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EXHIBIT 10.2
AMENDED AND RESTATED BORROWER SECURITY AGREEMENT
(StorMedia International, Ltd.; Strates Pte. Ltd.)
THIS AMENDED AND RESTATED BORROWER SECURITY AGREEMENT dated as of May
29, 1998 (this "Agreement") is entered into by and among STORMEDIA
INTERNATIONAL, LTD., a Cayman Islands corporation ("SIL"), and STRATES PTE.
LTD., a Singapore corporation (each a "Borrower," and collectively, the
"Borrowers"), and CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, as agent
for the Banks, as defined below (the "Agent").
RECITALS
A. Borrowers, StorMedia Incorporated, a Delaware corporation (the
"Parent Guarantor," collectively with the Subsidiary Guarantors, as defined
below, and the Borrowers, the "Loan Parties," each a "Loan Party"), certain
financial institutions named on Annex I thereof or who become parties thereto as
Banks (each a "Bank" and collectively, the "Banks"), Agent, Banque Nationale de
Paris, San Xxxxxxxxx Xxxxxx, as co-agent for the Banks (the "Co-Agent"), and
Canadian Imperial Bank of Commerce, Singapore Branch as the Designated Issuer
("Designated Issuer") have entered into that certain Credit Agreement dated as
of August 23, 1996 (as amended, supplemented, or otherwise modified through the
date hereof, the "Existing Credit Agreement").
B. In connection with the Existing Credit Agreement, the Borrowers and
the Agent entered into that certain Security Agreement dated as of August 23,
1996 (as amended, supplemented, or otherwise modified through the date hereof,
the "Existing Borrower Security Agreement").
C. On December 31, 1997, StorMedia Foreign Sales Corporation, a U.S.
Virgin Islands corporation and wholly-owned Subsidiary of Parent Guarantor
("FSC"), acquired all of the outstanding capital stock of Akashic Memories
Corporation, a California corporation ("Akashic") through the merger of
StorMedia Acquisition Corporation, a California corporation and wholly-owned
Subsidiary of FSC with and into Akashic. In connection with such acquisition,
certain of the other Loan Parties purchased the patents and applications pending
in Akashic's parent corporation, Kubota Corporation.
D. Pursuant to a series of consents and limited waivers, the Agent, the
Co-Agent, the Banks and the Designated Issuer deferred certain principal
payments in respect of the Term Loan and waived certain Events of Default
arising out of the Loan Parties' failure to comply with certain provisions of
the Existing Credit Agreement.
E. The Parent Guarantor, the Borrowers and the other Loan Parties
propose to enter into a financial restructuring (the "Restructuring"), pursuant
to which, among other things, one or more of the Loan Parties will consummate
(i) the financing transactions contemplated by the Foothill Group Financing
Documents, (ii) the Equity Investment and (iii) the issuance of the Seagate
Subordinated Debt;
F. In connection with the Restructuring, the Loan Parties, the Banks,
the Agent and the Co-Agent desire to amend and restate the Existing Credit
Agreement in its entirety (the Existing
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Credit Agreement, as so amended and restated, and the Amended and Restated
Credit Agreement, as amended, restated, supplemented or otherwise modified from
time to time, collectively, being the "Credit Agreement"). Capitalized terms
used herein and not otherwise defined herein have the meanings ascribed to such
terms in the Credit Agreement. Unless otherwise defined herein or in the Credit
Agreement, terms used in Division 9 of the California Uniform Commercial Code
(as in effect from time to time) are used herein as therein defined.
G. As a condition precedent to the effectiveness of the Credit
Agreement, the Banks, Agent, and Co-Agent have required that the Existing
Borrower Security Agreement be amended and restated in its entirety (the
Existing Borrower Security Agreement, as amended, restated, supplemented or
otherwise modified from time to time, collectively, being this "Agreement");
provided, however, that, as of the Effective Date, the rights and obligations of
the parties hereto shall be governed by this Agreement and not the Existing
Borrower Security Agreement, and no Event of Default or Potential Event of
Default under the Existing Credit Agreement shall constitute an Event of Default
or Potential Event of Default under this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Banks, Agent, and Co-Agent to enter into the Credit Agreement and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrowers and Agent hereby agree as follows:
SECTION 1. Grant of Security. In addition and without prejudice to the
security interests and charges created under the Existing Borrower Security
Agreement, each Borrower hereby assigns to Agent, for the benefit of Agent and
Banks, and hereby grants to Agent, for the benefit of Agent and Banks, a
security interest in all of such Borrower's right, title and interest in and to
the property described on Exhibit A attached hereto and in the Pledged
Collateral, as defined in Section 10 hereof, in each case whether now or
hereafter existing or in which any Borrower now has or hereafter acquires an
interest and wherever the same may be located (the "Collateral").
SECTION 2. Security for Obligations. This Agreement secures, and the
Collateral is collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all obligations and liabilities of every
nature of any Borrower or Borrowers or the Parent Guarantor, now or hereafter
existing, under or arising out of or in connection with the Credit Agreement or
any Loan Documents, and all extensions or renewals thereof, whether for
principal, interest, fees, expenses, indemnities or otherwise, whether voluntary
or involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Agent or a Bank as a preference, fraudulent transfer or
otherwise (all such obligations and liabilities being the "Underlying Debt"),
and all obligations of every nature of any Borrower or Borrowers now or
hereafter existing under this Agreement or any other Loan Document (all such
obligations, together with the Underlying Debt, being the "Secured
Obligations").
SECTION 3. Borrowers Remain Liable. Anything contained herein to the
contrary notwithstanding, (a) each Borrower shall remain liable under any
contracts and agreements included
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in the Collateral, to the extent set forth therein, to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Agent of any of its rights hereunder shall not
release any Borrower from any of its duties or obligations under the contracts
and agreements included in the Collateral, and (c) Agent shall not have any
obligation or liability under any contracts and agreements included in the
Collateral by reason of this Agreement, nor shall Agent be obligated to perform
any of the obligations or duties of any Borrower thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
SECTION 4. Representations and Warranties. Each Borrower represents and
warrants as follows:
(a) Ownership of Collateral. Except for the security interest
created by this Agreement and the Permitted Liens, Borrowers own the Collateral
free and clear of any lien, mortgage, security interest, legal or equitable
charge, pledge, deed of trust or other encumbrance. Except such as may have been
filed in favor of Agent relating to this Agreement and the Permitted Liens, no
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any filing or recording office.
(b) Condition and Location of Equipment and Inventory. Except for
Nextar thickness sorters whose suitability is in dispute, all of the Equipment
and Inventory is, as of the date hereof, of good and serviceable quality, free
from defects, and located at the places specified in Schedule I annexed hereto.
(c) Office Locations. The chief place of business, the chief
executive office and the office where SIL keeps its records regarding its
Accounts is, and has been for the four month period preceding the date hereof,
located at 0 Xxxx Xxxxxx 0, Xxxxxxxxx 000000. The chief place of business, the
chief executive office and the office where Strates Pte. Ltd. keeps its records
regarding its Accounts is, and has been for the four month period preceding the
date hereof, located at 0 Xxxx Xxxx Xxxxxx, Xxxxxxxxx 000000.
(d) Fictitious Names. No Borrower does any business under any
trade-name or fictitious business name.
(e) Delivery of Certain Collateral. All share certificates
representing the Shares (as defined in Section 10), all notes and other
instruments (excluding checks) comprising any and all items of Collateral have
been delivered to Agent duly endorsed or accompanied by duly executed
instruments of transfer or assignment in blank.
(f) Governmental Authorizations. No authorization, approval or
other action by, and no notice to or filing with (except for the filing of
financing statements to perfect Agent's Lien on the Collateral for which filing
of a financing statement is the method of perfection), any governmental
authority or regulatory body is required for either (i) the grant by any
Borrower of the security interest granted hereby or for the execution, delivery
or performance of this Agreement by any Borrower or (ii) the perfection of or
the exercise by Agent of its rights and remedies hereunder, other than such
actions and filings as have already been taken, unless the Credit Agreement does
not require that such authorization, approval, action, notice, or filing be made
until after the Effective Date.
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(g) Enforceability. All actions necessary to ensure the validity
and enforceability of Agent's Lien on the Collateral, including as against any
bona fide purchaser for value, have been duly taken.
(h) Perfection. This Agreement, together with the filing of a
financing statement with the Secretary of State of California or the deliveries
of certain items of Collateral in accordance with the terms hereof, creates a
valid, perfected and security interest in the Collateral of the priority
specified in the Intercreditor Agreement, securing the payment of the Secured
Obligations, and all filings and other actions necessary or desirable to perfect
and protect such security interest have been duly made or taken, unless the
Credit Agreement does not require that such filing or action be made until after
the Effective Date.
(i) Other Information. All information heretofore, herein or
hereafter supplied to Agent by or on behalf of any Borrower with respect to the
Collateral is (or, as to hereafter supplied information, will be) accurate and
complete in all material respects, and with respect to such information prepared
by a third party, to the best knowledge of the Borrower for which such
information was prepared, such information is accurate and complete in all
material respects.
SECTION 5. Further Assurances.
(a) Each Borrower shall execute and deliver to Agent, prior to or
concurrently with each Borrower's execution and delivery of this Agreement and
at any time thereafter at the request of Agent and at such Borrower's expense,
all financing statements, continuation financing statements, fixture filings,
security agreements, chattel mortgages, pledges, mortgages, deeds of trust,
assignments, endorsements of certificates of title, applications for title,
affidavits, reports, notices, schedules of accounts, letters of authority, and
all other documents that Agent may reasonably request, in form satisfactory to
Agent, to perfect and continue perfected Agent's security interests in the
Collateral, in order to fully consummate all of the transactions contemplated
under the Loan Documents and to enable Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, such Borrower will: (i) if any Account shall be
evidenced by a promissory note or other instrument (excluding checks), having a
face value in excess of One Thousand Dollars ($1,000) deliver and pledge to
Agent hereunder such note or instrument, duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to Agent; (ii) execute and file such financing or continuation
statements, or amendments thereto, or such other instruments or notices, as may
be necessary or desirable, or as Agent may request, in order to perfect and
preserve the security interests granted or purported to be granted hereby; (iii)
at any reasonable time, allow Agent or such other persons designated by Agent in
accordance with the terms of the Credit Agreement to inspect each Borrower's
books and to check, test, and appraise the Collateral in order to verify each
Borrower's financial condition or the amount, quality, value, condition of, or
any other matter relating to, the Collateral; and (iv) at Agent's request,
appear in and defend any action or proceeding that may affect such Borrower's
title to or Agent's security interest in all or any part of the Collateral.
(b) Each Borrower hereby authorizes Agent to file, register or
record such documents as may be appropriate to protect Agent's security interest
in the Collateral, relative to all or any part of the Collateral without the
signature of such Borrower. Each Borrower agrees that a carbon, photographic or
other reproduction of this Agreement or of a financing statement signed by
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such Borrower shall be sufficient as a financing statement and may be filed as
a financing statement in any and all jurisdictions.
(c) Each Borrower will furnish to Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Agent may reasonably
request, all in reasonable detail.
(d) Each Borrower will execute and deliver the Amended and
Restated Collateral Assignment in the form of Exhibit B to this Agreement.
SECTION 6. Covenants of Each Borrower. Each Borrower shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral where
violation is reasonably likely to have a material adverse effect on Agent's
rights in the Collateral or the value of the Collateral or Agent's ability to
foreclose on the Collateral;
(b) not change its name or any foreign equivalent, FEIN,
corporate structure (within the meaning of Section 9402(7) of the California
Uniform Commercial Code), or identity, or add any new fictitious name; provided,
however, that such Borrower may change its name upon thirty (30) days' prior
written notification thereof to Agent and so long as, at the time of such
written notification, such Borrower provides any financing statements necessary
to perfect and continue perfected Agent's security interests;
(c) not relocate its chief place of business, chief executive
office or residence to a new location without thirty (30) days' prior written
notification thereof to Agent, and so long as at the time of such written
notification, such Borrower provides any financing statements or fixture filings
necessary to perfect and continue perfected Agent's security interests and also
provides to Agent a Collateral Access Agreement with respect to such new
location in form and substance satisfactory to Agent;
(d) if Agent gives value to enable such Borrower to acquire
rights in or the use of any Collateral (as specified in writing by Agent to such
Borrower at the time of the giving of such value), use such value for such
purposes; and
(e) (i) cause all assessments and taxes, whether real, personal,
or otherwise, due or payable by, or imposed, levied, or assessed against such
Borrower or any of the Collateral to be paid in full, before delinquency or
before the expiration of any extension period, except to the extent that the
validity of such assessment or tax shall be the subject of a Permitted Protest;
(ii) make due and timely payment or deposit of all such federal, state, foreign,
and local taxes, assessments, or contributions required of it by law, except to
the extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest, and will execute and deliver to the Agent, on demand,
appropriate certificates attesting to the payment thereof or deposit with
respect thereto; and (iii) make timely payment or deposit of all tax payments
and withholding taxes required of it by those laws concerning F.I.C.A. (or its
foreign equivalent) and F.U.T.A. (or its foreign equivalent), state disability
(or its foreign equivalent), and, upon request, furnish the Agent with proof
satisfactory to
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Agent indicating that such Borrower has made such payments or deposits; provided
that such Borrower shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed sale
under any judgement, writ or warrant of attachment entered or filed against such
Borrower or any of the Collateral as a result of the failure to make such
payment.
SECTION 7. Special Covenants With Respect to Equipment and Inventory.
Each Borrower shall:
(a) keep the Equipment and Inventory (other than Equipment
consisting of laptop computers and other than Inventory sold in the ordinary
course of business) at the places specified on Schedule I annexed hereto and to
the extent permitted by subsection (e) of this Section 7 or, upon thirty (30)
days' prior written notice to Agent, at such other places in jurisdictions where
all action that may be necessary or desirable, or that Agent may request, in
order to perfect and protect any security interest granted or purported to be
granted hereby, or to enable Agent to exercise and enforce its rights and
remedies hereunder, with respect to such Equipment and Inventory shall have been
taken;
(b) maintain the Equipment or cause the Equipment to be
maintained in good repair, working order, and condition (ordinary wear and tear
excepted), and in accordance with any manufacturer's manual, and make all
necessary replacements thereto so that the value and operating efficiency
thereof shall at all times be preserved, and shall forthwith, or, in the case of
any loss or damage to any of the Equipment when subsection (c) of Section 8 is
not applicable, as quickly as practicable after the occurrence thereof, make or
cause to be made all repairs, replacements and other improvements in connection
therewith that are necessary or desirable to such end. Each Borrower shall
promptly furnish to Agent a statement respecting any material loss or damage to
any of the Equipment. Borrowers shall not permit any item of Equipment to become
a fixture to real estate or an accession to other property, and the Equipment is
now and shall at all times remain personal property;
(c) keep correct and accurate records of the Inventory, in
accordance with good business practices, including itemizing Borrower's cost
therefor and (where applicable) the current list prices for the Inventory;
(d) upon Agent's request, deliver to Agent, properly endorsed,
any and all evidences of ownership of, certificates of title, or applications
for title of any items of Equipment;
(e) not, at any time now or hereafter, store any of the Equipment
or Inventory with a bailee, warehouseman, or similar party without Agent's prior
written consent. The Agent and Borrowers hereby consent to the transfer of up to
$1,000,000 in book value of Inventory and up to $1,000,000 of OLV of Equipment
(as defined in the Intercreditor Agreement) to a warehouse selected by Borrowers
located in California, Singapore or Malaysia; provided, however, that Borrowers
shall provide twenty (20) days' prior written notification thereof to the Agent
and, at such time, provide financing statements or fixture filings (or foreign
equivalents) necessary to perfect the Agent's Liens; and
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(f) if any Inventory is in possession or control of any of
Borrower's agents or processors, upon the occurrence of an Event of Default,
instruct such agent or processor to hold all such Inventory for the account of
Agent and subject to the instructions of Agent.
SECTION 8. Insurance.
(a) Each Borrower shall, at its own expense, maintain insurance
with respect to the Equipment and Inventory in which it has an interest in such
amounts, against such risks, in such form and with such insurers as is customary
for similarly situated businesses. Such insurance shall include, without
limitation, property damage insurance and liability insurance. Each policy for
property damage insurance shall provide for all losses to be paid directly to
Agent in accordance with the Intercreditor Agreement. Each policy shall in
addition name the applicable Borrower and Agent as insured parties thereunder
(without any representation or warranty by or obligation upon Agent) as their
interests may appear and have attached thereto a loss payable clause acceptable
to Agent that shall (i) contain an agreement by the insurer that any loss
thereunder shall be payable to Agent in accordance with the Intercreditor
Agreement notwithstanding any action, inaction or breach of representation or
warranty by either Borrower, (ii) provide that there shall be no recourse
against Agent for payment of premiums or other amounts with respect thereto, and
(iii) provide that at least thirty (30) days' prior written notice of
cancellation, material amendment, reduction in scope or limits of coverage or of
lapse shall be given to Agent by the insurer. Each Borrower shall, if so
requested by Agent, deliver to Agent original or duplicate policies of such
insurance and, as often as Agent may reasonably request (but no more frequently
than once per year, unless there is a change in the policy or the insurer), a
report of a reputable insurance broker with respect to such insurance. Further,
in accordance with the Intercreditor Agreement, each Borrower shall, at the
request of Agent, duly execute and deliver instruments of assignment of such
insurance policies to comply with the requirements of Section 5(a) and cause the
respective insurers to acknowledge notice of such assignment.
(b) Payments for claims issued by any liability insurance
maintained by any Borrower pursuant to this Section 8 may be paid directly to
the Person who shall have incurred liability covered by such insurance. In case
of any loss involving damage to Equipment or Inventory when subsection (c) of
this Section 8 is not applicable, each Borrower shall make or cause to be made
the necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance maintained by such Borrower pursuant to this Section 8
shall be paid to such Borrower as reimbursement for the costs of such repairs or
replacements.
(c) Upon (i) the occurrence and during the continuation of any
Event of Default or (ii) the actual or constructive loss (in excess of $100,000
per occurrence) of any Equipment or Inventory, all insurance payments in respect
of such Equipment or Inventory shall be paid to and applied by Agent as
specified in Section 18.
SECTION 9. Special Covenants with respect to Accounts and Related
Contracts.
(a) Each Borrower shall keep its chief place of business and
chief executive office and the office where it keeps its records concerning the
Accounts and Related Contracts at the location specified in Section 4 or, upon
30 days' prior written notice to Agent, at such other location in a jurisdiction
where all action that may be necessary or desirable, or that Agent may request,
in
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order to perfect and protect any security interest granted or purported to be
granted hereby, or to enable Agent to exercise and enforce its rights and
remedies hereunder, with respect to such Accounts and Related Contracts shall
have been taken. Each Borrower will hold and preserve such records and, subject
to the terms of the Credit Agreement, will permit representatives of Agent
during normal business hours to inspect and make abstracts from such records,
and each Borrower agrees to render to Agent, at such Borrower's cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto. Promptly upon the request of Agent, each Borrower shall deliver
to Agent complete and correct copies of each Related Contract.
(b) Each Borrower shall, for not less than 3 years from the date
on which such Account arose, maintain (i) complete records of each Account,
including records of all payments received, credits granted and merchandise
returned, and (ii) all material documentation relating thereto.
(c) Except as otherwise provided in this subsection (c), each
Borrower shall continue to collect, at its own expense, all amounts due or to
become due such Borrower under the Accounts and Related Contracts. In connection
with such collections, each Borrower may take such action as such Borrower or
Agent may deem necessary or advisable to enforce collection of amounts due or to
become due under the Accounts; provided, however, that Agent shall have the
right, subject to the Intercreditor Agreement, at any time, upon the occurrence
and during the continuation of an Event of Default and upon written notice to a
Borrower of its intention to do so, to notify the account debtors or obligors
under any Accounts of the assignment of such Accounts to Agent, and to direct
such account debtors or obligors to make payment of all amounts due or to become
due to such Borrower thereunder directly to Agent, to notify each person
maintaining a lockbox or similar arrangement to which account debtors or
obligors under any Accounts have been directed to make payment to remit all
amounts representing collections on checks and other payment items from time to
time sent to or deposited in such lock box or other arrangement directly to
Agent and, upon such notification and at the expense of such Borrower, to
enforce collection of any such Accounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such
Borrower might have done. After receipt by a Borrower of the notice from Agent
referred to in the proviso to the preceding sentence, (i) all amounts and
proceeds (including checks and other instruments) received by such Borrower in
respect of the Accounts and the Related Contracts shall be received in trust for
the benefit of Agent hereunder, shall be segregated from other funds of such
Borrower and shall be forthwith paid over or delivered to Agent in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 18, and (ii) such Borrower shall not adjust,
settle or compromise the amount or payment of any Account, or release wholly or
partly any account debtor or obligor thereof, or allow any credit or discount
thereon. If the Event of Default giving rise to the exercise of such remedies by
Agent shall be cured or waived, then Agent shall reinstate the Borrowers'
collection rights with respect to such Accounts.
SECTION 10. Special Provisions with Respect to Investment Property.
(a) Each Borrower hereby pledges, assigns, grants and delivers to
Agent, for the benefit of Banks and grants to Agent, for the benefit of Banks a
security interest in the shares of stock listed on Schedule II hereto (the
"Shares"), together with all proceeds and substitutions thereof, all cash, stock
and other moneys, investment property and property paid thereon, all rights to
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subscribe for securities declared or granted in connection therewith, including,
but not limited to, those arising from or paid in connection with a stock
dividend, stock split, reclassification, reorganization, merger, consolidation,
sale of assets or other exchange of securities or any dividends or other
distributions of any kind and all other cash and noncash proceeds of the
foregoing (all of which shall be part of the "Pledged Collateral"), as security
for the Secured Obligations.
(b) The certificate or certificates for the securities included
in the Pledged Collateral, accompanied by an instrument of assignment duly
executed in blank by each Borrower, have been, or will be immediately upon the
subsequent receipt thereof by such Borrower, delivered by such Borrower to
Agent. Each Borrower shall cause the books of each corporation whose stock is
part of the Collateral to reflect the pledge of the Shares. Upon the occurrence
of an Event of Default hereunder, Agent may effect the transfer of any
securities included in the Pledged Collateral into its name and cause new
certificates representing such securities to be issued in its name, but such
action shall not be a strict foreclosure of its Lien therein. Each Borrower will
execute and deliver such documents, and take or cause to be taken such actions,
as Agent may reasonably request to perfect or continue the perfection of Agent's
security interest in the Collateral.
(c) Each Borrower represents and warrants to and covenants with
Agent, for the benefit of Agent and Banks that there are no subscriptions,
warrants or other options exercisable with respect to the Shares; the Shares
represent the percentage of the issued and outstanding stock of the Subsidiaries
listed on Schedule II; there are no agreements that require any Subsidiaries to
issue any additional shares of such Subsidiaries, and there are no outstanding
options to purchase such additional shares; the Shares have been duly authorized
and validly issued, and are fully paid and non-assessable; and the Pledged
Collateral is not the subject of any present or, to the best knowledge of the
Borrowers, threatened suit, action, arbitration, administrative or other
proceeding, and Borrowers know of no reasonable grounds for the institution of
any such proceedings.
(d) Unless an Event of Default shall have occurred and be
continuing, Borrowers shall be entitled to exercise any voting rights with
respect to the Pledged Collateral and to give consents, waivers and
ratifications in respect thereof, provided that no vote shall be cast or
consent, waiver or ratification given or action taken which would be
inconsistent with any of the terms of this Agreement or which would constitute
or create any violation of any of such terms. All such rights of each Borrower
to vote and give consents, waivers and ratifications shall upon notice to such
Borrower cease in case an Event of Default hereunder shall occur and be
continuing. If the Event of Default giving rise to such exercise of remedies by
Agent shall be cured or waived, then such Borrower shall again have the voting
rights with respect to the stock of any of its Subsidiaries.
(e) Borrowers recognize that Agent may be unable to effect a
public sale of all or a part of the Pledged Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, as amended ("Act") or
other applicable securities laws, so that Agent may be compelled to resort to
one or more private sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire the Pledged Collateral for
their own account, for investment and without a view to the distribution or
resale thereof. Each Borrower understands that private sales so made may be at
prices and on other terms less favorable to the seller than if the Pledged
Collateral were sold at public sales, and agrees that Agent has no obligation to
delay the sale of any of the Pledged Collateral for the period of time necessary
(even if Agent would agree), to register such
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securities for sale under the Act. Each Borrower agrees that private sales made
under the foregoing circumstances shall be deemed to have been made in a
commercially reasonable manner.
(f) Borrowers agree that each shall:
(i) not, except as permitted by the Credit Agreement, (a)
sell, assign (by operation of law or otherwise) or otherwise dispose of, or
grant any option with respect to, any of the Shares (b) create or suffer to
exist any Lien upon or with respect to any of the Shares except for the security
interest under this Agreement and other Permitted Liens, or (c) permit any
issuer of Shares to merge or consolidate unless all the outstanding capital
stock of the surviving or resulting corporation is, upon such merger or
consolidation, pledged hereunder;
(ii) (a) cause each issuer of Shares not to issue any
stock or other securities in addition to or in substitution for the Shares
issued by such issuer, except to such Borrower, (b) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities of each issuer of Shares to the
extent necessary to cause the percentage of shares of such issuer pledged
hereunder to equal the percentage of the issued and outstanding shares of all
classes of capital stock of each Subsidiary of Borrowers set forth on Schedule
II hereto, and (c) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all shares of stock of any Person that, after
the date of this Agreement, becomes, as a result of any occurrence, a direct
Subsidiary of such Borrower.
SECTION 11. Special Provisions with Respect to Brokerage and Deposit
Accounts.
(a) All deposit and brokerage accounts of Borrowers existing on the date
hereof are accurately listed on the Schedules to the Credit Agreement. Each
Borrower shall notify Agent within five (5) days of the opening or creating of
any new deposit or brokerage accounts, and shall provide Agent with such
information as Agent may require in order to perfect or protect its security
interest in such deposit or brokerage accounts.
(b) Upon the occurrence and during the continuation of an Event of
Default, Agent may exercise dominion and control over, and refuse to permit
further withdrawals, issuance of entitlement orders or other directions to
effect transactions by any Borrower (whether of money, securities, instruments
or other property) from any brokerage or deposit accounts constituting part of
the Collateral.
SECTION 12. License of Patents, Trademarks, Copyrights, etc. Each
Borrower hereby assigns, transfers and conveys to Agent, for the benefit of
Agent and Banks, effective upon the occurrence of any Event of Default, the
nonexclusive right and license to use all trademarks, trade names, copyrights,
patents or technical processes owned or used (to the extent that such Borrower
has the right to assign such property not owned by it) by such Borrower that
relate to the Collateral and any other collateral granted by such Borrower as
security for the Secured Obligations, together with any goodwill associated
therewith, all to the extent necessary to enable Agent to use, possess and
realize on the Collateral for the benefit of Agent and Banks and to enable any
successor or assign to enjoy the benefits of the Collateral. This right and
license shall inure to the benefit of all successors, assigns and transferees of
Agent and its successors, assigns and transferees, whether by voluntary
conveyance, operation of law, assignment, transfer, foreclosure, deed in lieu of
foreclosure
10
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or otherwise. Such right and license is granted in consideration of the
extension of credit by the Banks to the Borrowers, without requirement that any
monetary payment whatsoever be made to any Borrower.
SECTION 13. Transfers and Other Liens. No Borrower shall:
(a) except to the extent permitted in the Credit Agreement and
the Intercreditor Agreement, sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral; or
(b) except for the security interest created by this Agreement,
and except to the extent permitted in the Credit Agreement and the Intercreditor
Agreement, create or suffer to exist any Lien upon or with respect to any of the
Collateral to secure the indebtedness or other obligations of any Person.
SECTION 14. Agent Appointed Attorney-in-Fact. Each Borrower hereby
irrevocably appoints Agent as such Borrower's attorney-in-fact, with full
authority in the place and stead of such Borrower and in the name of such
Borrower, Agent or otherwise, from time to time in Agent's discretion to take
any action and to execute any instrument that Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation: (a) to sign and file on behalf of such Borrower any financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral; (b) upon the occurrence and during the continuation of an Event
of Default, to obtain and adjust insurance required to be maintained by such
Borrower or paid to Agent pursuant to Section 8; (c) upon the occurrence and
during the continuation of an Event of Default, to ask, demand, collect, xxx
for, recover, compound, receive and give acquittance and receipts for monies due
and to become due under or in respect of any of the Collateral; (d) upon the
occurrence and during the continuation of an Event of Default, to receive,
endorse and collect any drafts or other instruments, documents and chattel paper
in connection with clauses (a) and (b) above; (e) upon the occurrence and during
the continuation of an Event of Default, to file any claims or take any action
or institute any proceedings that Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of Agent
with respect to any of the Collateral; (f) upon the occurrence and during the
continuation of an Event of Default, to pay or discharge taxes or liens levied
or placed upon or threatened against the Collateral, the legality or validity
thereof and the amounts necessary to discharge the same to be determined by
Agent in its sole discretion, any such payments made by Agent to become
obligations of Borrowers to Agent, due and payable immediately without demand;
(g) upon the occurrence and during the continuation of an Event of Default, to
sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and (h) upon the occurrence and during the
continuation of an Event of Default, generally to sell, transfer, pledge, make
any agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though Agent were the absolute owner thereof for all
purposes, and to do, at Agent's option and Borrowers' expense, at any time or
from time to time, all acts and things that Agent deems necessary to protect,
preserve or realize upon the Collateral and Agent's security interest therein in
order to effect the intent of this Agreement, all as fully and effectively as
any Borrower might do.
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SECTION 15. Agent May Perform. If any Borrower fails to perform any
agreement contained herein, Agent may itself perform, or cause performance of,
such agreement, and the expenses of Agent incurred in connection therewith shall
be payable by such Borrower under Section 19.
SECTION 16. Standard of Care. The powers conferred on Agent hereunder
are solely to protect its interest and the interest of the Banks in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the exercise of reasonable care in the custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
and other duties imposed by applicable law, Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Agent shall be
deemed to have exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which Agent accords its own property.
SECTION 17. Remedies. Subject to the terms of the Intercreditor
Agreement, if any Event of Default shall have occurred and be continuing, Agent
may exercise in respect of the Collateral, in addition to all other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party on default under the Uniform Commercial Code as in
effect in any relevant jurisdiction (the "Code") (whether or not the Code
applies to the affected Collateral), and also may (a) require any Borrower to,
and such Borrower hereby agrees that it will at its expense and upon request of
Agent forthwith, assemble all or part of the Collateral as directed by Agent and
make it available to Agent at a place to be designated by Agent that is
reasonably convenient to both parties, (b) enter onto the property where any
Collateral is located and take possession thereof with or without judicial
process, (c) prior to the disposition of the Collateral, store, process, repair
or recondition the Collateral or otherwise prepare the Collateral for
disposition in any manner to the extent Agent deems appropriate, (d) take
possession of any Borrower's premises or place custodians in exclusive control
thereof, remain on such premises and use the same and any of such Borrower's
equipment for the purpose of completing any work in process, taking any actions
described in the preceding clause (c) and collecting any Secured Obligation, and
(e) without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of Agent's
offices or elsewhere, for cash, on credit or for future delivery, at such time
or times and at such price or prices and upon such other terms as Agent may deem
commercially reasonable. Agent may be the purchaser of any or all of the
Collateral at any such sale and Agent shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Secured Obligations as a credit on account of the purchase price for any
Collateral payable by Agent at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
any Borrower, and each Borrower hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Borrower agrees that, to the extent notice
of sale shall be required by law, at least ten days' notice to such Borrower of
(i) the time and place of any public sale or (ii) the time after which any
private sale is to be made shall constitute reasonable notification. Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed there for, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Borrower
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13
hereby waives any claims against Agent arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if Agent
accepts the first offer received and does not offer such Collateral to more than
one offeree, provided Agent acted in a commercially reasonable manner. If the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay all the Secured Obligations, each Borrower shall be liable to the maximum
extent permitted by applicable law for the deficiency and the fees of any
attorneys employed by Agent to collect such deficiency.
SECTION 18. Application of Proceeds. Except as expressly provided
elsewhere in this Agreement and the Intercreditor Agreement, all proceeds
received by Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may in the discretion of
Agent, be held by Agent for the benefit of Agent and Banks as Collateral for,
and/or then, or at any other time thereafter, applied in full or in part by
Agent against, the Secured Obligations in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale, collection
or other realization, including reasonable compensation to Agent and its agents
and counsel, and all other expenses, liabilities and advances made or incurred
by Agent in connection therewith, and all amounts for which Agent is entitled to
indemnification hereunder and all advances made by Agent hereunder for the
account of any Borrower, and to the payment of all costs and expenses paid or
incurred by Agent in connection with the exercise of any right or remedy
hereunder, all in accordance with Section 19;
SECOND: To the payment of all other Secured Obligations (for the ratable
benefit of the holders thereof) in such order as Agent shall elect; and
THIRD: To the payment to or upon the order of Borrowers, or to whosoever
may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such proceeds.
SECTION 19. Indemnity and Expenses.
(a) Each Borrower agrees to indemnify Agent and Banks from and
against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result
solely from Agent's gross negligence or willful misconduct as finally determined
by a court of competent jurisdiction.
(b) Each Borrower will pay to Agent upon demand the amount of any
and all costs and expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that Agent may incur in connection with
(i) the administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any of
the Collateral, (iii) the exercise or enforcement of any of the rights of Agent
hereunder, or (iv) the failure by any Borrower to perform or observe any of the
provisions hereof.
SECTION 20. Appointment of Agent. Agent has been appointed to act as
Agent hereunder by Banks as provided in the Credit Agreement. Agent shall be
obligated, and shall have the right hereunder, to make demands, to give notices,
to exercise or refrain from exercising any rights, and
13
14
to take or refrain from taking any action (including without limitation the
substitution of Collateral) solely in accordance with this Agreement and the
Credit Agreement. As provided in Section 8.01 of the Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action hereunder,
but subject to Section 9.01 of the Credit Agreement, shall be required to act or
refrain from acting upon the instructions of the Majority Banks, and such
instructions shall be binding upon all Banks. Upon the resignation or removal of
the Agent under Section 8.06 of the Credit Agreement, the successor agent shall
be entitled to exercise rights, refrain from exercising rights, take such
actions, and refrain from taking actions, as provided to the Agent hereunder and
under the Credit Agreement.
SECTION 21. Amendments, etc. No amendment or waiver of any provision of
this Agreement, or consent to any departure by any Borrower here from, shall in
any event be effective unless the same shall be in writing and signed by Agent,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given.
SECTION 22. Notices. All notices and other communications provided for
hereunder shall be in writing (including telegraph, telex or facsimile
communication) and mailed or telegraphed or telexed or sent by facsimile or
delivered, if to any Borrower or Agent, at its address set forth on the
signature pages hereof; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall be effective three (3) Business Days after
deposit in the U.S. mail, postage prepaid, when sent by telex or sent by
facsimile, or when delivered, respectively.
SECTION 23. Failure or Indulgence Not Waiver. Remedies Cumulative. No
failure or delay on the part of Agent in the exercise of any power, right or
privilege hereunder shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude any other or
further exercise thereof or of any other power, right or privilege. All rights
and remedies existing under this Agreement are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
SECTION 24. Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 25. Headings. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
SECTION 26. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF CALIFORNIA, EXCEPT AS REQUIRED BY MANDATORY PROVISION OF LAW AND EXCEPT
TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA.
14
15
SECTION 27. Consent to Jurisdiction. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST ANY PARTY HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE COUNTY OF
SAN FRANCISCO, STATE OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT EACH SUCH PARTY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT.
SECTION 28. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A
MATERIAL INDUCEMENT FOR EACH SUCH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH SUCH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED
FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may he filed as a written consent to a trial by the
court.
SECTION 29. Confidentiality. Any information provided in connection
herewith to the Agent, Co-Agent, Designated Issuer, or any Bank shall be subject
to the confidentiality provisions of Section 9.06(e) of the Credit Agreement.
SECTION 30. Counterparts. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
SECTION 31. Joint and Several. Borrowers shall be jointly and severally
liable for the payment and satisfaction of the Secured Obligations and for the
performance of all of Borrowers' obligations hereunder.
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IN WITNESS WHEREOF, Borrowers and Agent have caused this Agreement to be
duly executed and delivered by their respective officers there unto duly
authorized as of the date first written above.
STORMEDIA INTERNATIONAL LTD.
By: /s/
-----------------------------------
Title:
--------------------------------
Notice Address:
0 Xxxx Xxxxxx 0
Xxxxxxxxx 000000
Attention: Chief Financial Officer
STRATES PTE. LTD., as Borrower
By: /s/
-----------------------------------
Title:
--------------------------------
Notice Address:
0 Xxxx Xxxx Xxxxxx
Xxxxxxxxx 000000
Attention: Chief Financial Officer
S-1
17
CANADIAN IMPERIAL BANK OF
COMMERCE, New York Agency, as
Agent for the Banks
By: /s/
-----------------------------------
Title:
--------------------------------
Notice Address:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xx. Xxxx Xxxxxx
S-2
18
EXHIBIT A
TO
AMENDED AND RESTATED
BORROWER SECURITY AGREEMENT
(SIL; Strates)
Collateral
The Collateral shall consist of all right, title and interest of any
Borrower in and to the following:
(a) All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;
(b) All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of any Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and any
Borrower's books relating to any of the foregoing;
(c) All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, service marks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;
(d) All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to any
Borrower arising out of the sale or lease of goods, the licensing of technology
or the rendering of services by any Borrower, whether or not earned by
performance, and any and all credit insurance, guaranties, and other security
therefor, as well as all merchandise returned to or reclaimed by any Borrower
and any Borrower's books relating to any of the foregoing (any and all such
accounts, contract rights, royalties, license rights and other forms of
obligations being the "Accounts," and any and all such credit insurance,
guaranties and security agreements being the "Related Contracts");
(e) All documents, cash, deposit accounts, investment property,
securities, letters of credit, certificates of deposit, instruments and chattel
paper now owned or hereafter acquired and any Borrower's books relating to the
foregoing;
(f) All copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work thereof, whether published or unpublished, now owned or hereafter acquired;
all trade secret rights, including all rights to unpatented inventions,
know-how, operating manuals, license rights and agreements and confidential
A-1
19
information, now owned or hereafter acquired; all mask work or similar rights
available for the protection of semiconductor chips, now owned or hereafter
acquired; all claims for damages by way of any past, present and future
infringement of any of the foregoing; and
(g) Any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and proceeds thereof.
A-2
20
EXHIBIT B
TO
AMENDED AND RESTATED
BORROWER SECURITY AGREEMENT
(SIL; Strates)
Form of Amended and Restated Collateral Assignment, Patent Mortgage and
Security Agreement
Attached.
B-1
21
SCHEDULE I
TO
AMENDED AND RESTATED
BORROWER SECURITY AGREEMENT
Locations of Equipment:
StorMedia International, Ltd.
Xxxx Xxxxxx
0 Xxxx Xxxxxx 0
Xxxxxxxxx 000000
StorMedia International, Ltd.
Loyang Branch
00 Xxxxxx Xxxxx
Xxxxxxxxx 000000
Strates Pte. Ltd.
0 Xxxx Xxxx Xxxxxx
Xxxxxxxxx 000000
Locations of Inventory:
StorMedia International, Ltd.
Xxxx Xxxxxx
0 Xxxx Xxxxxx 0
Xxxxxxxxx 000000
StorMedia International, Ltd.
Loyang Branch
00 Xxxxxx Xxxxx
Xxxxxxxxx 000000
Strates Pte. Ltd.
0 Xxxx Xxxx Xxxxxx
Xxxxxxxxx 000000
I-1
22
SCHEDULE II
TO
AMENDED AND RESTATED
BORROWER SECURITY AGREEMENT
(SIL; Strates)
Pledged Shares
Pledged Percentage
Subsidiaries of StorMedia Pledged Certificate of ownership
International, Ltd. Shares Number Pledged
------------------- ------ ------ -------
Strates Pte. Ltd. 100%
Subsidiaries of Strates Pte. Ltd.
None N/A N/A N/A
II-1
