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EXHIBIT 99.3
KUBOTA GUARANTY AND INDEMNIFICATION
THIS KUBOTA GUARANTY AND INDEMNIFICATION, dated as of December 15, 1997
(the "Guaranty"), is executed by KUBOTA CORPORATION., a Japanese corporation
("Parent"), in favor of STORMEDIA INCORPORATED, a Delaware corporation
("StorMedia").
RECITALS
A. Pursuant to the Agreement and Plan of Reorganization, of even
date hereof (the "Agreement"), between StorMedia, Akashic International Inc., an
indirect wholly owned subsidiary of Parent ("AII") and Akashic Memories
Corporation, a subsidiary of Parent ("Akashic"), StorMedia has agreed to acquire
Akashic through a statutory merger of one of its subsidiaries with and into
Akashic (the "Merger"). Unless otherwise defined herein, all other capitalized
terms used herein and defined in the Agreement shall have the respective
meanings given to those terms in the Agreement.
B. StorMedia's obligation to consummate the Merger is subject,
among other conditions to receipt by StorMedia of this Guaranty, duly executed
by Parent.
C. In addition, in the event AII is dissolved, Parent shall assume
all obligations and liabilities of every nature of AII now or hereafter existing
under the terms of the Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Parent hereby agrees with StorMedia as follows:
1. Guaranty.
a. Parent unconditionally guarantees all obligations and
liabilities of AII now or hereafter existing arising in any manner in connection
with, as a result of or under the terms of the Agreement.
b. This Guaranty is absolute, unconditional, continuing and
irrevocable and if AII shall dissolve, liquidate or fail to pay or perform any
obligations to StorMedia as and when such payments or performance are due under
the Agreement which is subject to this Guaranty, Parent shall forthwith pay to
StorMedia when such payments or performance are due in the place of AII.
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2. Consent to Dissolution. StorMedia agrees that at such time that
AII is dissolved or liquidated, it shall, at the request of Parent, provide
acknowledgment of AII's release of all obligations under the Agreement, so long
as Parent is then still obligated as guarantor and indemnitor hereunder.
3. Representations and Warranties. Parent represents and warrants
to StorMedia that (a) Parent is a corporation duly organized, validly, existing
and in good standing under the laws of its country of incorporation and is duly
qualified and in good standing in each jurisdiction where the nature of its
business or properties requires such qualification; (b) the execution, delivery
and performance by Parent of this Guaranty are within the power of Parent and
have been duly authorized by all necessary actions on the part of Parent; (c)
this Guaranty has been duly executed and delivered by Parent and constitutes a
legal, valid and binding obligation of Parent, enforceable against it in
accordance with its terms, except as limited by bankruptcy, insolvency or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally; (d) the execution, delivery and performance of this
Guaranty do not (i) violate any laws, rules or regulations applicable to Parent
or (ii) contravene any material contractual obligation of Parent; and (e) no
consent, approval, order or authorization of, or registration, declaration or
filing with, any governmental authority or other person or entity (including,
without limitation, the shareholders of any Parent) is required in connection
with the execution, delivery and performance of this Guaranty, except such
consents, approvals, orders, authorizations, registrations, declarations and
filings that are so required and which have been obtained and are in full force
and effect
4. Indemnification. Parent will indemnify and hold harmless
StorMedia and the Surviving Corporation and its respective officers, directors,
agents and employees, and each person, if any, who controls or may control
StorMedia or the Surviving Corporation within the meaning of the Securities Act
of 1933, as amended (hereinafter referred to individually as an "Indemnified
Person" and collectively as "Indemnified Persons") from and against any and all
losses, costs, damages, liabilities and expenses arising from claims, demands,
actions, causes of action, including, without limitation, reasonable legal fees
arising out of or relating to claims by minority shareholders, holders of
Akashic Capital Stock or options to purchase Akashic Common Stock of Akashic
prior to the Merger (each a "Minority Shareholder" and collectively the
"Minority Shareholders") alleging breach of fiduciary duty, fraud,
misrepresentation or any other claim relating to the Merger or the consideration
(or lack thereof) received by such Minority Shareholder(s) in the Merger or the
termination of options or rights to purchase Akashic Common Stock.
In the event the Buyer or the Surviving Corporation becomes aware of a
claim by a Minority Shareholder(s) which Buyer or the Surviving Corporation
believes has or may result in Damages, StorMedia shall notify Parent of such
claim and Parent shall either defend against such claim or settle such claim, in
each case at its expense and in a manner which results in no Damages being
incurred by either StorMedia or the Surviving Corporation and in both StorMedia
and the Surviving Corporation being unconditionally released from all future
liability with respect to such claim. In the event Parent fails to so defend
against or settle such claim, StorMedia and Surviving Corporation may defend
against or settle such claim and Parent shall reimburse promptly, as incurred,
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all expenses and damages incurred in connection therewith upon request for such
reimbursement by StorMedia or the Surviving Corporation, as applicable.
5. Cancellation of Debt. Parent shall extinguish, or cause to be
extinguished, without creating taxable income to Akashic, all long term debt and
debentures of Akashic or its subsidiaries (other than the loan from Western
Digital Corporation) (the "Debt"), and shall deliver evidence satisfactory to
StorMedia that all such Debt has been extinguished. To the extent StorMedia
incurs any losses, costs, damages or liabilities due to Parent's failure to
extinguish all Debt by Closing, Parent shall indemnify StorMedia for any
damages, costs, expenses or other liabilities incurred as a result of such
failure.
6. Waivers. Parent waives (a) any right to require StorMedia to (i)
proceed against AII or (ii) pursue any other remedy in StorMedia's power
whatsoever; (b) any setoff or counterclaim of AII or any defense which results
from any disability or other defense of AII or the cessation or stay of
enforcement from any cause whatsoever of the liability of AII; and (c) all
presentments, demands for performance, notices of non-performance, notices
delivered under the Agreement.
7. Miscellaneous.
(a) All notices and other communications given to or made
upon any party hereto in connection with this Agreement shall be in
writing (including telexed, telecopied or telegraphic communication) and
mailed (by certified or registered mail), telexed, telegraphed,
telecopied or delivered to the respective parties, as follows:
If to Parent
Kubota Corporation
0-00 Xxxxxxxxxxxxxxx 0-xxxxx,
Xxxxxx-xx Xxxxx, 000 Xxxxx
Attn: Xxxxx Xxxx
Fax: 00-000-0000
with a copy to:
Xxxxxx & Xxxxx
000 Xxxxxx Xxx
Xxxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
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If to StorMedia:
StorMedia Incorporated
000 Xxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxx X. X'Xxxxx
Fax: 000-000-0000
or in accordance with any subsequent written direction from either party
to the other. All such notices and other communications shall, except as
otherwise expressly herein provided, be effective when received; or in
the case of delivery by messenger or overnight delivery service, when
left at the appropriate address.
(b) Nonwaiver. No failure or delay on StorMedia's part in
exercising any right hereunder shall operate as a waiver thereof or of
any other right nor shall any single or partial exercise of any such
right preclude any other further exercise thereof or of any other right.
(c) Amendments and Waivers. This Guaranty may not be amended
or modified, nor may any of its terms be waived, except by written
instruments signed by Parent and StorMedia. Each waiver or consent under
any provision hereof shall be effective only in the specific instances
for the purpose for which given.
(d) Assignments. This Guaranty shall be binding upon and
inure to the benefit of Company and Guarantor and their respective
successors and assigns; provided, however, that without the prior
written consent of StorMedia, Parent may not assign its rights and
obligations hereunder.
(e) Cumulative Rights, etc. The rights, powers and remedies
of StorMedia under this Guaranty shall be in addition to all rights,
powers and remedies given to StorMedia by virtue of any applicable law,
rule or regulation of any Governmental Authority or the Agreement, all
of which rights, powers, and remedies shall be cumulative and may be
exercised successively or concurrently without impairing StorMedia's
rights hereunder.
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(f) Partial Invalidity. If at any time any provision of this
Guaranty is or becomes illegal, invalid or unenforceable in any respect
under the law or any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of this Guaranty nor the
legality, validity or enforceability of such provision under the law of
any other jurisdiction shall in any way be affected or impaired thereby.
(g) Governing Law. This Guaranty shall be governed by and
construed in accordance with the laws of the State of California without
reference to conflicts of law rules.
(h) Jury Trial. EACH OF PARENT AND STORMEDIA, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY.
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IN WITNESS WHEREOF, the parties have caused this Guaranty to be executed
as of the day and year first above written.
KUBOTA CORPORATION
By: /s/ XXXXX XXXX
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Name: Xxxxx Xxxx
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Title: Manager
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STORMEDIA INCORPORATED
By:
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Xxxxxxx X. Xxxxx
Chief Executive Officer
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IN WITNESS WHEREOF, the parties have caused this Guaranty to be executed
as of the day and year first above written.
KUBOTA CORPORATION
By:
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Name:
Title:
STORMEDIA INCORPORATED
By: /s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
Chief Executive Officer
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