 4.01 (f) is amended by deleting therefrom, in both
places where such date appears, the date "December 31, 1996" and
substituting therefor the date "December 31, 1997".
(d) Section 5.02(b)(iii)(A) is amended in full to read as
follows:
(A) Debt incurred in connection with the Securitization
or any Debt extending the maturity of, or refunding or
refinancing, in whole or in part, any such Debt to the extent
that such Debt does not exceed $225,000,000 in the aggregate,
(e) Section 5.02(c) is amended by adding the following clause
(iii) immediately before the period at the end of such section: "and
(iii) a wholly-owned
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special purpose Subsidiary of the Borrower may convey, transfer or
otherwise dispose of receivables pursuant to any transaction described
in Section 5.02(b)(iii)(A)".
(f) Section 6.01(h)(ii) is amended by deleting the phrase "on
the date hereof" and substituting therefor the phrase "on the date of
Amendment No. 1".
SECTION 3. Release of HEI Guaranty. Effective as of the date of the
origination of the HEI Default and subject to the satisfaction of the conditions
precedent set forth in Section 4, the HEI Guaranty is hereby terminated as it
relates to the Credit Agreement.
SECTION 4. Conditions of Effectiveness. This Amendment is subject to the
provisions of Section 7.01 of the Credit Agreement. This Amendment shall become
effective as of the date of the origination of the HEI Default when the Lender
shall have received counterparts of this Amendment executed by the Borrower and
have additionally received all of the following documents:
(a) Certified copies of (i) the resolutions of the Board of
Directors, (ii) the approval of the Representative Director of the
Guarantor evidencing approval of the Guaranty and the matters
contemplated hereby and thereby and (iii) all documents evidencing other
necessary corporate action and governmental approvals, if any, with
respect to this Amendment, the Guaranty and the matters contemplated
hereby and thereby.
(b) A certificate of the Secretary or an Assistant Secretary of
the Borrower and the Representative Director or a duly authorized
officer of the Guarantor certifying the names and true signatures of the
officers of the Borrower and the Guarantor authorized to sign this
Amendment and the Guaranty, respectively, and the other documents to be
delivered hereunder and thereunder.
(c) Counterparts of the Guaranty in the form attached as Exhibit
A hereto, executed by the Guarantor.
(d) Favorable opinions of Xxx, Xxx & Xxx, counsel for the
Guarantor, or other Korean counsel to the Guarantor, and the Corporate
Counsel of the Guarantor, in substantially the form of Exhibits B and C
hereto and as to such other matters as the Lender may reasonably
request.
(e) A certificate signed by a duly authorized officer of the
Borrower stating that:
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(i) The representations and warranties contained in
Section 5 below are correct on and as of the date of such
certificate as though made on and as of such date; and
(ii) After giving effect to this Amendment, no event has
occurred and is continuing that constitutes a Default.
SECTION 5. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
(a) Each Loan Party is a corporation duly organized, validly
existing and, where applicable, in good standing under the laws of the
jurisdiction of its incorporation.
(b) The execution, delivery and performance by each Loan Party
of this Amendment and the Loan Documents, as amended hereby, to which it
is or is to be a party, and the consummation of the transactions
contemplated hereby, are within such Loan Party's corporate powers, have
been duly authorized by all necessary corporate action, and do not
contravene (i) such Loan Party's charter or by-laws or (ii) any law,
regulation (including, without limitation, Regulations U and X of the
Board of Governors of the Federal Reserve System) or contractual
restriction binding on or affecting the Loan Parties.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery and
performance by either Loan Party of this Amendment or any other Loan
Document to which it is or is to be a party, except for those
authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(c) hereto, all of which have been duly obtained, taken,
given or made and are in full force and effect except that the Guarantor
is required to report to its designated foreign exchange trading bank
any payment to be made under the Guaranty at the time of making such
payment.
(d) This Amendment and the Guaranty have been duly executed and
delivered by each Loan Party party thereto. This Amendment and each of
the other Loan Documents, as amended hereby, to which the Borrower is a
party is, and the Guaranty is, the legal, valid and binding obligation
of each of the Borrower and the Guarantor, respectively, enforceable
against each such Loan Party in accordance with their respective terms.
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(e)(i) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 28, 1997, and the related Consolidated
statements of income and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, accompanied by an opinion of Coopers &
Xxxxxxx, independent public accountants, copies of which have been
furnished to the Lender, fairly present the Consolidated financial
condition of the Borrower and its Subsidiaries as at such date and the
Consolidated results of the operations of the Borrower and its
Subsidiaries for the period ended on such date, all in accordance with
generally accepted accounting principles consistently applied. Since
December 28, 1997, there has been no Material Adverse Change with
respect to the Borrower.
(ii) The balance sheet of the Guarantor and its Subsidiaries
as at December 31, 1997, and the related statements of income and cash
flows of the Guarantor and its Subsidiaries for the fiscal year then
ended, accompanied by an opinion of Samil Accounting Corporation, a
member firm of Coopers & Xxxxxxx, independent public accountants, copies
of which have been furnished to the Lender, fairly present the financial
condition of the Guarantor and its Subsidiaries as at such date and the
results of the operations of the Guarantor and its Subsidiaries for the
periods ended on such date, all in accordance with generally accepted
financial accounting standards in the Republic of Korea consistently
applied. Since December 31, 1997, there has been no Material Adverse
Change with respect to the Guarantor.
(f) There is no pending or threatened action, suit,
investigation, litigation or proceeding, including, without limitation,
any Environmental Action, affecting either Loan Party or any of its
Subsidiaries before any court, governmental agency or arbitrator that
(i) could be reasonably likely to have a Material Adverse Effect or (ii)
purports to affect the legality, validity or enforceability of this
Amendment, the Guaranty or any other Loan Document, as amended hereby,
or the consummation of the transactions contemplated hereby.
SECTION 6. Reference to and Effect on the Loan Documents. (a) On and
after the effectiveness of this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, and each reference in the Notes and each of
the other Loan Documents to "the Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement, as amended by this Amendment.
(b) On and after the effectiveness of this Amendment, each reference in
the Credit Agreement to "the Guaranty", "thereunder", "thereof" or words of like
import referring to the Guaranty, shall mean and he a reference to the Guaranty,
as defined in the Credit Agreement as amended by this Amendment.
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(c) The Credit Agreement and the Notes, as specifically amended by this
Amendment, are and shall continue to be in full force and effect and are hereby
in all respects ratified and confirmed.
(d) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Lender under any of the Loan Documents, nor constitute a
waiver of any provision of any of the Loan Documents.
SECTION 7. Costs and Expenses. The Borrower agrees to pay on demand all
costs and expenses of the Lender in connection with the preparation, execution,
delivery and administration, modification and amendment of this Amendment, the
Guaranty and the other instruments and documents to be delivered hereunder
(including, without limitation, the reasonable fees and expenses of counsel for
the Lender) in accordance with the terms of Section 7.04 of the Credit
Agreement,
SECTION 8. Execution in 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.
Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.
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SECTION 9. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
MAXTOR CORPORATION
By /s/ Authorized Signature
-------------------------------------
Title:
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NOMURA BANK INTERNATIONAL plc
as Lender
By /s/ Authorized Signature
-------------------------------------
Title: Deputy General Manager
/s/ Authorized Signature
-------------------------------------
SENIOR EXECUTIVE
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SCHEDULE 4.01(c)
REQUIRED AUTHORIZATIONS AND APPROVALS
1. Report to, and acceptance thereof, by the designated foreign exchange
trading bank in respect of the Guaranty.
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SCHEDULE 4.01(e)
MATERIAL ADVERSE CHANGE
1. None.
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MAXTOR CORPORATION
SECRETARY'S CERTIFICATE
I, Xxxxx X. Xxxxxxx, Secretary of Maxtor Corporation, a Delaware
corporation, do hereby certify, in connection with (i) the Waiver and Amendment
No. 1 dated May 22, 1998 (the "Waiver and Amendment") to the Credit Agreement
dated August 29, 1996 among Maxtor Corporation, the banks, financial
institutions and other institutional lenders parties, Citicorp Securities, Inc.
and Hanil Bank, as joint arrangers, ABN AMRO Bank, N.V., San Francisco
International Branch and Royal Bank of Canada, as co-agents, Fleet National
Bank, as manager, and Citibank, N.A., as administrative agent, (ii) the Waiver
and Amendment No. 1 dated May 22, 1998 (the "364-Day Credit Agreement Waiver
and Amendment") to the 364-Day Credit Agreement dated August 29, 1996 among
Maxtor Corporation, the banks, financial institutions and other institutional
lenders parties, Citicorp Securities, Inc. and Hanil Bank, as joint arrangers,
ABN AMRO Bank, N.V., San Francisco International Branch and Royal Bank of
Canada, as co-agents, Fleet National Bank, as manager, and Citibank, N.A., as
administrative agent and (iii) the Waiver and Amendment No. 1 dated May 22 1998
to the Credit Agreement dated October 30, 1997 between Maxtor Corporation and
Nomura International Bank plc (together with the Waiver and Amendment and the
364-Day Credit Agreement Waiver and Amendment, the "Waivers and Amendments"),
that:
1. Attached hereto as Exhibit A is a true and correct copy of
resolutions duly adopted by the Board of Directors of Maxtor at a
meeting thereof duly called and held on May 13, 1998, at which
meeting a quorum was present and acting throughout. Such
resolutions are the only resolutions regarding the Agreements, have
not been amended, modified or revoked and are in full force and
effect on the date hereof.
2. The Waivers and Amendments to which Maxtor is a party, as executed
and delivered on behalf of Maxtor, are substantially in the form
thereof approved by the Board of Directors referred to in paragraph
1 hereof.
3. The below named persons, who include all persons who, as officers
of Maxtor, executed and delivered the Waivers and Amendments, were
on the date of such execution, and are on the date hereof, duly
appointed, qualified and acting as such officers holding their
respective offices below set opposite their names, and the
signatures below set opposite their names are their genuine
signatures:
Name Office Signature
---- ------ ---------
Xxxxxxx X. Xxxxxx President and Chief
Executive Officer ---------------------
Xxxx X. Xxxxxx Vice President Finance,
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and Chief Financial
Officer /s/ XXXX X. XXXXXX
-----------------------
Raja Venkatesh Corporate Treasurer /s/ RAJA VENKATESH
-----------------------
IN WITNESS WHEREOF, I have signed this certificate this 29 day of May,
1998.
/s/ XXXXX X. XXXXXXX
--------------------------------
Xxxxx X. Xxxxxxx, Secretary
I, Xxxx X. Xxxxxx, Vice President of Maxtor Corporation, do hereby
certify that Xxxxx X. Xxxxxxx has been duly appointed and has duly qualified as,
and on this day is, Secretary of Maxtor Corporation, and the signature above is
his genuine signature.
IN WITNESS WHEREOF, I have signed this certificate this 29 day of May,
1998.
/s/ XXXX X. XXXXXX
---------------------------------
Xxxx X. Xxxxxx
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RESOLUTIONS OF THE BOARD OF DIRECTORS OF MAXTOR CORPORATION
Dated: May 13, 1998
WHEREAS, the Corporation has entered into a Credit Agreement (the
"Credit Agreement") dated August 29, 1996 with the banks, financial institutions
and other institutional lenders parties (collectively, the "Lenders"), Citicorp
Securities, Inc. and Hanil Bank, as joint arrangers, ABN AMRO Bank, N.V., San
Francisco International Branch and Royal Bank of Canada, as co-agents.
WHEREAS, the Corporation has entered into a 364-Day Credit Agreement
(the "364-Day Credit Agreement") dated August 29, 1996 with the banks, financial
institutions and other institutional lenders parties (collectively, the "364-Day
Credit Agreement Lenders"), Citicorp Securities, Inc. and Hanil Bank, as joint
arrangers, ABN AMRO Bank, N.V., San Francisco International Branch and Royal
Bank of Canada, as co-agents, Fleet National Bank, as manager, and Citibank,
N.A., as administrative agent.
WHEREAS, the Corporation has entered into a Credit Agreement (the
"Nomura Credit Agreement") dated October 30, 1997 with Nomura International Bank
plc (together with the Lenders and the 364-Day Credit Agreement Lenders, the
"Maxtor Lenders").
WHEREAS, under such Credit Agreements, Hyundai Electronics Industries,
Co., Ltd. ("HEI") guaranteed the payments of Maxtor Corporation to the Maxtor
Lenders under a guaranty (the "Guaranty").
WHEREAS, HEI released its 1997 year end financial statements, which
financial statements indicate that HEI is in default of the financial covenants
of the Guaranty, (the "HEI Default").
NOW, THEREFORE, BE IT RESOLVED, that it is in the best interests of the
Corporation in order to ensure the availability of working capital to the
Corporation to request that the Maxtor Lenders waive the HEI Default.
RESOLVED FURTHER, that it is in the best interests of the Corporation to
enter into the (i) Waiver and Amendment No. 1 dated May 22, 1998 to the Credit
Agreement, (ii) Waiver and Amendment No. 1 dated May 22, 1998 to the 364-Day
Credit Agreement and (iii) Waiver and Amendment No. 1 dated May 22, 1998 to the
Nomura Credit Agreement (together the "Waivers and Amendments").
RESOLVED FURTHER, that the Waivers and Amendments and the performance by
the Corporation of its obligations under the Waivers and Amendments, be, and the
same hereby are, in all respects approved, and that the Chairman of the Board of
Directors of the Corporation, the President, any Vice
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President or the Treasurer of the Corporation (each an "Authorized Officer") be,
and each of them hereby is, authorized and directed (any one of them acting
alone), in the name and on behalf of the Corporation, to execute and deliver the
Waivers and Amendments, each in the form as the Authorized Officer of the
Corporation executing the same shall approve, such approval to be conclusively
evidenced by his or her execution and delivery thereof; and
RESOLVED FURTHER, that prior to the execution of the Waivers and
Amendments, the Authorized Officers are, and each hereby is, authorized to
negotiate and agree on the terms and conditions of each of the Waivers and
Amendments as such Authorized Officers, or any one of them, in his, her or their
sole discretion, deem to be in the best interests of the Corporation; and
RESOLVED FURTHER, that the Authorized Officers be, and each of them
hereby is, authorized and empowered (any one of them acting alone) to do or
cause to be done all such acts or things and to sign and deliver, or cause to be
signed and delivered, all such documents, instruments and certificates
(including, without limitation, all notices and certificates required or
permitted to be given or made under the terms of the Waivers and Amendments) and
to pay all such expenses, in the name and on behalf of the Corporation or
otherwise as such Authorized Officer may deem necessary, advisable or
appropriate to effectuate or carry out the purposes and intent of the foregoing
resolutions and to perform the obligations of the Corporation under the Waivers
and Amendments and the other agreements and instruments as referred to above or
referred to therein; and
RESOLVED FURTHER, that the Corporation hereby authorizes, ratifies,
confirms and adopts in all respects all acts of the officers of the Corporation,
and of any person designated and authorized to act by an officer of the
Corporation, heretofore done or performed by such person in connection with the
acts and transactions approved by these resolutions.
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Filed with the minutes of the proceedings of the Board of Directors by
the undersigned on May 13, 1998.
/s/ XXXXX X. XXXXXXX
----------------------------------------
Secretary
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GUARANTY
May 29, 1998
To Nomura Bank International plc
I. For and in consideration of any indebtedness to you under the 364 Day
Credit Agreement (as amended to date, the "Credit Agreement") dated as of
October 31, 1997 between you and Maxtor Corporation, a Delaware corporation
having an address at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000
(hereinafter called the "Borrower"), and the Note (as defined in the Credit
Agreement) for the payment of which the undersigned is now obligated to you,
either as guarantor or otherwise, and/or in order to induce you, in your
discretion, at any time(s) hereafter, to make any loan(s) or advance(s) or to
extend credit in any other manner to, or at the request of or for the account
of, the Borrower, either with or without security, under the Credit Agreement,
(all liabilities and obligations of the Borrower to you under the Credit
Agreement and the Note (as defined in the Credit Agreement) being hereinafter
referred to as "Obligations"), the undersigned does hereby unconditionally
GUARANTEE and INDEMNIFY the punctual payment when due to you of each and all of
the Obligations, together with interest thereon and any and all expenses which
may be incurred by you in collecting all or any of the Obligations and/or in
enforcing any rights hereunder.
II. It is understood and agreed that (i) the undersigned guarantees that
the Obligations will be paid to you strictly in accordance with the terms and
provisions of the Credit Agreements. In reference thereto, regardless of any
law, regulation or decree, now or hereafter in effect, which might in any manner
affect any of the terms or provisions of the Credit Agreements or your rights
with respect thereto as against the Borrower, or cause or permit to be invoked
any alteration in the time, amount or manner of payment by the Borrower of any
of the Obligations, and (ii) in each instance when the Borrower shall have
agreed, relative to any one or more of the Obligations, to pay or provide your
Head Office or any of your branches or correspondents with any amount of money
that is other than that which is locally in common circulation at the time as
currency in the place where such agreement is made, and such amount is not
actually paid or provided at and when agreed or within such time as you may deem
reasonable, the undersigned will, upon request and as you may elect, either pay
or provide the amount in the exact currency and place as agreed by the Borrower
or pay or provide you in the City of New York with the equivalent of the amount
in U.S. dollars at your then prevailing rate for sales of the kind of currency
agreed to be paid or provided for transfer by cable to a place where it is
current on condition that the undersigned obtains necessary permission from the
Korean Government in case such permission is required under the Korean laws and
regulations concerning foreign exchange control then in force.
III. As security for any and all liabilities of the undersigned to you,
now
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existing or hereafter arising hereunder, or otherwise, you are hereby given the
right to retain, and you are hereby given a lien upon any and all moneys or
other property (i.e., good and merchandise, as well as any and all documents
relative thereto; also funds, securities, choses in action and any and all
other forms of property whether real, personal or mixed, and any right, title or
interest of the undersigned therein or thereto), and/or the proceeds thereof,
which have/has been or may hereafter be, deposited or left with you (or with any
third party acting on your behalf) by or for the account or credit of the
undersigned, including (without limitation of the foregoing) that in safekeeping
or in which the undersigned may have any interest. All remittances and property
shall be deemed left with you as soon as put in transit to you by mail or
carrier. In the event of the happening of any one or more of the following, to
wit: (a) the non-payment of any of the Obligations after any applicable grace
period; (b) the dissolution or termination of existence of the Borrower or the
undersigned; (c) any petition in bankruptcy being filed by or against the
Borrower or the undersigned, or any proceedings in bankruptcy, or under any laws
or regulations of any jurisdiction relating to the relief of debtors, being
commenced for the relief or readjustment or any indebtedness of the Borrower or
the undersigned, either through reorganization, composition, extension or
otherwise; (d) the making by the Borrower or the undersigned of an assignment
for the benefit of creditors or the commencement of any proceedings by either
of the same of any insolvency law; (e) the appointment of a receiver of any
property of the Borrower or the undersigned undismissed after 45 days; (f) any
seizure, vesting or intervention by or under authority of a government, by which
the management of either the Borrower or the undersigned is displaced or its
authority in the conduct of its business is curtailed; (g) the attachment or
distraint of any funds or other property of the Borrower or the undersigned
which may be in, or come into, your possession or under your control, or that of
any third party acting for you, or of the same becoming subject at any time to
any mandatory order of court or other legal process -- then, or at any time(s)
any such event exists, any or all of the Obligations shall, at your option,
become (for the purposes of this guaranty) immediately due and payable by the
undersigned, without demand or notice. Furthermore, in any such event, full
power and authority are hereby given you to sell, assign, and deliver the whole
or any of the property upon which you have hereinbefore been given a lien, at
any broker's board, or at public or private sale, at your option, either for
cash or on credit or for future delivery, without assumption of any credit risk,
and without either demand, advertisement or notice of any kind, all of which are
hereby expressly waived, and no delay on your part in exercising any power of
sale or any other rights or options hereunder, and no notice or demand, which
may be given to or made upon the undersigned by you with respect to any power of
sale or other right or option hereunder, shall constitute a waiver thereof, or
limit or impair your right to take any action or to exercise any power of sale
or any other rights hereunder, without notice or demand, or prejudice your
rights as against the undersigned in any respect. At any sale hereunder, you may
purchase the whole or any part of the property sold, free from any right of
redemption on the part of the undersigned, all such rights being also hereby
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waived and released. In the event of any sale or other disposition of any of the
property aforesaid, after deducting all costs or expenses of every kind for
care, safekeeping, collection, sale, delivery or otherwise, you shall, after
applying the residue of the proceeds of the sale, or other disposition thereof,
to the payment or reduction (in whole or in part) of the principal and/or
interest (as you may elect) then owing on the Obligations, and after making
proper allowance for interest on Obligations not then due, return any excess to
the undersigned, all without prejudice to your rights as against the undersigned
with respect to any and all amounts which may then be or remain unpaid on any
Obligations.
IV. The undersigned hereby consents and agrees that you may at any time,
or from time to time, in your discretion; (1) extend or change the time of
payment, and/or the manner, place or terms of payment of all or any of the
Obligations; (2) exchange, release, fail to perfect, and/or surrender all or any
of the collateral security, or any part(s) thereof, by whomsoever deposited
which is now or may hereafter be held by you in connection with all or any of
the Obligations; (3) sell and/or purchase all or any such collateral at public
or private sale, or at any broker's board, and after deducting all costs and
expenses of every kind for collection, sale or delivery, the net proceeds of any
such sale(s) may be applied by you upon all or any of the Obligations; and (4)
settle or compromise with the Borrower, and/or any other person(s) liable
thereon, any and all of the Obligations, and/or subordinate the payment of same,
or any part(s) thereof, to the payment of any other debts or claims, which may
at any time(s) be due or owing to you and/or any other person(s) or
corporation(s); all in such manner and upon such terms as you may deem proper,
and without notice to or further assent from the undersigned, it being hereby
agreed that the undersigned shall be and remain bound upon this guaranty,
irrespective of the existence, value or condition of any collateral, and
notwithstanding any such change, exchange, settlement compromise, surrender,
release, sale, application, renewal or extension, and notwithstanding also that
the Obligations may at any time(s) exceed the aggregate principal sum
bereinabove prescribed. The liability of the undersigned under this guaranty
shall be unconditional irrespective of (i) any amendment or waiver or consent to
departure from the terms of any Obligation provided that any such amendment does
not relate to an increase in the amount of the Obligation or an extension of the
maturity of such Obligation which has not been consented to by the undersigned,
(ii) any change in the corporate existence, structure or ownership of the
Borrower, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Borrower or its assets or any resulting release or
discharge of any of the Obligations, (iii) the existence of any claim, set-off
or other rights which the undersigned may have at any time against the Borrower,
you, or any other corporation or person, whether in connection herewith or any
unrelated transactions, provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim, and (iv) any
other circumstance which might otherwise constitute a defense available to, or a
legal or equitable discharge of, the Borrower or a
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guarantor.
V. The undersigned hereby waives notice of acceptance of this guaranty,
and also presentment, demand, protest and notice of dishonor of any and all of
the Obligations, and promptness in commencing suit against any party thereto or
liable thereon, and/or in giving any notice to or of making any claim or demand
hereunder upon the undersigned, and any requirement that you exhaust any right
or take any action against the Borrower or any collateral security. This
guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any Obligation is rescinded or must otherwise be
returned by you upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, all as though such payment had not been made. No act or
omission of any kind on your part in the premises shall in any event affect or
impair this guaranty.
VI. This is a continuing guaranty and shall (i) remain in full force and
effect until written notice shall have been received by you from the undersigned
(or the successor or legal representative of the undersigned) that it has been
revoked, but any such notice shall not release the undersigned from any
liability as to any Obligations which may be held by you, or in which you may
have any interest, at the time of the receipt of such notice; (ii) be binding
upon the undersigned, the heirs, executors, administrators, successors and
assigns of the undersigned, and shall inure to the benefit of, and be
enforceable by, you, your successors, transferees and assigns; and (iii) be
deemed to have been made under and shall be governed by the laws of Korea in all
respects, including matters of construction, validity and performance, and it is
understood and agreed that none of its terms or provisions may be waived,
altered, modified or amended except in writing duly signed for and on your
behalf.
VII. Any and all payments by the undersigned hereunder shall be made
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, all liabilities with
respect thereto, excluding (i) taxes imposed on your overall net income, (ii)
franchise taxes imposed on you in lieu of net income taxes by the jurisdiction
under the laws of which you are organized or any political subdivision thereof,
and (iii) if applicable, taxes imposed on your overall net income, and franchise
taxes imposed on you in lieu of net income taxes, by the jurisdiction of your
lending office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the undersigned shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this paragraph) you will receive an amount equal to the sum you would have
received had no such deductions been made, (ii) the undersigned shall make such
deductions and (iii) the undersigned shall pay
20
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law. In addition, the undersigned agrees to pay
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, performing under or otherwise
with respect to, this guaranty or the Obligations (hereinafter referred to as
"Other Taxes"). Within 30 days of any payment of Taxes, the undersigned will
furnish to you the original or a certified copy of a receipt evidencing payment
thereof. The undersigned will indemnify you for the full amount of Taxes or
Other Taxes (including, without limitation, any taxes imposed by any
jurisdiction on amounts payable under this paragraph) paid by you or any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted, within 30 days of your request therefor. Without prejudice to
the survival of any other agreement contained herein, the agreements and
obligations of the undersigned contained in this paragraph shall survive the
payment in full of the Obligations and principal and interest hereunder and any
termination or revocation of this guaranty. In the case of any payment hereunder
by or on behalf of the Guarantor through an account or branch outside the United
States or on behalf of the Guarantor by a payer that is not a United States
person, if the Guarantor determines that no Taxes are payable in respect
thereof, the Guarantor shall furnish, or shall cause such payer to furnish, to
the Administrative Agent, at such address, an opinion of counsel acceptable to
the Administrative Agent stating that such payment is exempt from Taxes. For
purpose of the preceding sentence, the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
VIII. Notwithstanding any other provision of this guaranty, until
payment in full of the Obligations after termination of any of your commitments
with respect thereto, (i) the undersigned hereby irrevocably waives any right to
assert, enforce, or otherwise exercise any right of subrogation to any of the
rights, security interests, claims, or liens which you have against the Borrower
in respect to the Obligations, (ii) the undersigned shall have no right of
recourse, reimbursement, contribution, indemnification, or similar right that
the undersigned may have (by contract or otherwise) against the Borrower in
respect of the Obligations, and (iii) the undersigned hereby irrevocably waives
any and all of the foregoing rights and also irrevocably waives the benefit of,
and any right to participate in, any collateral or other security given to you
to secure payment of the Obligations.
IX. If the undersigned shall fail to pay any of its obligations
hereunder when the same shall become due and payable, you are hereby authorized
at any time and from time to time, 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 and other indebtedness at any time owing
by you to or for the credit or account of the
21
undersigned against any and all of the Obligations, whether or not you shall
have made any demand under this guaranty. You agree promptly to notify the
undersigned after any such set-off and application, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
Your rights under this paragraph are in addition to other rights and remedies
(including, without limitation, other rights of set off) which you may have.
X. The undersigned hereby represents and warrants as follows: (i) the
execution, delivery and performance by the undersigned of this guaranty are
within its corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (x) its articles of incorporation or
by-laws or (y) law or any contractual restriction binding on or affecting it or
any entity that controls it; (ii) all authorizations, approvals, consents,
licenses, exemptions, filings, registrations and other requirements of
governmental, judicial and public bodies and authorities of or in Korea required
of the Guarantor in connection with the entry into and performance of this
Guaranty have been obtained and are in full force and effect, except that the
undersigned is required to report to its designated foreign exchange trading
bank any payment to be made under this Guaranty at the time of making each such
payment; and (iii) this guaranty has been duly executed and delivered by the
undersigned, and is the legal, valid and binding obligation of the undersigned,
enforceable against it in accordance with its terms.
XI. The undersigned covenants and agrees that, so long as any part of
the Obligations shall remain unpaid or any Lender shall have any commitment to
lend under either Credit Agreement, (a) the Tangible Net Worth of the
undersigned on the last day of any fiscal quarter shall be not less than the sum
of (i) 70% of the Tangible Net Worth as of December 31, 1997 plus (ii) 50% of
positive Net Income of the undersigned for each fiscal year of the undersigned
beginning with the fiscal year ending December 31, 1998 and (b) the undersigned
shall maintain a ratio of current assets to current liabilities greater than or
equal to 0.8. "Tangible Net Worth" shall mean the excess of (x) total tangible
assets over (y) total liabilities, and "Net Income" shall mean the difference,
after taxes, between total revenues and total costs and expenses.
XII. Delivery of an executed counterpart of a signature page to this
guaranty by telecopier shall be effective as delivery of a manually executed
counterpart of this guaranty.
HYUNDAI HEAVY INDUSTRIES CO., LTD.
[SEAL]
By /s/ HYUNG BYUK XXX
------------------------------------
Name: Hyung Byuk Xxx
Title: Representative Director
22
[LETTERHEAD OF BAC, XXX & XXX]
May 22, 1998
To: Nomura Bank International plc
Xxxxxx Xxxxx
0, Xx Xxxxxx'x-Xx-Xxxxx
Xxxxxx XX0X 0XX
(the "Lender")
Re: Hyundai Heavy Industries Co., Ltd.
Ladies and Gentlemen:
We have acted as the Korean legal advisers to Hyundai Heavy Industries Co.,
Ltd. (the "GUARANTOR") in connection with a Corporate Guaranty (the "GUARANTY")
dated May 22, 1998 issued by the Guarantor in favor of the Lender for the
purpose of guaranteeing the obligations of Maxtor Corporation as the Borrower
under the above-mentioned Credit Agreement (the "CREDIT AGREEMENT") as amended
by a certain waiver and amendment no. 1 to the Credit Agreement (the "AMENDMENT
AGREEMENT") dated May 22, 1998. Terms defined in the Credit Agreement and
Amendment Agreement are used herein as therein defined and the term "Korea"
refers to the Republic of Korea.
This opinion is furnished to you pursuant to Section 4(d) of the Amendment
Agreement.
For the purpose of this opinion, we have examined:
(a) the Credit Agreement;
(b) the Amendment Agreement;
(c) the Guaranty;
(d) the Articles of Incorporation of the Guarantor;
(e) the Regulations of the Board of Directors of the Guarantor;
(f) Commercial Registry extracts regarding the Guarantor;
(g) the Approval of the Guarantor's Representative Director in respect of
the Guaranty;
23
Xxx, Xxx & Xxx
May 22, 1998
Page 2.
(h) the report to, and acceptance thereof by, the designated foreign
exchange trading bank in respect of the Guaranty; and
(i) such other documents as we have considered necessary or relevant in
order for us to provide this opinion.
In giving this opinion we have assumed that:
(i) the authenticity of all signatures, seals, stamps and markings;
(ii) that all documents submitted to us as originals are authentic,
complete and up-to-date, all documents submitted to us as copies
conform to the originals, and that all factual statements made in
such documents are correct and we have relied on them without
further enquiry;
(iii) that the Credit Agreement and Amendment Agreement and any other
agreement or instrument thereunder have been validly authorized,
signed and delivered by the parties thereto (other than the
Guarantor) in accordance with applicable laws;
(iv) that the Credit Agreement and Amendment Agreement and any other
agreements or instruments thereunder constitute or will constitute
legal, valid and binding obligations of each of the parties thereto
enforceable in accordance with its terms respectively under the
laws of the State of New York by which the Credit Agreement and
Amendment Agreement and any other agreement or instrument are
expressed to be governed;
(v) that the copies of the Articles of Incorporation of, the
Regulations of the Board of Directors of and the Commercial
Registry extracts relating to, the Guarantor referred to in
paragraphs (d) through (f) above are true, complete, accurate and
up-to-date; and
(vi) that the Approval of the Guarantor's Representative Director
referred to in paragraph (g) above was duly executed and that such
Approval has not been amended or rescinded.
As to any other matters of objective fact material to the opinions
expressed herein, we have made no independent inquiry and have relied solely
upon certificates or oral or written statements of officers or other
representatives of the Guarantor.
Based on the foregoing, we are of the opinion that so far as the laws of
Korea are concerned;
24
Xxx, Xxx & Xxx
May 22, 1998
Page 3.
(1) The Guarantor is a limited liability company, duly organized and validly
existing under the laws of Korea, with full power and authority to enter
into and perform the Guaranty.
(2) The Guarantor has taken all necessary corporate action to authorize the
entry into and performance of the Guaranty and the transactions
contemplated thereby.
(3) The Guaranty constitutes a legal, valid and binding obligation of the
Guarantor enforceable in accordance with its terms and is in proper form
for its enforcement in the courts of Korea.
(4) The entry into the Guaranty and the performance of the obligations
thereunder by the Guarantor do not violate (i) any law or regulation of
Korea or any judicial order in Korea or (ii) the constitutional documents
of the Guarantor.
(5) All authorizations, approvals, consents, licenses, exemptions, filings,
registrations and other requirements of governmental, judicial and public
bodies and authorities of or in Korea required of the Guarantor in
connection with the entry into and performance of the Guaranty have been
obtained and are in full force and effect, except that the Guarantor is
required to report any payment to be made under the Guaranty at the time
of making each such payment to its designated foreign exchange trading
bank.
(6) The obligations of the Guarantor under the Guaranty rank at least pari
passu with all its other present or future unsecured and unsubordinated
obligations of the Guarantor except for those preferred by operation of
law applicable to companies generally.
(7) All amounts payable by the Guarantor under the Guaranty may be made free
and clear of and without deduction for or on account of any taxes imposed,
assessed or levied in Korea or by any authority thereof of therein except,
however, that although the tax laws of Korea are not entirely clear as to
whether payment of any interest by the Guarantor under the Guaranty may be
made without withholding of Korean taxes, the Korean tax authorities may
require the Guarantor to withhold Korean taxes from such interest payment.
In the event of Korean taxes being imposed on interest payments, the
guarantor's obligation to bear the cost of such tax under the Guaranty
would become operative.
(8) Neither the Guarantor nor any of its property (except such property
specifically protected by law) has any immunity from jurisdiction of any
court or from any legal process (whether through service or notice,
attachment prior to judgment,
25
Xxx, Xxx & Xxx
May 22, 1998
Page 4.
attachment in aid of execution or otherwise) under the laws of Korea.
(9) To ensure the enforceability or admissibility in evidence of this
Guaranty in Korea, it is not necessary that this Guaranty or any other
document or instrument be filed or recorded with any court or other
authority in Korea.
Our opinion is subject to the following general qualifications:
(i) the obligations of the Guarantor under the Guaranty may be limited or
affected by the bankruptcy law, the corporate reorganization law, the
compulsory composition law and other similar laws which generally
affect the rights of creditors; and
(ii) the remedies of specific performance or injunction might not
necessarily be available in Korea with respect to any particular
provisions of the Guaranty.
This opinion is addressed to you and may be relied upon solely by you
and your Counsel.
Yours faithfully,
/s/ XXX, XXX & XXX
-----------------------------------------
Xxx, Xxx & Xxx
26
HANDLING PERIOD
---------------
APPLICATION FOR THE VALIDATION OF GUARANTY
Tradename Hyundai Heavy Industries Co., Ltd.
APPLICANT Address 0, Xxxxxxx-xxxx, Xxxxx, Xxxxxxxx, Xxxxx
Name of CEO Hyung Byuk Xxx
Business area Manufacturing
Obligee(Lender) Nomura Bank International plc
DETAILS OF Obligor(Guarantor) Hyundai Heavy Industries Co., Ltd.
APPLICATION Beneficiary(Borrower) Maxtor Corporation
Amount USD10,000,000.
Effective period Until November 13, 1998
Purpose Working Capital
Repayment Lump Sum Repayment at maturity
We hereby apply for the validation of Guaranty in accordance with the
Article 21 of Korea Foreign Exchange Control Regulation.
1998
To: Applicant No. of Validation Singosuri0696-Keumyungl2-
Your application for the Validation of Validated amount USD10,000,000.-
Guaranty is approved. Effective period Until November 13, 1998
Condition : N/A
1998
Confirmation by the Authorized Foreign Exchange Bank:
On the basis of Korea Foreign Exchange Control Regulation, we as the
authorized bank, hereto affix the seal of us in testimony of approval.
THE PRESIDENT OF KOREA EXCHANGE BANK [SEAL]
(XXX-XXXX BRANCH)
27
May 27, 1998
To: Nomura Bank International plc (lender)
Re: Hyundai Heavy Industries Co., Ltd.
Ladies and Gentlemen:
I have acted as corporate counsel to Hyundai Heavy Industries Co., Ltd.
(the "GUARANTOR") in connection with a Corporate Guaranty (the "GUARANTY") dated
May , 1998 issued by the Guarantor in favor of Nomura Bank International plc
for the purpose of guaranteeing the obligations of Maxtor Corporation as the
Borrower under a certain credit agreement (the "CREDIT AGREEMENT") dated October
31, 1997 and entered into by and between Maxtor Corporation as borrower and
Nomura Bank International plc as lender as amended by a certain waiver and
amendment no. 1 to the Credit Agreement (the "AMENDMENT AGREEMENT") dated May
22, 1998. Terms defined in the Credit Agreement and the Amendment Agreement are
used herein as therein defined and the term "Korea" refers to the Republic of
Korea.
This opinion is furnished to you pursuant to Section 4(d) of the Amendment
Agreement. For the purpose of this opinion, I have examined:
(a) the Credit Agreement;
(b) the Amendment Agreement;
(c) the Guaranty; and
(d) such other documents, agreements, and instruments as I have
considered necessary or relevant in order for me to provide this
opinion.
Based on the foregoing, I am of the opinion that, so far as the laws of Korea
are concerned, the entry into the Guaranty and the performance of the
obligations thereunder by the Guarantor do not violate any contractual or legal
restriction contained in any document or agreement applicable to the Guarantor.
Yours faithfully,
/s/ X.X. XXX
----------------------
X.X. Xxx
Corporate Counsel
28
HYUNDAI HEAVY INDUSTRIES CO., LTD.
CERTIFICATE
THE UNDERSIGNED, Mr. Hyung Byuk Xxx, the Representative Director of Hyundai
Heavy Industries Co., Ltd., a corporation duly organized and existing under the
laws of the Republic of Korea with its registered head office at 0,
Xxxxxxx-xxxx, Xxxxx, Xxxxxxxx, Xxxxx (the "COMPANY"), does hereby certify:
(1) that attached hereto as EXHIBIT A is a true and correct copy of the
approval of the Representative Director of the Company approving,
among other things, the execution, delivery and performance by the
Company of a guaranty (the "GUARANTY") in favour of Nomura Bank"
International plc, named as lender (the "LENDER") in a certain
credit agreement (the "CREDIT AGREEMENT") dated October 31, 1997 as
amended by a certain waiver and amendment no. 1 to the Credit
Agreement in relation to the obligations of Maxtor Corporation (the
"BORROWER") under a credit facility (the "FACILITY") extended by the
Lender to the Borrower in an aggregate principal amount of up to
US$10,000,000, which approval has not been amended or rescinded and
are in full force and effect on the date hereof; and
(2) that attached hereto as EXHIBIT B is a true and correct copy of the
report to and acceptance thereof by its designated foreign exchange
trading bank of the Company in respect of the Guaranty, together
with an accurate English translation thereof.
Terms defined in the Credit Agreement and Guaranty shall have the same
respective meanings when used herein.
IN WITNESS WHEREOF, THE UNDERSIGNED has hereunto affixed his name and seal as of
this day of May, 1998.
For and on behalf of
HYUNDAI HEAVY INDUSTRIES CO., LTD.
By /s/ HYUNG BYUK XXX [SEAL]
------------------------------
Name: Hyung Byuk Xxx
Title: Representative Director
29
HYUNDAI HEAVY INDUSTRIES CO., LTD.
APPROVAL OF THE REPRESENTATIVE DIRECTOR
OF
HYUNDAI HEAVY INDUSTRIES CO., LTD.
THE UNDERSIGNED, Mr. Hyung Byuk Xxx, the Representative Director of
Hyundai Heavy Industries Co., Ltd. (the "COMPANY"), approves the execution,
delivery and performance by the Company of a guaranty (the "GUARANTY") in favour
of Nomura Bank International plc named as lender (the "LENDER") in a certain
credit agreement (the, "CREDIT AGREEMENT") dated October 31, 1997 as amended by
a certain waiver and amendment no. 1 to the Credit Agreement in relation to the
obligations of Maxtor Corporation (the "BORROWER") under a credit facility (the
"FACILITY") extended by the Lender to the Borrower in an aggregate principal
amount of up to US$10,000,000.
Terms defined in the Credit Agreement and Guaranty shall have the same
respective meanings when used herein.
IN WITNESS WHEREOF, THE UNDERSIGNED has hereunto affixed his name and seal
as of this day of May, 1998.
For and on behalf of
HYUNDAI HEAVY INDUSTRIES CO., LTD.
By /s/ HYUNG BYUK XXX [SEAL]
------------------------------
Name: Hyung Byuk Xxx
Title: Representative Director
