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Exhibit 10.62
FIRST AMENDMENT TO GUARANTY
THIS FIRST AMENDMENT TO GUARANTY (this "Amendment"), dated as of
December 25, 1998, is entered into by and between:
(1) XXX RESEARCH CORPORATION, a Delaware corporation (the
"Guarantor"); and
(2) ABN AMRO BANK N.V., acting as agent (in such capacity,
"Agent") for the financial institutions which are from time to time the
parties to the Loan Agreement referred to in Recital A below
(collectively, the "Lenders").
RECITALS
A. Pursuant to a Loan Agreement dated as of September 30, 1998 (as
amended pursuant to that certain Supplemental Agreement dated as of December 25,
1998, and as further amended or supplemented from time to time, the "Borrower
Loan Agreement"), among Xxx Research Co., Ltd., a Japanese limited liability
stock company ("Borrower"), the Lenders and Agent, the Lenders have agreed to
extend a certain credit facility to Borrower upon the terms and subject to the
conditions set forth therein. Borrower is a wholly-owned Subsidiary of
Guarantor.
B. The obligations of Borrower to Agent and the Lenders arising under
the Loan Agreement have been guaranteed by the Guarantor pursuant to that
certain Guaranty, dated as of September 30, 1998 (the "Guaranty"), executed by
the Guarantor in favor of Agent for the benefit of the Lenders.
C. The Guarantor has requested that Agent and the Lenders amend the
Guaranty in certain respects. Agent and the Lenders are willing so to amend the
Guaranty upon the terms and subject to the conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Guarantor, Agent and the Lenders hereby agree as follows:
1. DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the Guaranty, as amended by this
Amendment. The rules of construction set forth in Paragraph 1 of the Guaranty
shall, to the extent not inconsistent with the terms of this Amendment, apply to
this Amendment and are hereby incorporated by reference.
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2. AMENDMENT TO THE GUARANTY. Subject to the satisfaction of the
conditions set forth in Paragraph 4 below, the Guaranty is hereby amended as
follows:
(a) Subparagraph 1(a) is amended by adding thereto, in the
appropriate alphabetical order, definitions of the term "Cash Balances",
"Letters of Credit", "Loans" and "Reimbursement Obligations" to read in
their entirety as follows:
"Cash Balances" shall mean, with respect to Guarantor and
its Subsidiaries at any time, the remainder, determined on a
consolidated basis in accordance with GAAP, of:
(a) The unrestricted, unencumbered sum of (i) the
cash of Guarantor and its Subsidiaries at such time and
(ii) the market value of cash equivalents (less than
ninety (90) days in term) and short-term marketable
securities (less than one (1) year in term) at such time;
minus
(b) The sum of (i) the aggregate principal amount
of all Loans outstanding at such time, (ii) the aggregate
amount available for drawing under all Letters of Credit
outstanding at such time and (iii) the aggregate amount of
all Reimbursement Obligations outstanding at such time.
"Letters of Credit" shall have the meaning given to the
term "Letters of Credit" under the Guarantor Credit Agreement.
"Loans" shall have the meaning given to the term "Loans"
under the Guarantor Credit Agreement.
"Reimbursement Obligation" shall have the meaning given to
the term "Reimbursement Obligation" under the Guarantor Credit
Agreement.
(b) Subparagraph 5(l) is amended by changing clause (iv) thereof
to read in its entirety as follows:
(iv) Guarantor shall not permit its Tangible Net Worth (A)
on December 27, 1998 to be less than $350,000,000 and (B) on any
date of determination (such date to be referred to herein as a
"determination date") which occurs after December 27, 1998 (such
date to be referred to herein as the "base date") to be less than
the sum on such determination date of the following:
(A) $350,000,000;
plus
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(B) Seventy-five percent (75%) of the sum of
Guarantor's consolidated quarterly net income
(ignoring any quarterly losses) for each quarter
ending after the base date through and including
the quarter ending immediately prior to the
determination date;
plus
(C) One hundred percent (100%) of the Net
Proceeds of all Equity Securities issued by
Guarantor and its Subsidiaries during the period
commencing on the base date and ending on the
determination date;
plus
(D) One hundred percent (100%) of the
aggregate decrease in the total liabilities of
Guarantor and its Subsidiaries resulting from
conversions of convertible Subordinated
Indebtedness or other liabilities of Guarantor and
its Subsidiaries into Equity Securities of
Guarantor and its Subsidiaries during the period
commencing on the base date and ending on the
determination date.
(c) Subparagraph 5(l) is further amended by changing clause (v)
thereof to read in its entirety as follows:
(v) Guarantor shall not incur a cumulative net loss
(exclusive of net income) greater than $35,000,000, determined in
accordance with GAAP, for the two quarter period commencing on
December 28, 1998 and ending on June 30, 1999.
(d) Subparagraph 5(l) is further amended by adding thereto a new
clause (vi) to read in its entirety as follows:
(vi) Guarantor shall not permit the Cash Balances of
Guarantor and its Subsidiaries to be less than $150,000,000 at
any time; provided, however, that if the net profits of Guarantor
and its Subsidiaries, determined in accordance with GAAP, for
each of the fiscal quarter periods ending on September 26, 1999
and December 26, 1999 is $1.00 or greater, commencing on the
fifteenth day following the date Guarantor is first required to
deliver the Financial Statements for the fiscal quarter period
ending on December 26, 1999, Guarantor shall no longer be
required to maintain such minimum Cash Balances.
3. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and
warrants to Agent and the Lenders that the following are true and correct on the
date of this
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Amendment and that, after giving effect to the amendment set forth in Paragraph
2 above, the following will be true and correct on the Effective Date (as
defined below):
(a) The representations and warranties of the Guarantor set forth
in Paragraph 3 of the Guaranty are true and correct in all material
respects; and
(b) No Default or Event of Default has occurred and is
continuing.
4. EFFECTIVE DATE. The amendments effected by Paragraph 2 above shall
become effective as of December 25, 1998 (the "Effective Date"), subject to
receipt by Agent and the Lenders on or prior to the Effective Date of the
following, each in form and substance satisfactory to Agent, the Lenders and
their respective counsel:
(a) This Amendment duly executed by the Guarantor and Agent;
(b) The Supplemental Agreement dated as of the date hereof, duly
executed by Borrower and Agent; and
(c) Such other evidence as Agent or any Lender may reasonably
request to establish the accuracy and completeness of the
representations and warranties and the compliance with the terms and
conditions contained in this Amendment and the Guaranty.
5. EFFECT OF THIS AMENDMENT. On and after the Effective Date, each
reference in the Loan Agreement to the Guaranty shall mean the Guaranty as
amended hereby. Except as specifically amended above, (a) the Guaranty shall
remain in full force and effect and is hereby ratified and confirmed and (b) 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
Agent or the Lenders, nor constitute a waiver of any provision of the Guaranty.
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6. MISCELLANEOUS.
(a) Counterparts. This Amendment may be executed in any number of
identical counterparts, any set of which signed by all the parties
hereto shall be deemed to constitute a complete, executed original for
all purposes.
(b) Headings. Headings in this Amendment are for convenience of
reference only and are not part of the substance hereof.
(c) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California without
reference to conflicts of law rules.
IN WITNESS WHEREOF, the Guarantor and Agent have caused this Amendment
to be executed as of the day and year first above written.
GUARANTOR XXX RESEARCH CORPORATION
By:
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Name:
Title:
AGENT ABN AMRO BANK N.V
By:
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Name:
Title:
By:
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Name:
Title:
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