Exhibit 10.50
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GUARANTEE
dated as of December 27, 2000
from
SANDISK CORPORATION,
as Guarantor
to
ABN AMRO BANK N.V.,
as Lessor and Agent,
and
EACH OF THE PARTICIPANTS
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FLASHVISION/SANDISK TRANCHE
2000 LEASE FINANCING
TABLE OF CONTENTS
Page
Section 1. Defined Terms..................................................1
Section 2. Guarantee......................................................8
Section 3. Intentionally Omitted..........................................8
Section 4. No Subrogation; Subordination..................................8
Section 5. Amendments, etc. with Respect to the Guaranteed Obligations;
Waiver of Rights...............................................9
Section 6. Guarantee Absolute and Unconditional..........................10
Section 7. Reinstatement.................................................10
Section 8. Payments......................................................11
Section 9. Representations of Guarantor..................................11
Section 10. Covenants of Guarantor........................................15
Section 11. Guarantee Events of Default; Remedies.........................26
Section 12. Notices.......................................................29
Section 13. Severability..................................................29
Section 14. Integration...................................................29
Section 15. Amendments in Writing.........................................29
Section 16. Section Headings..............................................29
Section 17. Successors and Assigns........................................29
Section 18. Submission to Jurisdiction....................................29
Section 19. WAIVER OF JURY TRIAL..........................................29
Section 20. GOVERNING LAW.................................................30
Section 21. Nature of Transaction.........................................30
Section 22. Actions by Guaranteed Parties.................................30
Section 23. Termination...................................................30
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SCHEDULES
Schedule I Notice Information
Schedule 9(u) Subsidiaries
Schedule 10(a)(iv)(M) Form of Annual Plan
Schedule 10(b)(i) Indebtedness
Schedule 10(b)(ii) Liens
Schedule 10(b)(iv)(D) Investments
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GUARANTEE
GUARANTEE (this "Guarantee"), dated as of December 27, 2000, made by
SANDISK CORPORATION, a Delaware corporation (the "Guarantor"), in favor of ABN
AMRO BANK N.V., a bank organized under the laws of the Netherlands, not in its
individual capacity, but solely as lessor (together with its permitted
successors and assign, the "Lessor"), ABN AMRO BANK N.V., as agent for each of
the Participants (in such capacity, together with its successors in such
capacity, the "Agent"), and each of the Participants.
W I T N E S S E T H:
WHEREAS, FlashVision, L.L.C., a Virginia limited liability company
(together with its permitted successors and assigns, the "Lessee"), Lessor,
Agent and the Participants have entered into that certain Participation
Agreement (FlashVision/SanDisk Tranche), dated as of the date hereof (as
amended, restated, modified or supplemented after the date hereof, the
"Participation Agreement (SanDisk Tranche)"), for the purpose of providing lease
financing in respect of certain equipment for Lessee; and
WHEREAS, pursuant to the Participation Agreement (SanDisk Tranche) and the
other SanDisk Tranche Operative Documents, on each Lease Supplement Closing Date
with respect to any Equipment, Lessor, using amounts funded by the Participants,
will pay to Lessee the Purchase Price of the Lease Supplement Equipment to be
purchased by Lessor on such Lease Supplement Closing Date, which Equipment shall
in turn be leased to Lessee by Lessor; and
WHEREAS, subject to the terms and conditions of the Participation
Agreement (SanDisk Tranche) and the other SanDisk Tranche Operative Documents,
from time to time during the Installation Period the Participants are willing to
purchase Participation Interests in Advances made by Lessor to fund a portion of
the Purchase Price of such Equipment; and
WHEREAS, it is a condition precedent to the obligations of Lessor, Agent
and the Participants under the Participation Agreement (SanDisk Tranche) that
Guarantor shall have executed and delivered this Guarantee to Lessor, Agent and
the Participants.
NOW, THEREFORE, in consideration of the premises and to induce Lessor to
enter into the Lease and the other SanDisk Tranche Operative Documents to which
it is a party and the Participants to enter into the Participation Agreement
(SanDisk Tranche) and to purchase their Participation Interests, Guarantor
hereby agrees as follows:
Section 1. Defined Terms.
(a) As used herein, the following terms shall have the following
respective meanings:
"Adverse Proceeding" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Guarantor or any of
Guarantor's Subsidiaries) at law or in equity, or before or by any
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.
Governmental Authority (including any Environmental Claims), whether pending or,
to the knowledge of Guarantor or its Subsidiaries, threatened in writing against
or affecting Guarantor or any of its Subsidiaries or any property of the
Guarantor or any of its Subsidiaries.
"Consolidated Assets" means, at any date of determination, the total
assets of the Guarantor and its Subsidiaries on a consolidated basis.
"Deposit Account" means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
"Domestic Subsidiary" means any Subsidiary organized under the laws of the
United States of America, any state thereof or the District of Columbia.
"Equity Securities" of any Person shall mean (a) all common stock,
preferred stock, participations, shares, partnership interests or other equity
interests in and of such Person (regardless of how designated and whether or not
voting or non-voting) and (b) all warrants, options and other rights to acquire
any of the foregoing.
"Fixed Charges" shall mean, for any period for which a determination is
made pursuant to the applicable terms of this Guarantee, the sum, without
duplication, determined in respect of Guarantor and its Subsidiaries on a
consolidated basis, of (a) Interest Expense of Guarantor and its Subsidiaries
for such period (including without limitation the interest and yield component
of any Funded Indebtedness of any Person (including Lessee) with respect to
which and to the extent Guarantor or any of its Subsidiaries has any Guaranty
Obligations) plus (b) current maturities of long term Funded Indebtedness of
Guarantor and its Subsidiaries, plus (c) all rental expenses of Guarantor and
its Subsidiaries for such period.
"Fixed Charge Coverage Ratio" shall mean for any period for which a
determination is made pursuant to the applicable terms of this Guarantee, with
respect to Guarantor and its Subsidiaries on a consolidated basis as of any day,
the ratio of (a) Guarantor EBITDAR for such period minus Capital Expenditures
for such period (but excluding, at all times during Guarantor's 2001 fiscal
year, up to $70,000,000 in the aggregate of Capital Expenditures made during
such fiscal year and, at all times during Guarantor's 2002 fiscal year, Capital
Expenditures made during such fiscal year in an aggregate amount equal to the
portion, if any, of aggregate Capital Expenditures so permitted to be excluded
in Guarantor's 2001 fiscal year which were not expended in such 2001 fiscal
year), to (b) Fixed Charges for such period.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"Funded Indebtedness" of any Person shall mean, without duplication:
(a) All obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments and all other obligations of such
Person for borrowed money (including obligations to repurchase receivables
and other assets sold with recourse);
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(b) All non-contingent obligations of such Person for the deferred
purchase price of property or services (including obligations under
letters of credit and other 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 and overdue;
(c) All obligations of such Person under conditional sale or other
title retention agreements with respect to property acquired by such
Person (to the extent of the value of such property if the rights and
remedies of the seller or lender under such agreement in the event of
default are limited solely to repossession or sale of such property),
including the interest and yield components of rent under Synthetic Leases
and, without duplication, the principal balance of Synthetic Leases;
(d) All obligations of such Person as lessee under or with respect
to Capitalized Lease Obligations; and
(e) any Guaranty Obligations of such Person in respect of
obligations described in clauses (a) through (d) above of another Person.
"Guarantee Default" shall mean an event, act, condition or occurrence
which with the giving of notice or the lapse of time (or both) would become a
Guarantee Event of Default.
"Guarantee Event of Default" shall mean any of the events specified in
Section 11.1; provided, however, that any requirement for the giving of notice,
the lapse of time, or both, or any other condition, has been satisfied.
"Guaranteed Obligations" means the collective reference to (a) all Rent,
including the Lease Balance, any Lease Supplement Balance, any Residual Value
Guarantee Amount, any other payments required to be made by Lessee upon any
purchase or sale of Equipment, any indemnity payments, any damages and any
reimbursements including, without limitation, Transaction Expenses, payable by
Lessee under each of the Participation Agreement (SanDisk Tranche), the Lease or
any other SanDisk Tranche Operative Documents to which Lessee is a party; (b)
Guarantor's obligations under each of the Specified Master Agreement Document
Provisions in those Master Agreement Documents to which it is a party.
Notwithstanding anything contained in this definition of "Guaranteed
Obligations," Guaranteed Obligations shall not include any obligation Lessee may
have to Lessor, Agent or any of the Participants under the SanDisk Tranche
Operative Documents which have actually been paid to Lessor or Agent by Lessee.
"Guaranteed Parties" means Lessor, Agent and the Participants and their
respective permitted successors and assigns, collectively.
"Guaranty Obligation" shall mean, with respect to any Person, any direct
or indirect liability of that Person with respect to any indebtedness, lease,
dividend, letter of credit or other obligation, including a Synthetic Lease (the
"primary obligations") of another Person (the "primary obligor"), including any
obligation of that Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligation or any property
constituting direct or indirect security therefor, or (b) to advance or provide
funds (i) for the payment or
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discharge of any such primary obligation, or (ii) 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. The amount of any Guaranty
Obligation shall be deemed equal to the stated or determinable amount of the
primary obligation in respect of which such Guaranty Obligation is made or, if
not stated or if indeterminable, the maximum reasonably anticipated liability in
respect thereof.
"Historical Financial Statements" means as of the Document Closing Date,
(i) the audited financial statements of Guarantor and its Subsidiaries as filed
with the SEC, for the immediately preceding three fiscal years (or, in the case
of balance sheets, for the preceding two fiscal years), consisting of balance
sheets and the related consolidated statements of income, stockholders' equity
and cash flows for such fiscal years, (ii) the unaudited financial statements of
Guarantor and its Subsidiaries as filed with the SEC as at the most recently
ended fiscal quarter, consisting of a balance sheet and the related consolidated
statements of income, stockholders' equity and cash flows for the three-, six-
or nine-month period, as applicable, ending on such date.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price (or a portion thereof) of property or services, including obligations
under Synthetic Leases (other than trade payables incurred in the ordinary
course of business of such Person), (ii) all indebtedness of such Person
evidenced by a note, bond, debenture or similar instrument, (iii) the principal
component of all Capitalized Lease Obligations of such Person and all
obligations of such Person under any other lease to the extent that the then
present value of the minimum rental commitment thereunder should, in accordance
with GAAP, be capitalized on a balance sheet of such Person, (iv) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all unreimbursed amounts drawn thereunder, (v) all
indebtedness of any other Person secured by any Lien on any property owned by
such Person, whether or not such indebtedness has been assumed, (vi) payment
obligations under any interest rate protection agreements (including without
limitation, any interest rate swaps, caps, floors, collars and similar
agreements) and currency swaps and similar agreements, and (vii) any Guaranty
Obligations of such Person.
"Investment" of any Person shall mean any loan or advance of funds by such
Person to any other Person (other than advances to employees of such Person for
moving and travel expenses, drawing accounts and similar expenditures in the
ordinary course of business), any purchase or other acquisition of any Equity
Securities or Indebtedness of any other Person, any capital contribution by such
Person to or any other investment by such Person in any other Person; provided,
however, that Investments shall not include (a) accounts receivable or other
indebtedness owned by customers of such Person which are current assets and
arose from sales of inventory in the ordinary course of such Person's business
or (b) prepaid expenses of such Person incurred and prepaid in the ordinary
course of business.
"Material Adverse Effect" means any change or changes, effect or effects,
or condition or conditions that individually or in the aggregate are or would
reasonably be expected to be
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materially adverse to (i) the business operations or financial condition of
Guarantor and its Subsidiaries on a consolidated basis, (ii) the Overall
Transaction, (iii) the ability of Guarantor to perform its obligations under the
SanDisk Tranche Operative Documents to which it is a party, or (iv) the validity
or enforceability of any of the SanDisk Tranche Operative Documents.
"Material Subsidiary" means any Subsidiary that would be a "significant
subsidiary" within the meaning of Rule 1-02 of the SEC's Regulation S-X.
"Permitted Liens" means the following Liens:
(a) Liens in favor of Lessor, Agent or any Participant under the
SanDisk Tranche Operative Documents;
(b) Liens for taxes, assessments or governmental charges or claims
not yet due or with respect to which the Guarantor or its Subsidiaries are
taking each of the actions required pursuant to Section 10(a)(iii) of this
Guarantee; and
(c) statutory Liens of landlords, banks (and rights of set-off), of
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and
other Liens imposed by law, in each case incurred in the ordinary course
of business (i) for amounts not yet overdue or (ii) for amounts that are
overdue and that are being contested in good faith by appropriate
proceedings, so long as such reserves or other appropriate provisions, if
any, as shall be required by GAAP shall have been made for any such
contested amounts;
(d) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or similar
proceedings have been commenced with respect thereto or on account
thereof;
(e) easements, rights-of-way, zoning restrictions, encroachments,
imperfections and other minor defects or irregularities in title, which,
individually or in the aggregate, are not substantial in amount and do not
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Guarantor or
any of its Subsidiaries;
(f) Liens on property or assets of any corporation which becomes a
Subsidiary of the Guarantor or on any property or assets acquired by the
Guarantor or any of its Subsidiaries after the Document Closing Date,
provided that (A) such Liens exist at the time the stock of said
corporation or assets or property is or are acquired by such Person and
(B) such Liens were not created in contemplation of such acquisition by
the Guarantor or such Subsidiary;
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(g) Liens incurred in connection with the purchase or shipping of
goods or assets on the related assets and proceeds thereof in favor of the
seller or shipper of such goods or assets;
(h) Liens on insurance proceeds in favor of insurance companies with
respect to the financing of insurance premiums;
(i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods in the ordinary course of Guarantor's and its
Subsidiaries' businesses;
(j) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(k) licenses of patents, trademarks and other intellectual property
rights granted by Guarantor or any of its Subsidiaries in the ordinary
course of business;
(l) judgment liens not constituting a Guarantee Event of Default;
(m) Liens described in Schedule 10(b)(ii) to this Guarantee and
existing on the Document Closing Date;
(n) Liens securing Indebtedness permitted pursuant to Section
10(b)(i)(H), 10(b)(i)(I) and 10(b)(i)(K) of this Guarantee; provided, in
the case of Indebtedness permitted by Section 10(b)(i)(I), any Lien
permitted hereby shall encumber only the asset acquired with the proceeds
of such Indebtedness and such Liens do not secure any other Indebtedness;
and
(o) other Liens securing Indebtedness permitted to be incurred and
secured hereunder, so long as such Liens do not attach to assets of
Guarantor or any of its Subsidiaries which in the aggregate exceed 5% of
Consolidated Assets; and
(p) any extension or replacement of any of the foregoing in
accordance with the terms thereof;
provided, (i) any Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Code or by ERISA, and (ii) any Lien relating to or imposed in connection with
any Environmental Claim, in each case is expressly prohibited hereunder.
"Purchase Money Indebtedness" means Indebtedness (i) that is secured by a
purchase money security interest pursuant to the UCC or (ii) Indebtedness
secured by another lien under Applicable Law, which Indebtedness was incurred by
the relevant debtor to finance the acquisition of the asset(s) to which such
Lien attaches, including any mortgage, deed of trust, Synthetic Lease or
Capitalized Lease Obligations.
"Quick Ratio" shall mean, with respect to Guarantor and its Subsidiaries
on a consolidated basis at the applicable date such ratio is to be determined,
the ratio of:
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(a) The sum (without duplication) of all unencumbered cash, Cash
Equivalents, short-term investments and net accounts receivable of
Guarantor and its Subsidiaries at such time;
to
(b) the current liabilities of Guarantor and its Subsidiaries at
such time (including current liabilities of Guarantor and its Subsidiaries
in connection with Synthetic Leases and including current liabilities of
any other Person to the extent Guarantor or any of its Subsidiaries is
liable in respect of any Guaranty Obligations of liabilities of such
Person).
(In calculating the Quick Ratio, Cash Equivalents and short-term investments
shall be marked to market quarterly).
"Rate Contracts" shall mean swap agreements (as that that term is defined
in Section 101 of the Bankruptcy Code) and any other agreements or arrangements
designed to provide protection against fluctuations in interest or currency
exchange rates.
"SanDisk Tranche Operative Documents" means the "Operative Documents" as
defined in Appendix 1 to the Participation Agreement (SanDisk Tranche).
"Subsidiary" shall mean, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"Surety Instruments" shall mean all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds, surety
bonds and similar instruments.
"Tangible Net Worth" shall mean, with respect to Guarantor and its
Subsidiaries on a consolidated basis at any time, the remainder at such time,
determined in accordance with GAAP, of (a) the total assets of Guarantor and its
Subsidiaries, minus (b) the sum (without limitation and without duplication of
deductions) of (i) the total liabilities of Guarantor and its Subsidiaries, (ii)
all reserves established by Guarantor and its Subsidiaries for anticipated
losses and expenses (to the extent not deducted in calculating total assets in
clause (a) above) and (iii) all intangible assets of Guarantor and its
Subsidiaries (to the extent included in calculating total assets in clause (a)
above), including, without limitation, goodwill (including any amounts, however
designated on the balance sheet, representing the cost of acquisition of
businesses and investments in excess of underlying tangible assets), trademarks,
trademark rights, trade name rights, copyrights, patents, patent rights,
licenses, unamortized debt discount, marketing expenses, organizational
expenses, non-compete agreements and deferred research and development.
"Wholly-Owned Domestic Subsidiary" means a Domestic Subsidiary of
Guarantor that is a Wholly-Owned Subsidiary.
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"Wholly-Owned Foreign Subsidiary" means a Foreign Subsidiary of Guarantor
that is a Wholly-Owned Subsidiary.
"Wholly-Owned Subsidiary" means a Subsidiary of Guarantor, at least 99% of
the capital stock of which (other than directors' qualifying shares) is owned by
Guarantor or another Wholly-Owned Subsidiary.
(b) Unless otherwise defined herein, terms defined in Appendix 1 to
the Participation Agreement and used herein shall have the respective meanings
set forth in Appendix 1 to the Participation Agreement, and the provisions
regarding interpretation of the SanDisk Tranche Operative Documents set forth in
paragraphs (A), (B), (C) and (D) of Appendix 1 to the Participation Agreement
(SanDisk Tranche) shall apply to this Guarantee.
Section 2. Guarantee.
(a) Guarantor hereby unconditionally and irrevocably guarantees to
the Guaranteed Parties the prompt payment and performance when due (but in each
case only after the expiration of all applicable grace, notice and cure periods
provided for in the SanDisk Tranche Operative Documents including with respect
to any applicable Event of Default) of the Guaranteed Obligations.
(b) Guarantor further agrees to pay any and all reasonable expenses
(including, without limitation, all reasonable fees and disbursements of
counsel) which may be paid or incurred by Agent or the Guaranteed Parties in
enforcing any rights with respect to, or collecting, any or all of the
Guaranteed Obligations and/or enforcing any rights with respect to, or
collecting against, Guarantor under this Guarantee.
Section 3. Intentionally Omitted.
Section 4. No Subrogation; Subordination. Notwithstanding any payment or
payments made by Guarantor hereunder or any setoff or application of funds of
Guarantor by any Guaranteed Party, Guarantor shall not be entitled to be
subrogated to any of the rights of any Guaranteed Party, as applicable, against
Lessor, Lessee, or any other Person or any collateral security or guarantee or
right of offset held by any Guaranteed Party for the payment of the Guaranteed
Obligations, nor shall Guarantor seek or be entitled to seek any contribution or
reimbursement from Lessor, Lessee, or any other Person in respect of payments
made by Guarantor hereunder, until all Guaranteed Obligations are paid in full
and such payments cannot be treated as a preferential transfer under the
Bankruptcy Code in the event a petition is filed by or against Lessee, as
debtor, under the Bankruptcy Code. If any amount shall be paid to Guarantor on
account of such subrogation rights at any time when all of the Guaranteed
Obligations shall not have been paid in full, such amount shall be held by
Guarantor in trust for the Guaranteed Parties, segregated from other funds of
Guarantor, and shall, forthwith upon receipt by Guarantor, be turned over to
Agent in the exact form received by Guarantor (duly indorsed by Guarantor to
Agent, if required), to be applied and credited against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms of the
SanDisk Tranche Operative Documents. If (a) Guarantor shall make payment to any
Guaranteed Party of all or any part of the Guaranteed Obligations and (b) all
the Guaranteed Obligations shall be paid
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in full, the Guaranteed Parties will, at Guarantor's request and expense,
execute and deliver to Guarantor appropriate documents (without recourse as set
forth in Section 14.14 of the Participation Agreement in the case of Lessor),
necessary to evidence the transfer by subrogation to Guarantor of an interest in
the Guaranteed Obligations resulting from such payment by Guarantor.
Notwithstanding the foregoing, to the extent that the Guaranteed Parties, as a
whole, receive any payments from Guarantor, Lessee, any other guarantor or any
other Person by virtue of any action or proceeding or any setoff or
appropriation or application at any time in reduction of or in payment of the
Guaranteed Obligations and such payments exceed the amount then due for the
Guaranteed Obligations, Guarantor shall be promptly reimbursed such excess
payments received by the Guaranteed Parties pro rata, with the other guarantors
contributing to such excess payment, and before any Guaranteed Party reimburses
Lessee or any other Person for its contribution resulting in a payment in excess
of the Guaranteed Obligations. Notwithstanding the provisions of Section 11.07
of the Operating Agreement, in the event of a dissolution and liquidation of
Lessee, Guarantor agrees that it shall not demand, collect, xxx for or otherwise
receive payment in respect of any Indebtedness owed by Lessee to Guarantor (or
any Subsidiary of Guarantor to whom the Membership Interest in Lessee may have
been transferred by Guarantor or any further transferee of such Subsidiary)
until the Guaranteed Obligations shall have been paid in full in accordance with
the terms hereof.
Section 5. Amendments, etc. with Respect to the Guaranteed Obligations;
Waiver of Rights. Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against Guarantor and without notice to
or further assent by Guarantor, any demand for payment of any of the Guaranteed
Obligations made by the Guaranteed Parties may be rescinded by such parties and
any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or
the liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Guaranteed
Parties, and the Participation Agreement and the other SanDisk Tranche Operative
Documents and any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, from
time to time in accordance with their respective terms, and any collateral
security, guarantee or right of offset at any time held by any Guaranteed Party
for the payment of the Guaranteed Obligations may be sold, exchanged, waived,
surrendered or released, provided that no modification or amendment of or
supplement to any of the SanDisk Tranche Operative Documents shall be effective
for purposes of this Guarantee unless entered into with the prior written
consent of Guarantor. No Guaranteed Party shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Guaranteed Obligations or for this Guarantee or any property subject thereto.
When making any demand hereunder against Guarantor, the Guaranteed Parties may,
but shall be under no obligation to (except as expressly required by the SanDisk
Tranche Operative Documents), make a similar demand on Lessee or any other
guarantor, and any failure by the Guaranteed Parties to make any such demand or
to collect any payments from Lessee or any such other guarantor or any release
of Lessee or such other guarantor shall not relieve Guarantor of its obligations
or liabilities hereunder, and shall not impair or affect the rights and
remedies, express or implied, or as a matter of law, of the Guaranteed Parties
against Guarantor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
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Section 6. Guarantee Absolute and Unconditional. Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the
Guaranteed Obligations and notice of or proof of reliance by any Guaranteed
Party upon this Guarantee or acceptance of this Guarantee; the Guaranteed
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guarantee; and all dealings between the Guaranteed Parties and
Guarantor likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Guarantee. Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon Guarantor with respect to the Guaranteed Obligations. Guarantor
understands and agrees that this Guarantee shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity, regularity or enforceability of the Lease or any other SanDisk Tranche
Operative Document, any of the Guaranteed Obligations or any other collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by any Guaranteed Party, (b) any defense, set-off
or counterclaim (other than a defense of payment or performance or affirmative
discharge, release or termination of this Guarantee by the Guaranteed Parties in
accordance with the terms hereof) which may at any time be available to or be
asserted by Guarantor or Lessee against any Guaranteed Party, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of Guarantor or
Lessee) which constitutes, or might be construed to constitute, an equitable or
legal discharge of Lessee for the Guaranteed Obligations, or of Guarantor under
this Guarantee, in bankruptcy or in any other instance. When pursuing its rights
and remedies hereunder against Guarantor, the Guaranteed Parties may, but shall
be under no obligation to, pursue such rights and remedies as they may have
against Lessee or any other Person or against any collateral security or
guarantee for the Guaranteed Obligations or any right of offset with respect
thereto, and any failure by the Guaranteed Parties to pursue such other rights
or remedies or to collect any payments from Lessee or any such other Person or
to realize upon any such collateral security or guarantee or to exercise any
such right of offset, or any release of Lessee or any such other Person or any
such collateral security, guarantee or right of offset, shall not relieve
Guarantor of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Guaranteed Parties against Guarantor. This Guarantee shall remain in full force
and effect and be binding in accordance with and to the extent of its terms upon
Guarantor and its successors and assigns, and shall inure to the benefit of each
Guaranteed Party, until all the Guaranteed Obligations shall have been satisfied
by payment in full, notwithstanding that from time to time during the term of
the Lease Lessee may be free from any obligations or liabilities thereunder or
under the other SanDisk Tranche Operative Documents. Guarantor expressly waives
any and all benefits under Sections 2787 to 2855 inclusive, and Sections 2899
and 3433, of the California Civil Code. Notwithstanding anything else in this
Guarantee, Guarantor shall not be required to pay more under this Guarantee in
respect of the Guaranteed Obligations than Lessee is required to pay pursuant to
the provisions of any of the other SanDisk Tranche Operative Documents as a
result and to the extent of the application of Section 11.3 of the Lease.
Section 7. Reinstatement. This Guarantee shall continue to be effective,
or be reinstated, as the case may be, if at any time any payment, or any part of
any payment, of any of the Guaranteed Obligations is rescinded or must otherwise
be restored or returned by any Guaranteed Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of
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Lessor (but only if such proceeds were returned to Guarantor or Lessee) or
Guarantor or Lessee, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, Lessor,
Guarantor or Lessee or any substantial part of their respective property, or
otherwise, all as though such payments had not been made.
Section 8. Payments. Guarantor hereby guarantees that payments hereunder
will be paid to Agent for the benefit of the applicable Guaranteed Parties,
without set-off or counterclaim in United States Dollars at the office of Agent
located at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; provided, however,
that, no such payment shall be deemed a waiver or release by Lessee or Guarantor
of any claim of Lessee or Guarantor which may be asserted against the applicable
Guaranteed Party or any other Person in a separate action or proceeding.
Section 9. Representations of Guarantor. Guarantor represents and warrants
to each of Lessor, Agent and each Participant as of the Document Closing Date
that:
(a) Organization; Existence. Guarantor and each of its Subsidiaries
(i) is a duly organized and validly existing corporation in good standing under
the laws of its jurisdiction of organization, (ii) has the requisite power and
authority to own its property and assets and to transact the business in which
it is engaged or presently proposes to engage, and (iii) has duly qualified and
is authorized to do business and is in good standing as a foreign corporation in
every jurisdiction (other than the jurisdiction of its organization) in which
the nature of its business requires it to be so qualified, except where the
failure to so qualify, individually or in the aggregate, may not reasonably be
expected to have a Material Adverse Effect.
(b) Power; Authorization; Enforceable Obligations. Guarantor has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of this Guarantee and the other SanDisk Tranche Operative Documents
to which it is or will be a party and has taken all necessary corporate action
(including without limitation any necessary consents of its shareholders) to
authorize the execution, delivery and performance by Guarantor of this Guarantee
and the other SanDisk Tranche Operative Documents. Guarantor has duly executed
and delivered this Guarantee, and this Guarantee and each other SanDisk Tranche
Operative Document to which it is a party constitutes (or upon the execution and
delivery thereof, will constitute), its legal, valid and binding obligation,
enforceable in accordance with its terms, except as enforcement thereof may be
subject to (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights generally
and (ii) general principles of equity regardless of whether such enforcement is
sought in a proceeding in equity or at law. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection with
(i) the execution, delivery and performance by Guarantor of this Guarantee or
the other SanDisk Tranche Operative Documents to which Guarantor is a party or
the consummation of any of the transactions contemplated hereby or thereby , or
(ii) the legality, validity, binding effect or enforceability of this Guarantee
or the other SanDisk Tranche Operative Documents to which Guarantor is a party,
except for such orders, consents, approvals, licenses, authorizations,
validations, filings, recordings or registrations contemplated by the SanDisk
Tranche Operative Documents, each of which has been obtained or made as of the
Document Closing Date.
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(c) No Violation. Neither the execution, delivery or performance by
Guarantor of this Guarantee and the other SanDisk Tranche Operative Documents to
which Guarantor is a party, nor compliance by it with the terms and provisions
thereof nor the consummation of the Overall Transaction, (i) will contravene any
Applicable Laws, (ii) will conflict with or contravene or result in any breach
of any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of Guarantor or
any of its Subsidiaries pursuant to the terms of, any indenture, mortgage, deed
of trust, material agreement or other material instrument (including without
limitation any of the Master Agreement Documents) to which Guarantor or any of
its Subsidiaries is a party or by which it or any of its property or assets is
bound, except Liens created under the SanDisk Tranche Operative Documents or
(iii) will violate any provision of the certificate of incorporation or bylaws
of Guarantor.
(d) Material Adverse Change. Since October 2, 2000, there has been
no material adverse change with respect to the financial condition of Guarantor
and its Subsidiaries taken as a whole.
(e) Litigation. Except as set forth in Guarantor's 10-Q filed
November 15, 2000 in the case of clause (ii) below, there are no actions, suits
or proceedings pending or, to the knowledge of Guarantor, threatened against
Guarantor or any of its Subsidiaries in any court or before any Governmental
Authority (nor shall any order, judgment or decree have been issued or proposed
to be issued by any Governmental Authority to set aside, restrain, enjoin or
prevent the full performance of any SanDisk Tranche Operative Document or any
Master Agreement Document or any transaction contemplated hereby or thereby)
that (i) question the validity or enforceability against Guarantor of any
SanDisk Tranche Operative Document or any transaction described in the SanDisk
Tranche Operative Documents or (ii) has had, or for which there is a reasonable
possibility of an adverse decision which would reasonably be expected to have, a
Material Adverse Effect.
(f) Intentionally Omitted.
(g) Financial Statements and Conditions. The factual statements as
set forth in the financial statements and other written information delivered to
Agent and Lessor prior to the Document Closing Date in connection with the
syndication of the Participation Interests (but excluding any financial
forecasts or projections) were true and accurate in all material respects as of
the date such statements were made or dated, as applicable. All financial
statements and other reports required to be delivered to Agent and Lessor
pursuant to Section 10(a)(iv) contemporaneously herewith or when delivered
pursuant to Section 10(a)(iv) will be true and accurate in all material respects
as of the date as of which such information is dated or certified.
(h) Governmental Regulations, Etc. Guarantor is not a "public
utility holding company" under the Public Utility Holding Company Act of 1935,
as amended, nor is it an "investment company" as defined in the Investment
Company Act of 1940.
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(i) Chief Executive Office of Guarantor. Guarantor's principal place
of business and chief executive office, as such terms are used in Section
9-103(3) of the UCC, are located at 000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000.
(j) Brokers, etc. It has not engaged or authorized any broker,
finder, investment bank or other third party to act on its behalf, directly or
indirectly, as a broker, finder, investment banker, agent or in any other like
capacity in connection with any of the SanDisk Tranche Operative Documents or
the Overall Transaction, other than ABN AMRO.
(k) Intentionally Omitted.
(l) Ownership of Property. Guarantor and each of its Material
Subsidiaries has good and marketable fee simple title to or valid leasehold
interests in all of the real property owned or leased by such person and good
title to all of its personal property, except where the failure to hold such
title or leasehold interests, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. The personal and real
property owned by Guarantor and each of its Material Subsidiaries is not subject
to any Lien except Permitted Liens. Guarantor and each of its Subsidiaries
enjoys peaceful and undisturbed possession under all of its leases except where
the failure to enjoy such peaceful and undisturbed possession would not
reasonably be expected to have a Material Adverse Effect.
(m) Compliance with Laws. It is not in violation of, or in default
with respect to, any Applicable Laws of any Governmental Authority where such
violation or default would reasonably be expected to have a Material Adverse
Effect.
(n) Intentionally Omitted.
(o) Appraisal Data. The information provided by Guarantor and its
Affiliates to the Appraiser described on Exhibit B to the Initial Appraisal was
true and correct in all material respects when provided.
(p) Licenses, Permits, Intellectual Property, etc. Guarantor and
each of its Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks and trade names
or rights thereto, that individually or in the aggregate, are material, without
known conflict with the rights of others, the failure of which to so own or
possess would reasonably be expected to have a Material Adverse Effect. To the
knowledge of Guarantor, no product of Guarantor or any of its Subsidiaries
infringes in any material respect on any license, permit, franchise,
authorization, patent, copyright, service xxxx, trademark, trade name or other
right owned by any other Person, which infringement would reasonably be expected
to have a Material Adverse Effect.
(q) Payment of Taxes. All federal, state, local and foreign tax
returns and reports of Guarantor and its subsidiaries required to be filed by it
have been timely filed where the failure to file would have a Material Adverse
Effect, and all taxes shown on such tax returns to be due and payable and all
assessments, fees and other governmental charges upon Guarantor and its
Subsidiaries and upon their respective properties, assets, income, businesses
and franchises which are due and payable have been paid when due and payable,
other than amounts
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not yet delinquent or those being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP have been
made. Guarantor knows of no proposed tax assessment against Guarantor or any of
its Subsidiaries which is not being actively contested by Guarantor or such
Subsidiary in good faith and by appropriate proceedings and which would
reasonably be expected to have Material Adverse Effect; provided, such reserves
or other appropriate provisions, if any, as shall be required in conformity with
GAAP shall have been made or provided therefor.
(r) Intentionally Omitted.
(s) Disclosure. The representations or warranties of Guarantor and
its Subsidiaries contained in this Guarantee and in any other document,
certificate or written statement furnished to Lessor, Agent and/or the
Participants by or on behalf of Guarantor and its Subsidiaries pursuant to the
SanDisk Tranche Operative Documents for use in connection with the transactions
contemplated by the SanDisk Tranche Operative Documents, when taken as a whole,
do not contain any untrue statement of a material fact or omit to state a
material necessary in order to make the statements contained herein or therein
not misleading in light of the circumstances in which the same were made.
(t) Solvency. Guarantor is solvent and has assets having a present
fair saleable value at least equal to the amount of its liabilities.
(u) Subsidiaries. As of the Document Closing Date, Guarantor has no
Subsidiaries except as set forth on Schedule 9(u) hereto and has no Material
Subsidiaries other than those identified as Material Subsidiaries on Schedule
9(u) hereto.
(v) Employee Benefit Plans.
(i) Neither Guarantor nor any ERISA Affiliate maintains or
contributes to, or has ever maintained a Pension Plan. Neither Guarantor
nor any ERISA Affiliate has any liability with respect to any
post-retirement benefit under any Employee Benefit Plan which is a welfare
plan (as defined in Section 3(1) of ERISA), other than liability for
health plan continuation coverage described in Part 6 of Title I(B) of
ERISA, which liability for health plan coverage is not reasonably likely
to have a Material Adverse Effect.
(ii) Each Employee Benefit Plan complies, in both form and
operation, in all material respects, with its terms, ERISA and the Code,
and no condition exists or event has occurred with respect to any such
plan which would result in the incurrence by either Guarantor or any ERISA
Affiliate of any material liability, fine or penalty. Each Employee
Benefit Plan, related trust agreement, arrangement and commitment of
Guarantor or any ERISA Affiliate is legally valid and binding and in full
force and effect in all material respects. No Employee Benefit Plan is
being audited or investigated by any governmental authority or is subject
to any pending or, to the best knowledge of Guarantor, threatened, claim
or suit. To the best of Guarantor's knowledge, neither Guarantor nor any
ERISA Affiliate nor any fiduciary of any Employee Benefit Plan has engaged
in a prohibited transaction with respect to an Employee Benefit Plan under
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Section 406 of ERISA or section 4975 of the Code, other than a
transaction that is exempt under a statutory or administrative exemption.
To the best of Guarantor's knowledge, no breach of fiduciary
responsibility has occurred with respect to any Employee Benefit Plan
under Section 404 of ERISA or Section 4975 of the Code.
(iii) Neither Guarantor nor any ERISA Affiliate contributes to
or has ever contributed to any Multiemployer Plan.
(iv) If Guarantor or any ERISA Affiliate on or after the date
of this Guarantee: (1) maintains or contributes to a Pension Plan; (2)
contributes or has any material contingent obligations to any
Multiemployer Plan; or (3) incurs a liability with respect to any
post-retirement benefit under any Employee Benefit Plan which is a welfare
plan (as defined in Section 3(1) of ERISA), other than liability for
health plan continuation coverage described in Part 6 of Title I(B) of
ERISA, which liability for health plan coverage is not reasonably likely
to have a Material Adverse Effect, then Guarantor shall promptly provide a
written notice thereof and a statement affirming that no Material Adverse
Effect could reasonably be expected to occur as a result thereof.
Section 10. Covenants of Guarantor.
(a) Affirmative Covenants. Guarantor hereby agrees that, so long as
this Guarantee is in effect, Guarantor shall and (except in the case of delivery
of financial information, reports, and notices) shall cause each of its
Subsidiaries to perform each of the following covenants:
(i) General Business Operations. Each of Guarantor and its
Material Subsidiaries shall preserve and maintain its corporate existence
and all of its rights, privileges and franchises reasonably necessary to
the conduct of its business; provided, however, that Guarantor and its
Subsidiaries may dissolve, liquidate or cause or permit the reorganization
or merger of any of its Subsidiaries other than Lessee if such
dissolution, liquidation or other action is not reasonably likely to have
a Material Adverse Effect or otherwise relates to a Subsidiary which is
not at such time a Material Subsidiary; and provided further that the
foregoing shall not be construed so as to prohibit a transaction expressly
permitted under Section 10(b)(v)(A) or 10(b)(v)(B).
(ii) Maintenance of Properties. Guarantor will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in all
material respects in good repair, working order and condition, ordinary
wear and tear excepted, all property useful and necessary in the business
of Guarantor and its Subsidiaries unless the failure to so maintain would
not reasonably be expected to give rise to a Material Adverse Effect.
(iii) Payment of Taxes and Claims. Guarantor will, and will
cause each of its Subsidiaries to, pay and discharge (a) all taxes,
assessments and governmental charges or levies imposed upon it, or upon
its income or profits, or upon any of its properties, before they shall
become delinquent, and (b) all lawful claims (including claims for labor,
materials and supplies) which if unpaid might give rise to a Lien upon any
of its properties (other than Permitted Liens); provided, neither
Guarantor nor any of
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its Subsidiaries shall be required to pay any such tax assessment, charge,
levy or claim which is being contested in good faith by appropriate
proceedings and for which adequate reserves therefor have been established
in accordance with GAAP. Guarantor will not, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income
tax return with any Person (other than Guarantor or any of its
Subsidiaries).
(iv) Financial Statements and Other Reports. Guarantor will
deliver or cause to be delivered to Agent (with sufficient copies for each
of the Participants) and to Lessor:
(A) as soon as available and in any event within ninety
(90) days after the end of each fiscal year of Guarantor, an audited
statement of financial position of Guarantor and its consolidated
Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income, shareholder's equity and cash
flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all
accompanied by the unqualified opinion of Ernst & Young L.L.P. or
other independent public accountants of nationally recognized
standing stating that such consolidated financial statements present
fairly the financial position of Guarantor and its consolidated
Subsidiaries for the periods indicated, in conformity with GAAP, and
applied on a basis consistent with prior years; together with an
unaudited Responsible Officer's Certificate containing a computation
of, and showing compliance with, each of the financial ratios and
restrictions contained in Section 10(c) and to the effect that the
Responsible Officer executing such certificate is not aware of any
Guarantee Event of Default that has occurred and is continuing, or
if such officer is aware of any such Guarantee Event of Default,
describing it and the steps, if any, being taken to cure it;
(B) as soon as available and in any event within
forty-five (45) days after the end of each of the first three
quarters of each fiscal year of Guarantor, a consolidated statement
of financial position of Guarantor as of the end of such quarter and
the related consolidated statements of income and cash flows for
such quarter and for the portion of Guarantor's fiscal year ended at
the end of such quarter, together with an unaudited Responsible
Officer's Certificate containing a computation of, and showing
compliance with, each of the financial ratios and restrictions
contained in Section 10(c) and that no Guarantee Event of Default
has occurred or is continuing or, if any Guarantee Event of Default
has occurred and is continuing, describing it and the steps, if any,
being taken to cure it;
(C) if, as a result of any change in accounting
principles and policies from those used in the preparation of the
Historical Financial Statements, the consolidated financial
statements of Guarantor and its Subsidiaries delivered pursuant to
Sections 10(a)(iv)(A) or 10(a)(iv)(B) will differ in any material
respect from the consolidated financial statements that would have
been delivered pursuant to such Sections had no such change in
accounting principles and
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policies been made, then together with the first delivery of such
financial statements after such change a statement of reconciliation
for all such prior financial statements in form and substance
satisfactory to the Required Participants;
(D) promptly upon transmission or receipt thereof,
copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy statements,
notices and reports as Guarantor or any of its Subsidiaries shall
send to a holder of any Indebtedness having a principal amount in
excess of $15,000,000 or more owed by Guarantor or such Subsidiary
in its capacity as such a holder, subject to any applicable
confidentiality obligations of Guarantor or such Subsidiary;
(E) promptly upon any Responsible Officer of Guarantor
obtaining knowledge (i) of the occurrence and continuance of any
condition or event that constitutes a Guarantee Default or a
Guarantee Event of Default; or (ii) of the occurrence of any event
or change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, Guarantor will provide written
notice thereof. In addition, concurrently with such written notice
by Guarantor, or promptly following Guarantor's receipt of notice
from Agent, Lessor or any Participant that a Guarantee Default or a
Guarantee Event of Default has occurred, Guarantor shall deliver a
certificate of a Responsible Officer specifying the nature and
period of existence of such condition, event or change, or
specifying the notice given or action taken by Guarantor and the
nature of such claimed Guarantee Event of Default, Guarantee
Default, event or condition, and what action Guarantor has taken, is
taking or proposes to take with respect thereto;
(F) promptly upon any Responsible Officer of Guarantor
obtaining knowledge thereof, Guarantor will give written notice to
Agent of the institution of any Adverse Proceeding not previously
disclosed in writing by Guarantor to Lessor, Agent and the
Participants and which (i) individually or in the aggregate if
adversely determined would reasonably be expected to have a Material
Adverse Effect, or (ii) prohibits Guarantor from performing any
material obligation under the SanDisk Tranche Operative Documents to
which it is a party;
(G) (i) promptly upon becoming aware of the occurrence
of any ERISA Event, a written notice specifying the nature thereof,
what action Guarantor, any of its Subsidiaries or any of their
respective ERISA Affiliates has taken, is taking or proposes to take
with respect thereto and, when known, any action taken or threatened
by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto; and (ii) upon request of Agent and with
reasonable promptness, copies of such other documents or
governmental reports or filings relating to any Employee Benefit
Plan as Agent shall reasonably request;
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(H) promptly, written notice of any change in either
Xxxxx'x or S&P's rating for Guarantor's long term Indebtedness, if
applicable; and
(I) Guarantor and its Material Subsidiaries shall at all
times in all material respects keep proper books of record and
account in which full, true and correct entries will be made of
their transactions in accordance with GAAP;
(J) from time to time with reasonable promptness, such
other information or documents (financial or otherwise) with respect
to Guarantor and its Subsidiaries, or with respect to the status of
any matter disclosed pursuant to Section 10(a)(iv)(F), as Agent,
Lessor or any Participant through Agent may reasonably request,
subject to any applicable confidentiality obligations of Guarantor
and provided that in the case of information pertaining to a matter
disclosed pursuant to Section 10(a)(iv)(F), Guarantor shall not be
required to disclose any such information if such disclosure would,
in the reasonable judgment of Guarantor, constitute a waiver by
Guarantor of its attorney-client privilege or any applicable work
product privilege with respect to such matter.
(K) notwithstanding the foregoing, the requirement for
delivery of financial statements under Section 10(a)(iv) may be
satisfied by delivery of a copy of Forms 10-K or 10-Q as the case
may be as filed by Guarantor with the SEC for the most recent fiscal
year or fiscal quarter then ended. Guarantor may remit its financial
statements via electronic format through delivery by e-mail or
otherwise;
(L) in the event (i) Guarantor acquires or creates any
Subsidiary after the Document Closing Date which is a Material
Subsidiary, or (ii) any current Subsidiary (which is not a Material
Subsidiary as of the Document Closing Date) becomes a Material
Subsidiary after such date, or (iii) any Material Subsidiary
identified on the Document Closing Date ceases to be a Material
Subsidiary, Guarantor shall provide written notice thereof to Agent
as promptly as practicable; and
[*]
(v) Inspection Rights. Guarantor will, and will cause each of
its Subsidiaries to, permit any authorized representatives designated by
Lessor, Agent or any Participant to visit and inspect its and their
financial and accounting records (to the extent reasonably requested by
Lessor, Agent or any Participant), and to discuss its and their affairs,
finances and accounts with its and their Responsible Officers (provided,
Guarantor may, if it so chooses, be present at or participate in any such
discussion), all upon reasonable prior written notice to the chief
financial officer, treasurer or the vice president of finance of
Guarantor, at such reasonable times during normal business hours and as
often as may reasonably be requested; provided, the Participants shall use
their reasonable efforts to coordinate with Lessor and Agent in order to
minimize the number of such inspections and discussions, and provided
further that, absent the occurrence and continuance of a Guarantee Event
of Default, such inspections shall not be conducted
[*] INDICATES THAT CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24B-2. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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more frequently than once per fiscal year. Guarantor will, upon the
request of Lessor, Agent or the Required Participants, participate in a
meeting of Lessor, Agent and the Participants once during each fiscal year
to be held at Guarantor's corporate offices (or at such other location as
may be agreed to by Guarantor and Agent) at such time as may be agreed to
by Guarantor and Agent.
(vi) Intentionally Omitted.
(vii) Compliance with Laws. Guarantor will comply, and shall
cause each of its Subsidiaries to comply, with the requirements of all
Applicable Laws noncompliance with which would reasonably be expected to
have a Material Adverse Effect.
(b) Negative Covenants. Guarantor hereby agrees that, so long as
this Guarantee remains in effect or any amount is owing to any Participant,
Lessor or Agent hereunder or under any other SanDisk Tranche Operative Document,
Guarantor shall, and shall cause each of its Subsidiaries to, comply with each
of the following covenants:
(i) Indebtedness. Guarantor shall not nor shall it permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly liable with
respect to any Indebtedness, except:
(A) Indebtedness of Guarantor and its Subsidiaries
arising from the endorsement of instruments for collection in the
ordinary course of Guarantor's or a Subsidiary's business;
(B) Indebtedness of Guarantor and its Subsidiaries for
accounts payable and trade payables, provided that such accounts
arise in the ordinary course of business;
(C) Indebtedness owed to any Person providing worker's
compensation, health, disability or other employee benefits or
property, casualty or liability insurance to Guarantor or any
Subsidiary thereof, or which may be deemed to exist pursuant to
reimbursement or indemnification obligations to such Person;
(D) Indebtedness of Guarantor and its Subsidiaries with
respect to performance, surety, statutory, appeal or similar
obligations incurred in the ordinary course of business;
(E) Indebtedness in respect of netting services,
overdraft protections and otherwise in connection with Deposit
Accounts;
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(F) guaranties by Guarantor of Indebtedness of its
Subsidiaries or guaranties by a Subsidiary of Guarantor of
Indebtedness of Guarantor or another Subsidiary with respect, in
each case, to Indebtedness otherwise permitted to be incurred
pursuant to this Section 10(b)(i);
(G) Indebtedness described in Schedule 10(b)(i), but not
any extensions, renewals or replacements of such Indebtedness except
(i) renewals and extensions expressly provided for in the agreements
evidencing any such Indebtedness as the same are in effect on the
date of this Agreement and (ii) refinancings and extensions of any
such Indebtedness if the terms thereof are no less favorable to the
obligor thereon or to the Participants, but giving effect to
then-current market conditions, than the Indebtedness being
refinanced or extended; provided, such Indebtedness permitted under
clause (i) or clause (ii) above shall not be (1) Indebtedness of an
obligor that was not an obligor with respect to the Indebtedness
being extended, renewed or refinanced, (2) in a principal amount
which exceeds the Indebtedness being renewed, extended or refinanced
or (3) incurred, created or assumed if any Guarantee Default or
Guarantee Event of Default has occurred and is continuing or would
result therefrom;
(H) Indebtedness with respect to Capitalized Leases in
an aggregate amount not to exceed $10,000,000 at any time with
respect to Guarantor and all of its Subsidiaries in the aggregate;
(I) Purchase Money Indebtedness (including without
duplication Guaranty Obligations of Guarantor or any of its
Subsidiaries in respect of Purchase Money Indebtedness of another
Person) in an aggregate amount not to exceed at any time
$150,000,000 with respect to Guarantor and all of its Subsidiaries
in the aggregate; provided, any such Indebtedness (i) shall be
recourse only to the asset acquired in connection with the
incurrence of such Indebtedness, (ii) such Indebtedness is incurred
by such Person at the time of, or not later than thirty (30) days
after, the acquisition by such Person of the property so financed,
(iii) such Indebtedness (or Guaranty Obligations in respect thereof)
does not exceed the purchase price of the property so financed, and
(iv) no Guarantee Default or Guarantee Event of Default has occurred
and is continuing at the time the Indebtedness (or Guaranty
Obligations in respect thereof) is incurred or will occur after
giving effect to such Indebtedness (or such Guaranty Obligations),
provided that the conditions set forth in clauses (i), (ii) and
(iii) of this Section 10(b)(i)(I) shall not applicable in the case
of a Synthetic Lease or a Capitalized Lease;
(J) Guaranty Obligations of Guarantor to Lessor, Agent
and Participants under the SanDisk Tranche Operative Documents;
(K) other Indebtedness of Guarantor and its
Subsidiaries, provided that the aggregate principal amount of all
such other Indebtedness does not exceed $15,000,000 at any time;
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(L) other unsecured Indebtedness of Guarantor and its
Subsidiaries, provided that the aggregate principal amount of all
such other Indebtedness does not exceed (i) $200,000,000 at any time
during Guarantor's 2001 fiscal year, (ii) $300,000,000 at any time
during Guarantor's 2002 fiscal year, (iii) $375,000,000 at any time
during Guarantor's 2003 fiscal year, or (iv) $450,000,000 at any
time during Guarantor's 2004 fiscal year or any fiscal year
thereafter, and provided further that at the time any such
Indebtedness is incurred and after giving effect thereto, Guarantor
shall be in compliance with each of the covenants set forth in
Sections 10(c)(i) and 10(c)(iii); and
(M) Indebtedness of Guarantor and its Subsidiaries in
interest rate protection agreements and currency swaps solely for
the purpose of bona fide xxxxxx against existing business risk.
(ii) Liens. Guarantor shall not, nor shall it permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of
any kind of Guarantor or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit
the filing of, or permit to remain in effect, any financing statement or
other similar notice of any Lien with respect to any such property, asset,
income or profits under the UCC of any state or under any similar
recording or notice statute, except Permitted Liens. Without limitation of
the foregoing, in no event shall Guarantor create, permit or suffer to
exist or cause or permit any of its Subsidiaries to create, permit or
suffer to exist, any Lien upon any of their respective rights and
interests under the Master Agreement Documents to which they are a party
or upon any of the Membership Interests of Lessee. Guarantor or a
Subsidiary thereof shall at all times own at least 49.9% of the Membership
Interests of Lessee.
(iii) Dividends, Redemptions, Etc. Neither Guarantor nor any
of its Subsidiaries shall pay any dividends or make any distributions on
its Equity Securities; purchase, redeem, retire, defease or otherwise
acquire for value any of its Equity Securities; return any capital to any
holder of its Equity Securities as such; make any distributions of assets,
Equity Securities, obligations or securities to any holder of its Equity
Securities as such; or set apart any sum for any such purpose; except as
follows:
(A) either Guarantor or any of its Subsidiaries may pay
dividends on its capital stock payable solely in such Person's own
capital stock;
(B) any Subsidiary of Guarantor may pay dividends to
Guarantor or to such Subsidiary's direct parent;
(C) Guarantor may purchase shares of its capital stock
for its employee stock option plans and employee stock purchase
plans, provided that (A) the aggregate amount of such purchases does
not exceed $50,000,000 in any fiscal year of Guarantor, and (B) no
Default has occurred and is continuing at the time of such purchase
or will occur after giving effect to such purchase;
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(D) Guarantor may purchase shares of its capital stock
with the proceeds received by it from a substantially concurrent
issue of new shares of its capital stock;
(E) Guarantor may otherwise purchase shares of its
capital stock provided that the aggregate amount of such purchases
does not exceed $100,000,000 and so long as at the time any such
purchase is consummated and after giving effect thereto, Tangible
Net Worth is not less than the amount then required pursuant to
Section 10(c)(iv); and
(F) Guarantor may pay cash dividends on its capital
stock at any time after Guarantor's 2001 fiscal year, provided the
aggregate amount of such cash dividends shall not exceed $10,000,000
in any fiscal year of Guarantor.
(iv) Investments. Neither Guarantor nor any of its
Subsidiaries shall directly or indirectly make any Investment except for
Investments in the following:
(A) Investments of Guarantor and its Subsidiaries in
Cash Equivalents and in short-term securities rated AA or higher;
(B) Any transaction permitted by Section 10(b)(i);
(C) Money market mutual funds registered with the SEC,
meeting the requirements of Rule 2a-7 promulgated under the
Investment Company Act of 1940;
(D) Investments listed on Schedule 10(b)(iv)(D) existing
on the date of this Guarantee;
(E) Other Investments in Persons principally involved in
the semiconductor business or other related businesses in an
aggregate amount not to exceed, together with any acquisitions made
pursuant to Section 10(b)(v)(I)(i), at any time more than [*] of
Guarantor's Tangible Net Worth as of the date of any such
Investment; and
(F) Guarantor may make Investments in, a business or
businesses complimentary to the semiconductor business, so long as
any such acquisition or Investment is made solely with the proceeds
received by Guarantor from a substantially concurrent issue of new
shares of its capital stock.
(v) Fundamental Changes; Disposition of Assets. Guarantor
shall not, and shall not permit any of its Subsidiaries to, alter the
corporate, capital or legal structure of Guarantor or any of its
Subsidiaries if any such alteration could reasonably be expected to have a
Material Adverse Effect, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as
lessor or sublessor), transfer or otherwise dispose of, in one transaction
or a series of transactions, all or any part of its
[*] INDICATES THAT CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24B-2. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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business, property or assets, whether now owned or hereafter acquired, or
acquire by purchase or otherwise all or substantially all the business,
property or fixed assets of, or stock or other evidence of beneficial
ownership of, any Person or any division or line of business of any
Person, except:
(A) Any Domestic Subsidiary of Guarantor (other than
Lessee) may be merged with or into Guarantor or any Wholly-Owned
Domestic Subsidiary (other than Lessee), or be liquidated, wound up
or dissolved, or all or any part of its business, property or assets
may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to Guarantor or any
Wholly-Owned Domestic Subsidiary (other than Lessee); provided, in
the case of such a merger, Guarantor or such Wholly-Owned Domestic
Subsidiary shall be the continuing or surviving Person; and provided
further that in the case of any such transaction involving
Guarantor, the surviving Person (if not Guarantor) shall have agreed
in writing to assume all of the obligations and liabilities of
Guarantor under the SanDisk Tranche Operative Documents.
(B) Any Foreign Subsidiary of Guarantor may be merged
with or into Guarantor or any Wholly-Owned Foreign Subsidiary, or be
liquidated, wound up or dissolved, or all or any part of its
business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series
of transactions, to Guarantor or any Wholly-Owned Foreign
Subsidiary; provided, in the case of such a merger, Guarantor or
such Wholly-Owned Foreign Subsidiary shall be the continuing or
surviving corporation;
(C) Sales or other dispositions of Investments permitted
by Section 10(b)(iv) for not less than fair value;
(D) Sales of inventory by Guarantor and its Subsidiaries
in the ordinary course of their businesses;
(E) Sales or other dispositions of surplus, damaged,
worn or obsolete equipment or inventory for not less than fair
market value or otherwise in the ordinary course of business;
(F) Sales or assignments of defaulted receivables to a
collection agency in the ordinary course of business;
(G) Licenses to other Persons of intellectual property
by Guarantor or any Subsidiary thereof in the ordinary course of
business provided that, in each case, the terms of the transaction
are terms which then would prevail in the market for similar
transactions between unaffiliated parties dealing at arm's length;
(H) Sales or other dispositions of assets and property
by Guarantor to any of Guarantor's Subsidiaries (other than Lessee
except in
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accordance with the Master Agreement Documents) or by any of
Guarantor's Subsidiaries (other than Lessee) to Guarantor or any of
its other Subsidiaries (other than Lessee except in accordance with
the Master Agreement Documents), provided that the terms of any such
sales or other dispositions by or to Guarantor are terms which are
no less favorable to Guarantor than would prevail in the market for
similar transactions between unaffiliated parties dealing at arm's
length;
(I) Acquisitions of the business, property or fixed
assets of any Person engaged in the semiconductor business or other
related businesses in an aggregate amount not to exceed, together
with any Investments made pursuant to Section 10(b)(iv)(E), at any
time more than twenty-five percent (25%) of Guarantor's Tangible Net
Worth as of the date of any such acquisition; (ii) acquisitions of
all or substantially all of the business, property or fixed assets
of any Person engaged in the semiconductor business or other related
businesses, so long as such acquisition is made with the proceeds
received by Guarantor from a substantially concurrent issue of new
shares of its capital stock, and (iii) transactions otherwise
permitted under Section 10(b)(iv);
(J) Sales of accounts receivable of Guarantor and its
Subsidiaries (other than Lessee), provided that (A) each such sale
is (1) for not less than fair market value and (2) for cash, and (B)
the aggregate book value of all such accounts receivable so sold in
any consecutive four quarter period does not exceed ten percent
(10%) of the consolidated total accounts receivable of Guarantor and
its Subsidiaries on the last day immediately preceding such four
quarter period;
(K) Other sales, leases, transfers and disposal of
assets and property (other than sales by Lessee) for not less than
fair market value, provided that the aggregate book value of all
such assets and property so sold, leased, transferred or otherwise
disposed of in any consecutive four quarter period does not exceed
ten percent (10%) of the Consolidated Assets of Guarantor and its
Subsidiaries on the last day immediately preceding such four quarter
period.
(L) Guarantor or any Subsidiary may merge with or into
any Person (other than Lessee) so long as (1) Guarantor is the
survivor of any such transaction to which Guarantor is a party, or
such Subsidiary or Guarantor is the survivor of any such transaction
to which such Subsidiary is a party, as the case may be, and (2) at
the time of such transaction and after giving effect thereto, no
Guarantee Default or Guarantee Event of Default (including without
limitation a Change of Control) shall have occurred and be
continuing.
(vi) Accounting Changes. Neither Guarantor nor any of its
Material Subsidiaries shall change (i) its fiscal year (currently) or (ii)
its accounting practices except in accordance with GAAP.
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(vii) Change in Business. Neither Guarantor nor any of its
Subsidiaries shall engage, either directly or indirectly through
Affiliates thereof, in any material line of business other than the
business conducted by such Persons as of the Document Closing Date and
other businesses incidental or reasonably related thereto and other than
other businesses which would not reasonably be expected to have a Material
Adverse Effect.
(viii) ERISA. Neither Guarantor nor any ERISA Affiliate shall
(i) adopt or institute any Pension Plan, (ii) take any action which will
result in the partial or complete withdrawal, within the meanings of
Section 4203 and 4205 of ERISA, from a Multiemployer Plan to which
Guarantor or an ERISA Affiliate contributes, (iii) engage or permit any
Person to engage in any transaction prohibited by Section 406 of ERISA or
Section 4975 of the Code involving any Employee Benefit Plan or
Multiemployer Plan to which Guarantor or an ERISA Affiliate contributes
which would subject either Guarantor or any ERISA Affiliate to any tax,
penalty or other liability including a liability to indemnify, (iv) incur
or allow to exist any accumulated funding deficiency (within the meaning
of Section 412 of the Code or Section 302 of ERISA), (v) fail to make full
payment when due of all amounts due as contributions to any Employee
Benefit Plan or Multiemployer Plan to which Guarantor or an ERISA
Affiliate contributes, (vi) fail to comply with the requirements of
Section 4980B of the Code or Part 6 of Title I(B) of ERISA, or (vii) adopt
any amendment to any Employee Benefit Plan which would require the posting
of security pursuant to Section 401(a)(29) of the Code, which, in the case
of clauses (i) through (vii) above, singly or cumulatively, could
reasonably be expected to have a Material Adverse Effect.
(ix) Amendments to Master Agreement Documents. Guarantor shall
not cause or permit any of the Master Agreement Documents to which it is a
party to be amended, restated, supplemented or otherwise modified in a
manner which would constitute a breach of Section 8.1(s) of the
Participation Agreement (SanDisk Tranche).
(c) Guarantor's Financial Covenants. So long as this Guarantee
remains in effect:
(i) Leverage Ratio. Guarantor shall not permit its Leverage
Ratio to be greater than 2.75 to 1.00 as of the last day of any fiscal
quarter for the four fiscal quarter period then ended.
(ii) Quick Ratio. Guarantor shall not permit its Quick Ratio
as of the last day of any fiscal quarter to be less than 1.50 to 1.00.
(iii) Fixed Charge Coverage Ratio. Guarantor shall not permit
its Fixed Charge Coverage Ratio as of the last day of any fiscal quarter
for the four fiscal quarter period then ended to be less than 2.25 to
1.00.
(iv) Tangible Net Worth. Guarantor shall not permit its
Tangible Net Worth on the last day of any fiscal quarter (such date to be
referred to herein as a "determination date") to be less than the sum on
such determination date of the following:
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(A) ninety percent (90%) of the Tangible Net Worth as of
September 30, 2000 (the "base date");
plus
(B) fifty percent (50%) of the sum of Guarantor's
consolidated quarterly net income determined without deduction of
any quarterly losses for each fiscal quarter after the base date
through and including the fiscal quarter ending on the determination
date;
plus
(C) seventy-five percent (75%) of the net proceeds of
all Equity Securities issued by Guarantor and its Subsidiaries (to
Persons other than Guarantor or its Subsidiaries) during the period
commencing on the base date and ending on the determination date.
Section 11. Guarantee Events of Default; Remedies.
11.1 Guarantee Events of Default. Each of the following events shall
constitute a Guarantee Event of Default (whether any such event shall be
voluntary or involuntary or come about or be effected by operation of law or
pursuant to or in compliance with any judgment, decree or order of any court or
any order, rule or regulation of any governmental authority) and each such
Guarantee Event of Default shall continue so long as, but only as long as, it
shall not have been remedied or waived:
(a) Guarantor shall default in the payment when due of any amount
owing hereunder; or
(b) Any representation or warranty of Guarantor contained in this
Guarantee or in any certificate, report, financial statement or in other
document required to be furnished or delivered pursuant to any SanDisk Tranche
Operative Documents by Guarantor or on Guarantor's behalf to any Participant or
Agent or Lessor is false or misleading in any material respect when made or
reaffirmed, as the case may be and, if capable of being cured, remains uncured
for thirty (30) days after the earlier of (i) receipt by Guarantor of notice
thereof and (ii) a Responsible Officer of Guarantor obtaining knowledge thereof;
or
(c) Guarantor or any of its Subsidiaries shall default in the
performance or observance of any term, covenant, condition or agreement on its
part to be performed or observed under Sections 10(a)(i), 10(b)(v)(A),
10(b)(v)(B), 10(b)(v)(L) or 10(c) hereof; or
(d) Guarantor or any of its Subsidiaries shall default in any
material respect in the performance or observance of (i) any term, covenant,
condition or agreement on its part to be performed or observed under Sections
10(b)(i), 10(b)(ii), 10(b)(iii), 10(b)(iv), 10(b)(v) (other than clauses (A),
(B) and (L) of Section 10(b)(v), to which Section 11.1(c) above is applicable)
or 10(b)(vii) hereof or (ii) any other term, covenant, condition or agreement on
its part to be performed or observed hereunder or under any other SanDisk
Tranche Operative Document to
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which it is a party (and not constituting a Guarantee Event of Default under any
other clause of this Section 11.1), and such default, in the case of either
clause (i) or clause (ii) above, if capable of being remedied, shall continue
unremedied for a period of thirty (30) days after the earlier to occur of (x)
written notice thereof by Agent or Lessor to Guarantor or (y) a Responsible
Officer of Guarantor obtaining knowledge thereof (provided that, upon notice
from Guarantor to Agent, if such failure referred to in clause (ii) of this
Section 11.1(d) is not reasonably capable of being cured during such 30-day
period, such period shall be extended for a total period of 180 days so long as
(i) such failure is subject to cure during such 180-day period and (ii)
Guarantor is diligently and continuously proceeding to cure or cause to be cured
such failure); or
(e) Guarantor or any of its Subsidiaries shall default in the
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) of any amount owing in respect of any
Indebtedness (other than Indebtedness referred to in Section 11.1(a)) in the
principal amount of $15,000,000 or more; or (ii) Guarantor or any of its
Subsidiaries shall default in the performance or observance of any obligation or
condition with respect to any Indebtedness (other than Indebtedness referred to
in Section 11.1(a)) or any other event shall occur or condition exist, if the
effect of such default, event or condition is to accelerate the maturity of any
such Indebtedness or to permit the holder or holders thereof, or any trustee or
agent for such holders, to accelerate the maturity of any such Indebtedness, or
any such Indebtedness shall become or be declared to be due and payable prior to
its stated maturity other than as a result of a regularly scheduled payment, and
the principal amount of such Indebtedness is $15,000,000 or more; or
(f) (i) Guarantor or any of its Material Subsidiaries shall commence
a voluntary case concerning itself under the Bankruptcy Code; or (ii) an
involuntary case is commenced against Guarantor or any of its Material
Subsidiaries and the petition remains unstayed and in effect for more than sixty
(60) days, or is not dismissed within sixty (60) days, after commencement of the
case; or (iii) a custodian (as defined in the Bankruptcy Code) is appointed for,
or takes charge of, all or substantially all of the property of Guarantor or any
of its Material Subsidiaries or Guarantor or any of its Material Subsidiaries
commences any other proceedings under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction whether now or hereafter in effect relating to
Guarantor or any of its Material Subsidiaries or there is commenced against
Guarantor or any of its Material Subsidiaries any such proceeding which remains
undismissed for a period of sixty (60) days; or (iv) any order of relief is
entered in any such case or proceeding; or (v) Guarantor or any of its Material
Subsidiaries is adjudicated insolvent or bankrupt; or (vi) Guarantor or any of
its Material Subsidiaries suffers any appointment of any custodian or the like
for it or any substantial part of its property to continue undischarged or
unstayed for a period of sixty (60) days; or (vii) Guarantor or any of its
Material Subsidiaries makes a general assignment for the benefit of creditors;
or (viii) Guarantor or any of its Material Subsidiaries shall fail to pay, or
shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or (ix) Guarantor or any of its Material
Subsidiaries shall consent to, or approve in writing any of the foregoing; or
(g) an ERISA Event which constitutes grounds for the termination of
any Pension Plan maintained by Guarantor or any ERISA Affiliate by the PBGC or
for the
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appointment of a trustee by the PBGC to administer any Pension Plan maintained
by Guarantor or any ERISA Affiliate shall occur, or any Pension Plan maintained
by Guarantor or any ERISA Affiliate shall be terminated within the meaning of
Title IV of ERISA or a trustee shall be appointed by the PBGC to administer any
Pension Plan maintained by Guarantor or any ERISA Affiliate; or
(h) One or more judgments or decrees in an aggregate amount of
$15,000,000 or more, to the extent not paid by insurance or coverage thereof has
not been acknowledged in writing by the applicable insurer, shall be entered by
a court against Guarantor or any of its Subsidiaries and any such judgments or
decrees or enforcement proceedings in respect thereof shall not be stayed,
discharged, paid, bonded or vacated within 30 days; or
(i) a Change in Control shall occur.
11.2 Remedies. Upon the occurrence of any Guarantee Event of Default
and so long as the same shall be continuing, Agent or its successors,
transferees and assigns, as the case may be, may, at its option, declare a
default by written notice to Guarantor and at any time thereafter Agent or such
other authorized person may:
(a) exercise any right or remedy that may be available hereunder or
under any other SanDisk Tranche Operative Document; or
(b) exercise any other right or remedy that may be available under
applicable law or proceed by appropriate court action to enforce the terms
hereof or to recover damages for the breach hereof.
11.3 Costs and Expenses. Guarantor shall be liable for any and all
accrued and unpaid amounts due hereunder before, after or during the exercise of
any of the foregoing remedies, including, subject to the terms of Section 2(b)
hereof, all reasonable legal fees and other reasonable costs and expenses
incurred by the Guaranteed Parties in the enforcement of this Guarantee.
11.4 Remedies Cumulative. Except as expressly provided above, no
remedy under this Section 11 is intended to be exclusive, but each shall be
cumulative and in addition to any other remedy provided under this Section 11 or
otherwise available at law or in equity. The exercise by Agent of any one or
more of such remedies shall not preclude the simultaneous or later exercise by
any such Person or any other Person so entitled of any other remedy or remedies.
No express or implied waiver by Agent or any Participant or their respective
successors, transferees or assigns of any Guarantee Event of Default shall in
any way be, or be construed to be, a waiver of any future or subsequent
Guarantee Event of Default. The failure or delay of Agent in exercising any
rights granted it hereunder upon any occurrence of any of the contingencies set
forth herein shall not constitute a waiver of any such right upon the
continuation or recurrence of any such contingencies or similar contingencies
and any single or partial exercise of any particular right by Agent shall not
exhaust the same or constitute a waiver of any other right provided herein.
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Section 12. Notices. All notices, requests and demands to or upon Lessor,
Agent or Guarantor shall be in writing and delivered (i) personally, (ii) by a
nationally recognized overnight courier service, (iii) by mail (by registered or
certified mail, return receipt requested, postage prepaid) or (iv) by facsimile,
in each case addressed to the applicable parties at their respective addresses
or transmission numbers for notices set forth on Schedule I hereto. Any such
notice shall be effective upon receipt or refusal thereof. Lessor, Agent and
Guarantor may each change its address and transmission numbers for notices by
notice in the manner provided in this Section 12.
Section 13. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 14. Integration. This Guarantee represents the entire agreement of
Guarantor with respect to the subject matter hereof and there are no promises or
representations by any Guaranteed Party relative to the subject matter hereof
not reflected herein.
Section 15. Amendments in Writing. None of the terms or provisions of this
Guarantee may be waived, amended, supplemented or otherwise modified except as
provided in Section 11.1 of the Participation Agreement.
Section 16. Section Headings. The section headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
Section 17. Successors and Assigns. This Guarantee shall be binding upon
the successors and assigns of Guarantor and shall inure to the benefit of the
Guaranteed Parties and their respective successors and assigns.
Section 18. Submission to Jurisdiction. GUARANTOR HEREBY SUBMITS TO THE
NONEXCLUSIVE GENERAL JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF CALIFORNIA AND ANY CALIFORNIA STATE COURT SITTING IN THE
COUNTY OF SANTA XXXXX AND APPELLATE COURTS FROM ANY THEREOF FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS GUARANTEE OR THE
TRANSACTIONS CONTEMPLATED HEREBY. GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM
THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
Section 19. WAIVER OF JURY TRIAL. GUARANTOR HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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Section 20. GOVERNING LAW. THIS GUARANTEE SHALL IN ALL RESPECTS BE
GOVERNED BY THE INTERNAL LAW OF THE STATE OF CALIFORNIA AS TO ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.
Section 21. Nature of Transaction. Guarantor acknowledges the provisions
of Section 5.1 of the Participation Agreement (SanDisk Tranche).
Section 22. Actions by Guaranteed Parties. All actions by or on behalf of
one or more Guaranteed Parties in respect of this Guarantee or in respect of any
right, benefit or remedy under this Guarantee shall only be taken through the
Agent as provided in the Participation Agreement.
Section 23. Termination. Subject to Section 7 hereof, which shall survive
termination hereof, this Guarantee and the obligations of the Guarantor
hereunder shall terminate upon payment in full of the Guaranteed Obligations,
provided that the obligations of Guarantor hereunder shall survive as to any
indemnification obligations of Lessee which survive pursuant to Section 14.1 of
the Participation Agreement (SanDisk Tranche). Notwithstanding the foregoing, in
no event will the Guaranteed Obligations exceed, as of any date of
determination, the sum of the Lease Balance, all accrued and unpaid Variable
Rent, all indemnification obligations and Transaction Expenses due and payable
by Lessee under the SanDisk Tranche Operative Documents and all amounts payable
by Guarantor pursuant to Section 11.3 hereof.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly
executed and delivered by its duly authorized officer as of day and year first
above written.
SANDISK CORPORATION,
a Delaware corporation
By:
-------------------------
Name:
-----------------------
Title:
----------------------
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