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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 6, 1998
LSI LOGIC CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 0-11674 94-2712976
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(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
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1551 MCCARTHY BOULEVARD
MILPITAS, CALIFORNIA 95035
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(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(408) 433-8000
NOT APPLICABLE
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 6, 1998, the Registrant acquired from Hyundai Electronics
America, a California corporation ("HEA"), all of the outstanding capital stock
of Symbios, Inc. ("Symbios"), a Delaware corporation and the wholly-owned
subsidiary of HEA. The transaction was completed pursuant to (i) the Stock
Purchase Agreement, dated as of June 28, 1998, by and among the Registrant, HEA,
and Hyundai Electronics Industries Co., Ltd., a corporation incorporated under
the laws of the Republic of Korea ("HEI") and the parent of HEA and (ii) the
First Amendment to Stock Purchase Agreement, dated as of August 6, 1998, by and
among Registrant, HEA and HEI. As a result of the transaction, Symbios is now a
wholly-owned subsidiary of the Registrant.
The Registrant paid approximately $760 million in cash for all of the
outstanding capital stock of Symbios, which included the assumed liabilities of
Symbios. In addition, the Registrant assumed all of the options outstanding
under Symbios' 1995 Stock Plan. The Registrant funded the purchase through a
combination of cash revenues and credit facilities by and among the Registrant,
LSI Logic Japan Semiconductor, Inc., a wholly-owned subsidiary of Registrant
("LLJS"), ABN AMRO Bank N.V., as agent for the syndicate of lenders ("ABN
AMRO"), and a syndicate of lenders to be determined by ABN AMRO (the "Lenders"),
pursuant to the Credit Agreement, dated as of August 5, 1998, by and among the
Registrant, LLJS, ABN AMRO and the Lenders. The transaction will be accounted
for as a purchase.
Symbios designs, manufactures and markets client/server integrated
circuits, cell-based application specific integrated circuits, host adapter
boards and storage subsystems. The Registrant intends for Symbios to continue
these operations.
The information that is set forth in the Registrant's Press Release
dated August 7, 1998 is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
It is impracticable for the registrant to provide the required
financial statements for the business acquired at the time of filing this
report, but the registrant will file such required financial statements, if
required pursuant to this item and Rule 3-05(b) of Regulation S-X, by amendment
to this report as soon as practicable, but not later than sixty days after this
report was required to be filed initially.
(b) Pro Forma Financial Information.
It is impracticable for the registrant to provide the required
pro forma information for the business acquired at the time of filing this
report, but the registrant will file such required pro forma information, if
required pursuant to this item and Article 11 of Regulation S-X, by amendment to
this report as soon as practicable, but not later than sixty days after this
report was required to be filed initially.
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(c) Exhibits.
2.1 Stock Purchase Agreement, dated as of June 28, 1998, by
and among the Registrant, HEA and HEI.
2.2 First Amendment to Stock Purchase Agreement, dated as of
August 6, 1998, by and among Registrant, HEA and HEI.
10.42 Credit Agreement, dated as of August 5, 1998, by and
among Registrant, LLJS, ABN AMRO and Lenders.
99.1 Text of Press Release, dated as of August 7, 1998.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LSI LOGIC CORPORATION
A Delaware Corporation
Dated: August 21, 1998 By: /s/ R. Douglas Norby
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R. Douglas Norby
Executive Vice President, Finance
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description
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2.1 Stock Purchase Agreement, dated as of June 28, 1998, by and
among the Registrant, HEA and HEI.
2.2 First Amendment to Stock Purchase Agreement, dated as of
August 6, 1998, by and among Registrant, HEA and HEI.
10.42 Credit Agreement, dated as of August 5, 1998, by and among
Registrant, LLJS, ABN AMRO and Lenders.
99.1 Text of Press Release, dated August 7, 1998.
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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
dated as of June 28, 1998
by and among
LSI LOGIC CORPORATION,
HYUNDAI ELECTRONICS INDUSTRIES CO., LTD.
and
HYUNDAI ELECTRONICS AMERICA
with respect to all
outstanding capital stock of
SYMBIOS, INC.
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ARTICLE I DEFINITIONS...................................................................................1
1.1 Definitions...................................................................................1
ARTICLE II SALE OF SHARES AND CLOSING...................................................................10
2.1 Purchase and Sale............................................................................10
2.2 Purchase Price...............................................................................10
2.3 Post-Closing Adjustment......................................................................10
2.4 Closing......................................................................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT..........................................12
3.1 Corporate Existence of Parent and Seller.....................................................12
3.2 Authority....................................................................................12
3.3 Corporate Existence of the Company...........................................................13
3.4 Capital Stock................................................................................13
3.5 Subsidiaries.................................................................................14
3.6 No Conflicts.................................................................................14
3.7 Governmental Approvals and Filings...........................................................15
3.8 Financial Statements and Condition; Absence of Changes.......................................15
3.9 Taxes........................................................................................18
3.10 Legal Proceedings............................................................................18
3.11 Compliance With Laws and Orders..............................................................19
3.12 Benefit Plans; ERISA.........................................................................19
3.13 Real Property................................................................................19
3.14 Adequacy of Assets...........................................................................20
3.15 Tangible Personal Property...................................................................20
3.16 Intellectual Property Rights.................................................................20
3.17 Contracts....................................................................................21
3.18 Permits and/or Approvals.....................................................................23
3.19 Affiliate Transactions.......................................................................23
3.20 Environmental Matters........................................................................23
3.21 Accounts Receivable; Inventory...............................................................24
3.22 Insurance....................................................................................25
3.23 Disclosure...................................................................................25
3.24 Product Liability Claims.....................................................................25
3.25 Brokers: Finders.............................................................................25
3.26 No Other Representations.....................................................................25
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER..................................................26
4.1 Corporate Existence of Purchaser.............................................................26
4.2 Authority....................................................................................26
4.3 No Conflicts.................................................................................26
4.4 Governmental Approvals and Filings...........................................................27
4.5 Legal Proceedings............................................................................27
4.6 Purchase for Investment......................................................................27
4.7 Financing....................................................................................27
4.8 No Other Representations.....................................................................27
ARTICLE V COVENANTS OF PARENT AND SELLER...............................................................28
5.1 Regulatory and Other Approvals...............................................................28
5.2 Tax Sharing Agreement........................................................................28
5.3 Investigation by Purchaser...................................................................28
5.4 Financial Statements and Reports.............................................................29
5.5 Conduct of Business..........................................................................29
5.6 Certain Restrictions.........................................................................29
5.7 Affiliate Transactions.......................................................................31
5.8 Fulfillment of Conditions....................................................................31
5.9 Litigation...................................................................................32
5.10 Agreement Not to Solicit.....................................................................32
5.11 Insurance....................................................................................32
5.13 Exclusivity..................................................................................32
5.14 Option Exercises.............................................................................33
5.15 Options......................................................................................33
5.16 Transaction Structure........................................................................33
5.17 Assumption of Various Employment Arrangements................................................33
5.18 Purchase of Christ Note......................................................................33
ARTICLE VI COVENANTS OF PURCHASER.......................................................................34
6.1 Regulatory and Other Approvals...............................................................34
6.2 Fulfillment of Conditions....................................................................34
6.3 Release of Guarantees........................................................................34
6.4 Change of Name...............................................................................34
6.5 Indemnification of Directors and Officers....................................................35
ARTICLE VII ADDITIONAL AGREEMENTS........................................................................35
7.1 Stock Plans and Options......................................................................35
7.2 Symbios Employees............................................................................36
7.3 Ancillary Agreement..........................................................................37
7.4 Certain Actions..............................................................................37
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ARTICLE VIII CONDITIONS TO OBLIGATIONS OF THE PARTIES.....................................................38
8.1 Obligations of Both Parties..................................................................38
8.2 Obligations of Purchaser.....................................................................38
8.3 Obligations of Seller........................................................................40
ARTICLE IX INDEMNIFICATION..............................................................................41
9.1 Survival of Representations and Warranties; Indemnification Period...........................41
9.2 Indemnification by Parent and Seller.........................................................41
9.3 Limitation of Seller's Liability.............................................................42
9.4 Indemnification by Purchaser.................................................................42
9.5 Limitation of Purchaser's Liability..........................................................42
9.6 Defense of Third Party Claims................................................................43
9.7 Procedure and Dispute Resolution.............................................................44
9.8 Arbitration..................................................................................44
9.9 Adjustment to Purchase Price.................................................................45
9.10 Additional Environmental Matters.............................................................45
ARTICLE X TERMINATION..................................................................................46
10.1 Termination..................................................................................46
10.2 Effect of Termination........................................................................47
10.3 Termination and Nonconsummation Fees.........................................................47
ARTICLE XI TAX MATTERS..................................................................................48
11.1 Section 338 Election.........................................................................48
11.2 Returns; Indemnification; Liability for Taxes................................................48
11.3 Refunds and Credits..........................................................................49
11.4 Termination of Tax Sharing Agreements........................................................50
11.5 Conduct of Audits and Other Procedural Matters...............................................50
11.6 Assistance and Cooperation...................................................................50
11.7 FIRPTA Certificate...........................................................................51
ARTICLE XII MISCELLANEOUS................................................................................51
12.1 Notices......................................................................................51
12.2 Entire Agreement.............................................................................52
12.3 Expenses.....................................................................................52
12.4 Public Announcements.........................................................................52
12.5 Confidentiality..............................................................................53
12.6 Further Assurances; Post-Closing Cooperation.................................................54
12.7 Waiver.......................................................................................54
12.8 Amendment....................................................................................55
12.9 No Third Party Beneficiary...................................................................55
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12.10 No Assignment; Binding Effect................................................................55
12.11 Invalid Provisions...........................................................................55
12.12 Governing Law................................................................................55
12.13 Counterparts.................................................................................55
12.14 Construction.................................................................................55
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This STOCK PURCHASE AGREEMENT, dated as of June 28, 1998, is made and
entered into by and among LSI Logic Corporation, a Delaware corporation
("Purchaser"), Hyundai Electronics Industries Co., Ltd. ("Parent"), and Hyundai
Electronics America, a California corporation ("Seller"). Capitalized terms not
otherwise defined herein have the meanings set forth in Section 1.1.
WHEREAS, Seller owns thirty-three million nine hundred ninety-nine
thousand nine hundred ninety-nine (33,999,999) shares of convertible Series A
Preferred Stock, par value ten cents ($0.10) per share, and one (1) share of
Common Stock, par value two cents ($0.02) per share, of Symbios, Inc. a Delaware
corporation ("Symbios" or the "Company"), constituting all of the issued and
outstanding shares of capital and voting stock of the Company as of the date
hereof (such shares being referred to herein as the "Shares"); and
WHEREAS, Seller desires to sell, and Purchaser desires to purchase, the
Shares on the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Definitions.
(a) Defined Terms. As used in this Agreement, the following
defined terms have the meanings indicated below:
"AAA" has the meaning assigned in Section 9.8.
"Acquisition" has the meaning assigned in Section 11.1.
"Acquisition Allocation Schedule" has the meaning assigned in Section
11.1(b).
"Actions" or "Proceedings" means any action, suit, proceeding, arbitration
or Governmental or Regulatory Authority investigation.
"Affiliate" means any person that directly, or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with the person specified.
"Ancillary Agreements" means the agreements to implement the transfer and
license of certain Intellectual Property rights, on the terms set forth in the
Intellectual Property Term Sheet
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attached hereto as Exhibit A, substantially in the form of that Termination and
License Agreement dated as of February 25, 1998 by and among Parent, Seller and
the Company with such further modifications, consistent with the aforesaid Term
Sheet as Seller and Purchaser shall mutually, reasonably and in good faith agree
upon.
"Assumed Option" has the meaning assigned in Section 7.1.
"Balance Sheet" has the meaning assigned in Section 3.8((a)).
"Benefit Plan" means any Plan established by the Company or any of its
subsidiaries or any predecessor or Affiliate of any of the foregoing which the
Company or any of its subsidiaries maintains, or to which the Company or any of
its subsidiaries contributes or has contributed or under which any employee,
officer, former employee or director of the Company or any of its subsidiaries
or any beneficiary thereof is covered, is eligible for coverage or has benefit
rights.
"Best Efforts" means that the obligated party is required to make a
commercially reasonable, diligent, expeditious and good-faith effort to
accomplish the applicable objective. Such obligation, however, does not require
any extraordinary expenditure of funds or the incurrence of any significant
liability on the part of the obligated party. The fact that the objective is not
actually accomplished does not, without more, establish that the obligated party
did not in fact utilize its Best Efforts in attempting to accomplish the
objective.
"Bridge Loan" has the meaning assigned in the definition of "Bridge
Transactions."
"Bridge Transactions" means (i) the bridge loan and revolving credit
facility established by Seller and the Company with Lehman Brothers and certain
other parties, any increase in the amount thereof after the date hereof, and all
borrowings and other transactions thereunder (the "Bridge Loan"), and (ii) each
related upstream loan (the "Upstream Bridge Loan") to Seller or any of its
Affiliates by the Company.
"Business Day" means a day that is not a Saturday, a Sunday or a statutory
or civic holiday in the State of California or the Republic of Korea, or any
other day on which the principal offices of either Seller or Purchaser are
closed or become closed prior to 2 p.m. local time whether in accordance with
established company policy or as a result of unanticipated events, including
adverse weather conditions.
"Capital Budget" means the Company's capital expenditure budget heretofore
provided to Purchaser.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder.
"CERCLIS" means the Comprehensive Environmental Response and Liability
Information System, as provided by 40 C.F.R. Section 300.5.
"Claim Notice" has the meaning assigned in Section 9.7(a).
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"Closing" has the meaning assigned in Section 2.4.
"Closing Balance Sheet" has the meaning assigned in Section 2.3((a)).
"Closing Date" has the meaning assigned in Section 2.4.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Common Stock" has the meaning assigned in Section 3.4.
"Company" has the meaning assigned in the forepart of this Agreement.
"Company Facilities" means any real property owned or leased at any time
by the Company (including the land and improvements thereon) or its predecessors
in interest and used in the Company's business as conducted by the Company or
any predecessor prior to the Closing Date.
"Company Intellectual Property" means any Intellectual Property that is
owned by or exclusively licensed to the Company or its subsidiaries.
"Company Tax Returns" has the meaning assigned in Section 11.2(a).
"Continuing Environmental Conditions" means (i) any Release of any
Hazardous Material that occurred at any time on or before the Closing Date and
which Release continues to occur after the Closing Date from any pipes,
conduits, structures, equipment or other improvements which are on or originate
from the Company Facilities, to the extent any of the foregoing are concealed
within or below the improvements, foundation, paving, or subsurface soils on, or
originate from any Company Facilities; (ii) any Pre-Existing Contamination
present on or originating from the Company Facilities as of the Closing Date
which continues to be present on or originate from the Company Facilities after
the Closing Date, and (iii) any violation of an Environmental Requirement
applicable to the Pre-Closing Hazardous Material Activities conducted on the
Company Facilities which occurs on or before the Closing Date and which
continues to occur after the Closing Date.
"Contract" means any written or oral contract, agreement or understanding
between two or more parties.
"CPA Firm" has the meaning assigned in Section 2.3((b)).
"Defined Benefit Plan" means each Benefit Plan which is subject to Part 3
of Title I of ERISA, Section 412 of the Code or Title IV of ERISA.
"Director Options" has the meaning assigned in Section 3.4((a)).
"Director Plan" means the 1995 Director Restricted Stock Plan of the
Company.
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"Disclosure Schedule" has the meaning assigned in the forepart of Article
III.
"Election" has the meaning assigned in Section 11.1.
"Encumbrances" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge, option, encumbrance, restriction or
other encumbrance of any kind, or any conditional sale contract, title retention
contract or other contract to give any of the foregoing.
"Environmental Claim" means any notice, claim, act, cause of action or
investigation by any Third Party alleging potential liability (including
potential liability for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages, personal injuries
or penalties) arising out of, based on or resulting from (A) the presence in the
environment, or Release of, any Hazardous Material or (B) any violation, or
alleged violation, of any Environmental Requirement.
"Environmental Covenants" has the meaning assigned in Section 9.10.
"Environmental Requirement" means any statute, enactment, administrative
agency rule or promulgation, regulation, ordinance, or other law, Order and any
legally binding covenants, agreements, or Permits and/or Approvals, covenants or
conditions relating to the regulation or protection of human health, safety or
the environment or to emissions, discharges, generation, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes into the environment (including, without
limitation, ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of any
Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Excess Payment" has the meaning assigned in Section 2.4.
"Exchange Ratio" has the meaning assigned in Section 7.1(a).
"Final Net Asset Value" has the meaning assigned in Section 2.3((b)).
"Financial Statements" means the consolidated financial statements of the
Company and its consolidated subsidiaries delivered to Purchaser pursuant to
Section 3.8 or Section 5.4.
"Financial Statement Date" means May 24, 1998.
"Fully Diluted Per-Share Purchase Price" means the quotient obtained by
dividing (i) the Purchase Price by (ii) the number of shares that would be
outstanding immediately prior to the Closing if all then-outstanding options,
warrants and other rights to purchase Company capital stock were exercised in
full.
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"GAAP" means United States generally accepted accounting principles,
consistently applied throughout the specified period and in the immediately
prior comparable period.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"Hazardous Material" means (i) any petroleum or petroleum products,
flammable explosives, radioactive materials, asbestos, urea formaldehyde foam
insulation and polychlorinated biphenyls (PCBs); (ii) any chemicals or other
materials or substances which are now or hereafter become defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants" or words of similar import under any
Environmental Requirement; and (iii) any chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated by any Governmental or Regulatory Authority under any Environmental
Requirement.
"HSR Act" means Section 7A of the Clayton Act (Title II of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.
"Indebtedness" of any person means all obligations of such person (i) for
borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases and (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other person. "Indemnity
Claim" has the meaning assigned in Section 9.7(a).
"IRS" means the United States Internal Revenue Service.
"Intellectual Property" means any or all of the following and all rights
in, arising out of, or associated therewith: (i) all United States and foreign
patents and applications therefor and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part thereof; (ii)
all inventions (whether patentable or not), invention disclosures, improvements,
trade secrets, proprietary information, know how, technology, technical data and
customer lists, and all documentation relating to any of the foregoing; (iii)
all copyrights, copyrights registrations and applications therefor and all other
rights corresponding thereto throughout the world; (iv) all mask works, mask
work registrations and applications therefor; (v) all industrial designs and any
registrations and applications therefor throughout the world; (vi) all trade
names, logos, common law trademarks and service marks; trademark and service
mark registrations and applications therefor and all goodwill associated
therewith throughout the world; (vii) all databases and data collections and all
rights therein throughout the world; and (viii) all computer software including
all source code, object code, firmware, development tools, files, records and
data, all media on which any of the foregoing is recorded, all Web addresses,
sites and domain names, and (ix) any
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similar, corresponding or equivalent rights to any of the foregoing and (x) all
documentation related to any of the foregoing.
"Knowledge of Seller" means the actual conscious knowledge of the
executive officers of the Company, except that, with respect to Section 3.16
hereof, "Knowledge of Seller" means the actual conscious knowledge of the
executive officers of the Company or Seller.
"Knowledge of Purchaser" means the actual conscious knowledge of the
executive officers of Purchaser.
"Liabilities" means all Indebtedness, obligations and other liabilities of
a person (whether absolute, accrued, contingent, asserted, unasserted, fixed or
otherwise, or whether due or to become due).
"Loss" or "Losses" means any and all damages, fines, penalties,
deficiencies, losses, judgments, costs and expenses (including interest, court
costs, reasonable fees of attorneys, accountants and other experts) and other
reasonable expenses of litigation or other proceedings with respect to any
claim, default or assessment.
"Material Adverse Effect" with respect to any person means a material
adverse effect on the business, financial condition, assets, properties,
operations or results of operations of such person and any subsidiaries of such
person taken as a whole; provided, however, that a "Material Adverse Effect"
shall not be deemed to have occurred solely as a result of any of the following
(or any combination of the following): (i) any effect or change occurring as a
result of (A) general economic or financial conditions or (B) other developments
which are not unique to such person and its subsidiaries but also affect other
persons who participate or are engaged in the lines of business in which such
person and its subsidiaries participate or are engaged; (ii) any change in or
effect on the business or financial condition or performance of the Company and
its subsidiaries following the date of this Agreement resulting from employee
attrition directly attributable to an announcement by Purchaser with respect to
the operation of the Company, or a delay of, reduction in or cancellation or
change in the terms of purchases from or other transactions with the Company or
any of its subsidiaries, in each case directly attributable to the pendency or
announcement of this Agreement or the transactions contemplated hereby; and
(iii) failure in itself, but not any cause thereof, of the Company's and its
subsidiaries' results of operations to meet any internal or external
predictions, projections, estimates or expectations.
"NPL" means the National Priorities List under CERCLA.
"Net Asset Value" has the meaning assigned in Section 2.3(a).
"Notice of Disagreement" has the meaning assigned in Section 2.3(a).
"Operative Documents" has the meaning assigned in Section 3.13(b).
"Order" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether preliminary
or final).
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"Parent" means Hyundai Electronics Industries Co., Ltd.
"Payment Amount" has the meaning assigned in Section 2.4.
"Pension Benefit Plan" means each Benefit Plan which is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA.
"Permits and/or Approvals" means all permits, licenses, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted or issued by any Governmental or Regulatory Authority.
"Permitted Encumbrance" means any of the following: (i) any Encumbrance
for Taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings (which proceedings have been disclosed to Purchaser) for
which adequate reserves have been established on the Balance Sheet in accordance
with GAAP, (ii) any statutory Encumbrance arising in the ordinary course of
business by operation of law with respect to a Liability shown on the Balance
Sheet or permitted under this Agreement that is not yet due or delinquent, (iii)
any minor non-monetary imperfection of title or similar non-monetary Encumbrance
which individually or in the aggregate with other Encumbrances could not
reasonably be expected to have a material adverse effect on the transferability,
financeability, ownership, leasing, use, development, occupancy or operation of
any property; and (iv) except immediately after the Closing, any Encumbrance in
connection with any of the Bridge Transactions. Notwithstanding the foregoing,
"Permitted Encumbrance" shall not in any event include in the case of clauses
(i), (ii) and (iii) any mortgage, deed of trust, conditional sale or similar
title retention agreement, any option or right to lease or occupy, any purchase
right or option to purchase, or any monetary liens (including, without
limitation, mechanics', materialmen's, or other statutory liens.)
"Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, funded or unfunded, including, but not
limited to, any "employee benefit plan" within the meaning of Section 3(3) of
ERISA.
"Post-Closing Benefits" has the meaning assigned in Section 7.2((c)).
"Pre-Closing Hazardous Material Activities" means the transportation,
transfer, recycling, storage, use, handling, treatment, manufacture, removal,
investigation, remediation, Release, sale, or distribution of any Hazardous
Material, or any product or waste containing a Hazardous Material, conducted on
any Company Facilities prior to the Closing Date or otherwise occurring prior to
the Closing Date in connection with or to benefit the business of the Company.
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"Pre-Closing Hazardous Materials Disposal Facility" means any transporter,
recycler, incinerator, or disposal facility to whom or at which Hazardous
Material waste, generated at any Company Facility or in the course of any
Pre-Closing Hazardous Material Activity, have been or will be directly or
indirectly transported, delivered or otherwise transferred.
"Pre-Closing Period" has the meaning assigned in Section 11.2(a).
"Pre-Existing Contamination" means the presence on or before the Closing
Date of any Hazardous Material in the soil, groundwater, surface water, air or
building materials of any Pre-Closing Hazardous Materials Disposal Facility or
any Company Facilities.
"Pre-Existing/Continuing Environmental Liabilities" means any Actions,
Proceedings, liability, Loss or claim, including without limitation the cost or
expense of fulfilling any Environmental Requirement, duty to investigate,
remediate, remove, or take other action with respect to Hazardous Material, or
duty to indemnify, defend or reimburse any Third Party with respect to (i)
Pre-Existing Contamination; (ii) Continuing Environmental Conditions; (iii) the
migration at any time prior to or after the Closing Date of Pre-Existing
Contamination to any other real property, or the soil, groundwater, surface
water, air or building materials thereof, (iv) any Pre-Closing Hazardous
Material Activities; (v) the exposure of any person to Pre-Existing
Contamination or to a Hazardous Material in the course of or as a consequence of
any Pre-Closing Hazardous Material Activities, without regard to whether any
health effect of the exposure has been manifested as of the Closing Date; (vi)
the violation of any Environmental Requirement by the Company or its agents,
employees, predecessors in interest, contractors, invitees or licensees prior to
the Closing Date or in connection with any Pre-Closing Hazardous Material
Activities prior to the Closing Date; and (vii) any Actions or Proceedings
brought or threatened by any Third Party with respect to any of the foregoing.
"Preferred Stock" has the meaning assigned in Section 3.4.
"Proceedings" has the meaning assigned in Section 11.5.
"Purchase Price" has the meaning assigned in Section 2.2.
"Purchaser" has the meaning assigned in the first paragraph of this
Agreement.
"Purchaser Common Stock" means the common stock, par value $0.01 per
share, of Purchaser.
"Qualified Plan" means each Benefit Plan which is intended to qualify
under Section 401 of the Code.
"Release" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including, without limitation, the movement of Hazardous
Materials through air, soil, surface water, ground water, wetlands, land or
subsurface strata.
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"Representatives" has the meaning assigned in Section 5.3.
"Seller" has the meaning assigned in the forepart of this Agreement.
"Shares" has the meaning assigned in the forepart of this Agreement.
"Stock Plan" means the 1995 Stock Plan of the Company.
"Straddle Period" has the meaning assigned in Section 11.2(a).
"Symbios" has the meaning assigned in the forepart of this Agreement.
"Symbios Stock Option" has the meaning assigned in Section 7.1(a).
"Tax Returns" means a report, return or other information required to be
supplied to a governmental entity with respect to Taxes including combined or
consolidated returns for any group of entities that includes the Company or any
of its subsidiaries.
"Tax Sharing Agreement" means that certain Tax Allocation Agreement, dated
July 21, 1995, by and among Parent, Seller and other Parent direct or indirect
subsidiaries, as amended or proposed to be amended, through the date hereof.
"Taxes" means any federal, state, county, local or foreign taxes, charges,
fees, levies, or other assessments, including all net income, gross income,
sales and use, ad valorem, transfer, gains, profits, excise, franchise, real and
personal property, gross receipt, capital stock, production, business and
occupation, disability, employment, payroll, license, estimated, stamp, custom
duties, severance or withholding taxes or charges imposed by a governmental
entity, and includes any interest and penalties (civil or criminal) on or
additions to any such taxes and any expenses incurred in connection with the
determination, settlement or litigation of any tax liability.
"Third Party" means any person (including, but not limited to, a
Governmental or Regulatory Authority) not an Affiliate of the other referenced
person or persons.
"Third-Party Claim" has the meaning assigned in Section 9.6(a).
"Trigger Date" has the meaning assigned in Section 10.3(a).
"Upstream Bridge Loan" has the meaning assigned in the definition of
"Bridge Transactions."
(b) Construction of Certain Terms and Phrases. Unless the context
of this Agreement otherwise requires: (i) words of any gender include each other
gender; (ii) words using the singular or plural number also include the plural
or singular number, respectively; (iii) the terms "hereof," "herein," "hereby"
and derivative or similar words refer to this entire Agreement; (iv) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement; (v) the phrase "ordinary course of business" refers to the business
of the Company
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and its subsidiaries; (vi) whenever the words "include," "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation;" (vii) the phrase "made available" shall mean
that the information referred to has been made available if requested by the
party to whom such information is to be made available; (viii) whenever this
Agreement refers to a number of days, such number shall refer to calendar days
unless Business Days are specified; (ix) the phrases "the date of this
Agreement," "the date hereof," and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to June 28, 1998; (x) all
accounting terms used herein and not expressly defined herein shall have the
meanings given to them under GAAP; (xi) any representation or warranty contained
herein as to the enforceability of a Contract shall be subject to the effect and
limitations of any bankruptcy, insolvency, reorganization, moratorium or other
similar law affecting the enforcement of creditors' rights generally and to
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and (xii) the table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
ARTICLE II
SALE OF SHARES AND CLOSING
2.1 Purchase and Sale. Seller agrees to sell to Purchaser, and Purchaser
agrees to purchase from Seller, all of the right, title and interest of Seller
in and to the Shares at the Closing on the terms and subject to the conditions
set forth in this Agreement.
2.2 Purchase Price. The aggregate purchase price for the Shares is Seven
Hundred Twenty-Two Million Seven Hundred Thousand Dollars ($722,700,000) minus
the Excess Payment, if any, payable in lawful money of the United States in
immediately available funds (the "Purchase Price") at the Closing in the manner
provided in Section 2.4.
2.3 Post-Closing Adjustment.
(a) As soon as practicable (but in no event later than forty-five
(45) days) after the Closing Date, Purchaser shall deliver to Seller an audited
balance sheet for the Company as of the Closing Date (the "Closing Balance
Sheet") which shall be prepared (i) in accordance with GAAP as in effect on the
date of such preparation and (ii) in a manner consistent with the Company's
accounting policies used in the preparation of the Balance Sheet. The amount by
which the assets set forth on the Closing Balance Sheet exceed the liabilities
set forth on the Closing Balance Sheet (excluding any Indebtedness under the
Bridge Loan) shall be referred to herein as the "Net Asset Value."
(b) The Closing Balance Sheet shall become final and binding on
Seller and Purchaser unless Seller gives written notice of its disagreement (a
"Notice of Disagreement") to Purchaser within thirty (30) days following receipt
by Seller of the Closing Balance Sheet. Any
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such Notice of Disagreement shall specify in reasonable detail the nature of any
disagreement so asserted. If Seller and Purchaser are unable to resolve all of
their disagreements with respect to the Closing Balance Sheet within ten (10)
days following the completion of Purchaser's review of the Notice of
Disagreement, they shall refer their remaining differences to an internationally
recognized firm of independent public accountants as to which Seller and
Purchaser mutually agree (the "CPA Firm"), which shall, acting as experts and
not as arbitrators, determine, and only with respect to the remaining
differences so submitted, whether and to what extent, if any, Net Asset Value as
set forth in the Closing Balance Sheet requires adjustment; provided, however,
that no such adjustment shall exceed the maximum adjustment claimed in the
Notice of Disagreement. Seller and Purchaser shall direct the CPA firm to use
its best efforts to render its determination within forty-five (45) days after
the date the CPA firm is selected. The CPA Firm's determination shall be
conclusive and binding upon Purchaser and Seller. The fees and disbursements of
the CPA Firm shall be shared equally by Purchaser and Seller. The amount of Net
Asset Value that becomes final and binding on Purchaser and Seller under this
Section 2.3((b)) shall be referred to herein as the "Final Net Asset Value."
(c) Promptly following the determination of the Final Net Asset
Value, the Purchase Price shall be adjusted as follows (and payment will be made
by Purchaser or Seller, as the case may be, as provided below, not later than
five (5) Business Days following such determination):
(i) If the Final Net Asset Value is less than Four Hundred
Fifteen Million One Hundred Fifty-One Thousand Dollars ($415,151,000) minus the
Excess Payment, if any, then Seller shall pay to Purchaser the amount of such
deficiency; and
(ii) If the Final Net Asset Value is greater than Four
Hundred Fifteen Million One Hundred Fifty-One Thousand Dollars ($415,151,000)
minus the Excess Payment, if any, then Purchaser shall pay to Seller the amount
of such excess.
The Closing Balance Sheet shall not include any Liabilities of the Company paid
or assumed by Seller pursuant to Sections 5.15 or 5.17 of this Agreement except
to the extent that such Liabilities are reflected in the Balance Sheet. In
calculating the adjustment provided by this Section 2.3(c), it is the intention
of the parties to avoid double-counting of items which would result in an
inequitable and unintended benefit to one party or parties to the detriment of
the other party or parties.
2.4 Closing. The closing of the purchase and sale of the Shares (the
"Closing") will take place at the offices of Gray Cary Ware & Freidenrich LLP,
400 Hamilton Avenue, Palo Alto, California, or at such other place as Purchaser
and Seller mutually agree, at 10 a.m. local time on the second Business Day
after the day on which the last of the closing conditions set forth in Article
VIII has been satisfied or waived, or such other date as Purchaser and Seller
mutually agree upon in writing (the "Closing Date"). Simultaneously with the
Closing the following will occur: (a) Purchaser will pay the Purchase Price, in
full, by wire transfer of immediately available funds to such account as Seller
may reasonably direct by written notice delivered to Purchaser by Seller; (b)
all Indebtedness owing to the Company under the Upstream
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Bridge Loan (including any new advances permitted by this Agreement) shall be
repaid to the Company by Seller; (c) Seller shall reimburse the Company for all
obligations and expenses incurred by the Company with respect to the Bridge
Transactions which are not reflected in the May 24, 1998 Financial Statements
delivered pursuant to Section 3.8(a); (d) Purchaser shall either contribute to
the Company additional capital or loan to the Company immediately available
funds in an amount sufficient, together with the Upstream Bridge Loan repayment
and the amount of cash on hand on the books of the Company immediately prior to
the Closing, to permit repayment of the Bridge Loan in full (the "Payment
Amount"), provided that if the Payment Amount exceeds Forty-Four Million Dollars
($44,000,000)), the Purchase Price (and as a result, the cash amount payable to
Seller) shall be reduced by an amount equal to the amount by which the Payment
Amount exceeds $44,000,000 (the "Excess Payment"); (e) the Company shall repay
the Indebtedness then owing to the lender(s) under the Bridge Loan; and (f)
Seller will assign and transfer to Purchaser good and valid title in and to the
Shares, free and clear of all Encumbrances (other than Encumbrances created or
suffered to exist by Purchaser), by delivering to Purchaser certificates
representing the Shares, duly endorsed in blank or accompanied by duly executed
stock powers endorsed in blank. At the Closing, there shall also be delivered to
Seller and Purchaser the opinions, and certificates and other documents and
instruments to be delivered pursuant to Article VIII.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT
Except as set forth in the disclosure schedule of Seller delivered to
Purchaser herewith (the "Disclosure Schedule"), Seller and Parent hereby jointly
and severally represent and warrant to Purchaser that on the date hereof and
shall on the Closing Date represent and warrant to Purchaser that on the Closing
Date, except for changes permitted or required by this Agreement), as follows:
3.1 Corporate Existence of Parent and Seller. Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of California. Parent is a corporation duly incorporated, validly existing
and in good standing under the laws of the Republic of Korea. Seller and Parent
have full corporate power and authority to execute and deliver this Agreement
and the Ancillary Agreements to which they are a party and to perform their
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. Seller has delivered to Purchaser or its
counsel correct and complete copies of the charter documents of the Company and
each subsidiary of the Company, each as amended to the date of this Agreement
and will deliver the charter documents of Seller and Parent prior to Closing.
None of the subsidiaries of the Company owns any capital stock or other voting
securities of, or any other direct or indirect equity interest in, any firm,
corporation or other entity (including any joint venture or partnership).
3.2 Authority. The execution and delivery by Seller and Parent of this
Agreement and the Ancillary Agreements to which they are a party, and the
performance by Seller and Parent of
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their obligations hereunder and thereunder, have been duly and validly
authorized by the Board of Directors of Seller and Parent, no other corporate
action on the part of Seller, Parent or their respective shareholders being
necessary. This Agreement has been duly and validly executed and delivered by
Seller and Parent and constitutes, and upon the execution and delivery by Seller
and Parent of the Ancillary Agreements to which it is a party, such Ancillary
Agreements will constitute, legal, valid and binding obligations of Seller
and/or Parent as the case may be, enforceable against Seller and/or Parent in
accordance with their terms.
3.3 Corporate Existence of the Company. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, and has full corporate power and authority to conduct its
business as and to the extent now conducted and to own, use and lease its assets
and properties. The Company is duly qualified, licensed or admitted to do
business and is in good standing in those jurisdictions in which the ownership,
use or leasing of its assets and properties makes such qualification, licensing
or admission necessary, except where the failure to be so qualified, licensed or
admitted and in good standing could not reasonably be expected to have a
Material Adverse Effect on the Company.
3.4 Capital Stock.
(a) The authorized capital stock of the Company consists of forty
million (40,000,000) shares of common stock of the Company (the "Common Stock"),
and forty million (40,000,000) shares of preferred stock of the Company (the
"Preferred Stock"). As of the date of this Agreement, (i) thirty-three million
nine hundred ninety-nine thousand nine hundred ninety-nine (33,999,999) shares
of Preferred Stock and one (1) share of Common Stock are issued and outstanding,
all of which are validly issued, fully paid and nonassessable; (ii) no shares of
Common Stock or Preferred Stock are held in the treasury of the Company or by
any Subsidiary; (iii) not greater than 3,602,777 shares of Common Stock are
reserved for issuance under the Stock Plan, not greater than 2,812,874 shares of
which are subject to outstanding options of which 252,655 shares are issuable to
directors of the Company upon the exercise of options (the "Director Options")
and 789,903 shares of which are available for future grants; and (iv) 175,000
shares of Common Stock are reserved for issuance under the Director Plan, no
shares of which are subject to outstanding stock purchase rights or restricted
stock purchase agreements and 160,002 shares of which are available for future
grants; provided, however, an additional 164,532 shares are subject to options
which have been agreed upon but not yet granted as of the date of this
Agreement. Section 3.4 of the Disclosure Schedule, which shall be delivered
within ten (10) days after the date hereof, lists each person who is an employee
or consultant of the Company and who holds options (excluding any Director
Options) to acquire shares of Common Stock of the Company as of the date of this
Agreement including: (i) the name of the holder, (ii) the exercise price, (iii)
the vesting schedule, (iv) the number of vested shares at such date, (v) whether
the exercisability of such option will be accelerated as a result of the
transactions contemplated by this Agreement, and (vi) the extent of
acceleration, if any. All outstanding options or warrants to purchase shares of
capital stock of the Company or any securities exchangeable or convertible into
or exercisable for shares of capital stock of the Company that are not Symbios
Stock Options (as defined in Section 7.1) shall terminate at the Closing.
Immediately prior to the Closing, the Director Options shall be terminated and
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canceled, and Seller shall thereupon pay, in accordance with Section 5.15 to
each holder of Director Options a cash amount, in lawful money of the United
States, equal to the product of the number of shares of Company capital stock
purchasable pursuant to such holder's Director Options, multiplied by the
difference between the Fully Diluted Per-Share Purchase Price and the exercise
price of such Director Options. Seller has good and valid title to the Shares,
beneficially and of record, free and clear of all Encumbrances other than
Permitted Encumbrances. At the Closing, the Shares shall constitute all of the
issued and outstanding capital stock of the Company. Except for the Bridge
Transactions, none of Seller, Parent or the Company is a party to, or bound by,
any agreement, instrument or understanding restricting or contemplating the
restriction of the transfer of any of the Shares. There are no voting trusts or
other agreements or understandings to which Seller, the Company or Parent is a
party with respect to the voting of the capital stock of the Company or any of
its subsidiaries. Except for this Agreement and options outstanding pursuant to
the Stock Plan or Director Plan, there are no outstanding options or rights in
favor of any person to purchase shares of any class or series of capital stock
from the Company.
(b) Except for the rights of any lenders or their Affiliates under
the Bridge Transactions: (i) Seller is the sole record and beneficial owner of
the Shares, and the Shares are to be sold pursuant to this Agreement; (ii) the
Shares are not subject to any Encumbrances or any rights of first refusal of any
kind, and neither Seller nor Parent has granted any rights to purchase the
Shares to any other person or entity; and (iii) Seller has the sole right to
transfer the Shares to Purchaser. Subject to Section 5.14, the Shares constitute
all of the capital stock of the Company owned, beneficially or of record, by
Seller and Parent, and neither Seller nor Parent have any other rights to
acquire capital stock of the Company. The delivery of a certificate or
certificates at the Closing representing the Shares in the manner provided in
Section 2.4 will transfer to Purchaser sole record and beneficial ownership of
all outstanding capital stock of the Company, free and clear of all Encumbrances
other than Encumbrances created by Purchaser.
3.5 Subsidiaries. Each subsidiary of the Company is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation identified in Section 3.5 of the Disclosure Schedule, and has full
corporate power and authority to conduct its business as and to the extent now
conducted and to own, use and lease its assets and properties. Each such
subsidiary is duly qualified, licensed and is in good standing in those
jurisdictions in which the ownership, use or leasing of such subsidiary's assets
and properties makes such qualification, licensing or admission necessary,
except where the failure to be so qualified, licensed or admitted and in good
standing could not reasonably be expected to have a Material Adverse Effect on
the Company. All of the outstanding shares of capital stock of each subsidiary
of the Company have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned, directly or indirectly, by the Company or a
subsidiary thereof free and clear of all Encumbrances. There are no outstanding
options or rights in favor of any person to purchase shares of any class or
series of capital stock of any subsidiary of the Company. Section 3.5 of the
Disclosure Schedule sets forth the name and jurisdiction of each subsidiary of
the Company, the number of authorized and outstanding shares of capital stock of
each such subsidiary and a correct and complete list of the holders of record of
each subsidiary's outstanding shares of capital stock.
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3.6 No Conflicts. The execution and delivery by Seller of this Agreement
do not, and the execution and delivery by Seller of the Ancillary Agreements to
which it is a party, the performance by Seller of its obligations under this
Agreement and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby will not (a) conflict with or result in a
violation or breach of the certificate or articles of incorporation or by-laws
of Seller, the Company or any subsidiaries of the Company; (b) subject to
obtaining the consents, approvals and actions, making the filings and giving the
notices described in Section 3.7 and Section 4.4, conflict with or result in a
violation or breach of any law or Order applicable to Seller, the Company, any
subsidiaries of the Company or any of their respective assets and properties
(other than such conflicts, violations or breaches as would occur solely as a
result of the change in identity or the legal or regulatory status of Purchaser
or any of its Affiliates); or (c) (i) conflict with or result in a violation or
breach of, (ii) constitute (with or without notice or lapse of time or both) a
default under, (iii) require Seller, the Company or any of its subsidiaries to
obtain any consent, approval or action of, make any filing with or give any
notice to any person as a result or under the terms of, (iv) result in or give
to any person any right of termination, cancellation, acceleration or
modification in or with respect to, or (v) result in the creation or imposition
of any Encumbrance upon Seller, the Company or any subsidiary of the Company or
any of their respective assets and properties under, any agreement to which
Seller, the Company or any subsidiary of the Company is a party or by which any
of their respective assets or properties is bound.
3.7 Governmental Approvals and Filings. No consent, approval or action
of, filing with or notice to any Governmental or Regulatory Authority on the
part of Seller, the Company or any subsidiary of the Company is required in
connection with the execution, delivery and performance of this Agreement or any
of the Ancillary Agreements to which it is a party or the consummation of the
transactions contemplated hereby or thereby or the continuation by the Company
of its business as presently conducted as a consequence of the Closing, except
(i) the filing of a Notification and Report Form pursuant to the HSR Act and the
expiration or early termination of the waiting period thereunder; (ii) any
required filings under any applicable foreign antitrust, fair trade or other
similar laws and the expiration or termination of waiting periods thereunder;
and (iii) where required solely as a result of the identity or the legal or
regulatory status of Purchaser or any of its Affiliates.
3.8 Financial Statements and Condition; Absence of Changes.
(a) Prior to the execution of this Agreement, Seller has delivered
to Purchaser copies of the unaudited balance sheet of the Company and its
consolidated subsidiaries as of May 24, 1998 (the "Balance Sheet") and the
audited balance sheet of the Company and its consolidated subsidiaries as of
December 31, 1997, and the related unaudited consolidated statements of
operations, shareholders' equity and cash flows for the period beginning January
1, 1998 and ended May 24, 1998 and audited consolidated statements of
operations, shareholders' equity and cash flows for the fiscal year ended
December 31, 1997, together with a true and correct copy of the report on such
audited information by Coopers & Lybrand, L.L.P. Except as set forth in the
notes thereto, all such financial statements were prepared in accordance with
GAAP and fairly present in all material respects the consolidated financial
condition and results
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of operations of the Company and its consolidated subsidiaries as of the
respective dates thereof and for the respective periods covered thereby.
(b) The Company has no Liabilities, except for (i) Liabilities set
forth on the face of the Balance Sheet (or which are disclosed in the footnotes
thereto), (ii) Liabilities which have arisen after the date of the Balance Sheet
in the ordinary course of business and which are not required to be disclosed
pursuant to the terms of Section 3.8((c)) hereof and (iii) payment or
performance obligations arising out of contracts and agreements to which the
Company is a party and which are disclosed pursuant to Section 3.17 hereof or
are not required to be disclosed pursuant to the terms of Section 3.17 hereof.
(c) Since the Financial Statement Date, except as disclosed in
Section 3.8((c)) of the Disclosure Schedule:
(i) the Company has not (i) amended, or agreed to amend, its
charter (or comparable instrument), (ii) merged with or into or consolidated
with, or agreed to merge with or into or consolidate with, any other person, or
(iii) except as reasonably required in connection with the transactions
contemplated by this Agreement or as described elsewhere in this Agreement,
changed, or agreed to change, in any material manner the character of the
business of the Company;
(ii) the Company has conducted its business only in the usual
and ordinary course and in accordance with past practices (except for the
Termination Agreement with Adaptec dated June 24, 1998);
(iii) there has been no change (or series of changes, casualty
or otherwise) in the business, condition (financial or otherwise), results of
operations, assets, Liabilities or earnings of the Company, other than changes
arising in the ordinary course of business consistent with past practice and
experience, none of which changes, individually or in the aggregate, has had or
reasonably could be expected to have a Material Adverse Effect on the Company;
(iv) the Company has not made or promised to make any
increase in any salaries, rates of pay or other compensation or benefits of any
business of its employees, nor has the Company made any accrual for or
commitment or agreement to make or pay the same, nor any payment or commitment
to pay any severance or termination pay to any of the business of its Employees,
except for customary increases and progressions for employees not covered by
collective bargaining agreements, which increases and progressions were made in
the ordinary course of business or in accordance with applicable collective
bargaining agreements or changes in benefits generally provided to all of the
Company's hourly and/or salaried employees;
(v) the Company has not suffered any strike or other labor
trouble, and the Company has not entered into any material agreement or material
negotiation with any labor union or other collective bargaining representative
of any business of its employees;
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(vi) there has been no change or, to the knowledge of Seller,
any threat of any change, in any of the Company's relations with, or any loss of
or, to the knowledge of Seller, threat of loss of, any of the suppliers,
distributors or customers of the business of the Company, or any material
decrease or limitation, of any such supplier's provision of services, supplies
or materials to the Company or any such customer's usage or purchase of services
or products of the Company that, individually or in the aggregate, has had or
reasonably could be expected to have a Material Adverse Effect on the Company;
(vii) there has been no change in the method of accounting or
keeping of books of account or accounting practices with respect to the Company;
(viii) the Company has not waived, or agreed to waive, any
right of material value with respect to the Company or any of its assets or
properties;
(ix) the Company has not changed, or agreed to change, any of
its business policies or practices, including advertising, marketing, pricing,
purchasing, personnel, sales, returns or budget policies or practices, which
changes would have a Material Adverse Effect on the Company;
(x) except in the ordinary course of business or as
otherwise permitted or required by this Agreement, the Company has not (i)
entered into, or agreed to enter into, any lease (as lessor or lessee) or any
license (as licensee or licensor) on behalf of the Company, (ii) sold, abandoned
or made, or agreed to sell, abandon or make, any other disposition of any of the
assets or properties of the Company; or (iii) except for the Termination
Agreement with Adaptec, Inc. dated June 24, 1998, waived or relinquished any
other rights of material value;
(xi) neither the Company, Parent or Seller has granted or
suffered, or agreed to grant or suffer, any Encumbrance on any assets or stock
of the Company or its subsidiaries other than Permitted Encumbrances;
(xii) except as provided herein, the Company has not entered
into or amended, or agreed to enter into or amend, any contract or other
agreement by or to which the Company is bound or subject, pursuant to which it
agrees to indemnify any party on behalf of the Company (except in the ordinary
course of business) or pursuant to which it agrees to refrain from competing
with any party;
(xiii) the Company has not, except in the ordinary course of
business, incurred or assumed, or agreed to incur or assume, any material
Liability (whether or not currently due and payable);
(xiv) the Company has not terminated, or agreed to terminate,
or failed to renew or received any written threat (that was not subsequently
withdrawn) to terminate or fail to renew, any Contract, license or Permit and/or
Approval, where any such termination or failure to renew could reasonably be
expected to have a Material Adverse Effect on the Company;
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(xv) no Pre-Existing/Continuing Environmental Liabilities
which would be required to be reflected on the balance sheet of the Company have
arisen; and
(xvi) the Company has not entered into, or agreed to enter
into, any transaction where the same could reasonably be expected to have a
Material Adverse Effect on the Company.
3.9 Taxes. The Company and its subsidiaries have filed or caused to be
filed all Tax Returns required to be filed under applicable law, and such Tax
Returns are true and correct in all material respects. The Company and its
subsidiaries have, within the time and in the manner prescribed by law, paid
directly or indirectly (and until the Closing will pay directly or indirectly
within the time and in the manner prescribed by law) all Taxes that are due and
payable. To the Knowledge of Seller, except as set forth on Section 3.9 of the
Disclosure Schedule, no examination of any Tax Return is underway as of the date
of this Agreement. There are no outstanding (a) powers of attorney granted by
the Company or any of its subsidiaries concerning any Tax matter, (b) agreements
or waivers extending the statutory period of limitation applicable to any Tax
Return of the Company or any of its subsidiaries, (c) agreements entered into
with any taxing authority that would have a material and continuing effect on
the Company and its subsidiaries after the Closing Date or (d) Encumbrances (and
immediately following the Closing Date there will be no Encumbrances) on the
assets of the Company relating to or attributable to Taxes other than
Encumbrances for Taxes not yet due and payable. None of the Company and its
subsidiaries has any liability for the Taxes of any other person other than the
Company and its subsidiaries under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local or foreign law). Neither the Seller nor the
Company has been notified of any request for an audit or other examination of
any Tax Return of the Company. The Company has no liabilities for unpaid Taxes
which have not been accrued or reserved against in accordance with GAAP on the
Company's financial statements, whether asserted or unasserted, contingent or
otherwise. Neither the Company nor the Seller has Knowledge of any basis for the
assertion of any claim relating or attributable to Taxes which, if adversely
determined, would result in any Lien on the assets of the Company. None of the
Company's assets are treated as "tax-exempt use property", within the meaning of
Section 168(h) of the Code. The Company is not, and has not been at any time, a
"United States Real Property Holding Corporation" within the meaning of Section
897(c)(2) of the Code. There is no contract, agreement, plan or arrangement to
which the Company is a party as of the date of this Agreement, including but not
limited to the provisions of this Agreement, covering any employee or former
employee of the Company, individually or collectively, which could give rise to
the payment of any amount that would not be deductible pursuant to Sections
280G, 404 or 162(m) of the Code.
3.10 Legal Proceedings. There are no Orders outstanding and no Actions or
Proceedings pending against the Company or any of its subsidiaries or any of
their respective assets and properties. To the Knowledge of Seller, there are no
claims, Actions or Proceedings threatened against the Company or any of its
subsidiaries or any of their respective assets and properties which could
reasonably be expected to result in liability in any individual case or in the
aggregate in excess of $100,000.
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3.11 Compliance With Laws and Orders. Each of the Company and its
subsidiaries is in compliance in all material respects with all applicable laws,
rules, regulations, ordinances, decrees, Orders, judgments or Permits and/or
Approvals.
3.12 Benefit Plans; ERISA. Set forth in Section 3.12 of the Disclosure
Schedule is a list of all Benefit Plans of the Company and its subsidiaries.
Each Benefit Plan listed in Section 3.12 of the Disclosure Schedule is in
compliance in all material respects with the applicable provisions of ERISA, the
Code and all other federal and state laws. The Company has no Liability with
respect to any employee benefit plans established by any predecessor. To the
Knowledge of Seller, there are no proceedings, claims (other than for benefits
payable in the normal course of business) or suits pending or threatened by any
governmental authority or any participant or beneficiary against any of the
Benefit Plans, the assets of any of the trusts under any of the Benefit Plans or
the plan sponsor or any fiduciary of any of the Benefit Plans. All contributions
required to be made with respect to the Benefit Plans have been made or
reflected in the Audited Financial Statements.
3.13 Real Property.
(a) Section 3.13((a)) of the Disclosure Schedule contains a list
of (i) each parcel of real property owned by the Company or any of its
subsidiaries, (ii) each parcel of real property leased by the Company or any of
its subsidiaries (as lessor or lessee), and (iii) all Encumbrances (other than
Permitted Encumbrances, Encumbrances that will be removed at or prior to the
Closing, or Encumbrances disclosed, or given as security for a monetary
Liability shown, on the Balance Sheet) on any parcel of real property referred
to in clause (i).
(b) The Company and its subsidiaries have, and at the Closing will
have, good and marketable title to each parcel of real property described in
clause (i) of paragraph (a) above, free and clear of any Encumbrances, other
than the Permitted Encumbrances, Encumbrances that will be extinguished prior to
the Closing, Encumbrances that will be removed at or prior to the Closing, or
Encumbrances disclosed, or given as security for a monetary Liability shown, on
the Balance Sheet, and have valid and subsisting leasehold estates in the
respective real properties otherwise leased by them as lessee under leases
referred to in clause (ii) of paragraph (a) above free and clear of Encumbrances
upon the lessee's interest other than Permitted Encumbrances, Encumbrances that
will be extinguished at or prior to the Closing, or Encumbrances disclosed, or
given as security for a monetary Liability shown, on the Balance Sheet. To the
Knowledge of Seller, each such lease is a legal, valid and binding agreement,
enforceable in accordance with its terms, and no default has occurred, nor has
there occurred any event which with notice, the passage of time, or both, would
constitute a default under such lease. With respect to the Operative Documents,
as that term is defined in that Lease Agreement dated as of December 22, 1995
between the SLI Trust, as lessor, and Symbios Logic Inc., as lessee, (i) no
default has occurred nor has there occurred any event which with notice, the
passage of time, or both, would constitute a default, under any of the Operative
Documents which would obligate the Company or its subsidiaries to purchase the
real property that is the subject of the Operative Documents, (ii) the Company
and its subsidiaries are currently in compliance with all of its obligations
under the Operative Documents.
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(c) Except as otherwise described in Section 3.13((c)) of the
Disclosure Schedule, (i) there are no structural, electrical, mechanical,
plumbing, roof, paving or other defects in any improvements located on any such
real property as could, either individually or in the aggregate, have a material
adverse effect on the use, development, occupancy or operation thereof as
presently contemplated, (ii) to the Knowledge of Seller, there are no natural or
artificial conditions upon any such real property or any other facts or
conditions which could, in the aggregate, have a material adverse effect on the
transferability, financeability, ownership, leasing, use, development, occupancy
or operation of any such real property, (iii) there are no parties in possession
of any portion of any such real property, whether as tenants, trespassers or
otherwise, except the Company, and (iv) there are no pending, or, to the
Knowledge of Seller, threatened assessments, improvements or activities of any
public or quasi-public body either planned, in the process of construction or
completed which may give rise to any material assessment against any such real
property.
3.14 Adequacy of Assets. Except as otherwise set forth in any section of
the Disclosure Schedule to this Agreement, and subject to any and all
limitations and qualifications set forth elsewhere in this Article III, the
Company has possession of, and right to use, all of the tangible and intangible,
real and personal property assets required for the conduct of its business as
presently conducted.
3.15 Tangible Personal Property. The Company and its subsidiaries are in
possession of and have good title to, or valid leasehold interests in or valid
rights to use, all tangible personal property which is used in and which is
material to the business of the Company and its subsidiaries taken as a whole
free of Encumbrances other than Permitted Encumbrances, Encumbrances that will
be removed at or prior to the Closing, or Encumbrances disclosed, or given as
security for a monetary Liability shown, on the Balance Sheet.
3.16 Intellectual Property Rights. Except as set forth in Section 3.16 of
the Disclosure Schedule: (i) each item of Company Intellectual Property is free
and clear of any Encumbrances; (ii) the Company (a) is the exclusive owner of
all trademarks and trade names used in connection with the operation or conduct
of the business of the Company, including the sale of any products or technology
or the provision of any services by the Company and (b) owns exclusively, and
has good title to, all copyrighted works that are or are part of Company
products or other works of authorship that the Company otherwise purports to
own; (iii) except as contemplated in the Ancillary Agreements, the Company has
not transferred ownership of, or granted any license of or right to use or
authorized the retention of any rights to use, any material Intellectual
Property that is or was Company Intellectual Property, to any other person; (iv)
there are no material Contracts, pursuant to which the Company has licensed or
transferred to any third person or any Affiliate of Company any material
Intellectual Property that is or was Company Intellectual Property; (v) all
material Intellectual Property, including any item thereof, will be fully
transferable, alienable and licensable by or between Company or Purchaser
without restriction and without payment of any kind to any third party; (vi) the
consummation of the transactions contemplated by this Agreement will not result
in the loss of, or otherwise adversely affect, any ownership rights of the
Company in any material Company Intellectual Property; (vii) the consummation of
the transactions contemplated by this Agreement will not result in the breach
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or termination of any license, contract or agreement to which Company is a party
respecting any material Intellectual Property; (viii) the operation of the
business of the Company: (a) did not, and (b) to the Knowledge of Seller, will
not, when conducted in substantially the same manner following the Closing,
infringe or misappropriate any Intellectual Property of any person, violate the
rights of any person, or constitute unfair competition or trade practices under
the laws of any jurisdiction, and the Company has not received notice from any
person claiming that such operation or any act, product, technology or service
(including products, technology or services currently under development) of the
Company infringes or misappropriates any Intellectual Property of any person or
constitutes unfair competition or trade practices under the laws of any
jurisdiction (nor is the Company aware of any basis therefor; provided, however,
Seller has not, and has informed Purchaser that it has not, conducted any "right
to use" study or similar investigation with respect to the Intellectual Property
rights of any third party); (ix) to the Knowledge of Seller, there are no
contracts, licenses or agreements between the Company and any other person with
respect to Company Intellectual Property under which there is any dispute
regarding the scope of such agreement or performance under such agreement,
including with respect to any payments to be made or received by the Company
thereunder; (x) to the Knowledge of Seller, no person is infringing or
misappropriating any Company Intellectual Property; (xi) no Company Intellectual
Property or product, technology or service of the Company is subject to any
proceeding or outstanding decree, order, judgment, agreement or stipulation that
restricts in any manner the use, transfer or licensing thereof by the Company or
may affect the validity, use or enforceability of such Company Intellectual
Property; and (xii) the ownership of the Company by Purchaser upon the Closing
will not result in the granting by Purchaser of any Intellectual Property rights
of Purchaser (other than Company Intellectual Property rights) to any person.
Seller makes no representation or warranty in Section 3.16(viii) with respect to
the operations, products or conduct of the business of the Company by Purchaser
in a manner different from the manner in which Seller and the Company and its
subsidiaries have heretofore operated or conducted the operations or business
including the manufacture and sale of products of the Company to the extent that
such infringement or misappropriation arises from such difference.
3.17 Contracts.
(a) Section 3.17((a)) of the Disclosure Schedule (with paragraph
references corresponding to those set forth below) contains a list of each of
the following Contracts to which the Company or any of its subsidiaries is a
party or by which any of their respective assets and properties is bound as of
the date of this Agreement:
(i) all Contracts (excluding Benefit Plans) providing for a
commitment of employment or consulting services for a specified term or payments
at any one time or in any one year in excess of Two Hundred Thousand Dollars
($200,000);
(ii) all Contracts with any person containing any provision
or covenant prohibiting or materially limiting the ability of the Company or any
of its subsidiaries to engage in any business activity or compete with any
person or prohibiting or materially limiting the ability of any person to
compete with the Company or any of its subsidiaries;
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(iii) all partnership or joint venture agreements;
(iv) all Contracts relating to Indebtedness of the Company or
any of its subsidiaries in excess of Five Hundred Thousand Dollars ($500,000)
(other than Indebtedness owing to or preferred stock owned by the Company or any
wholly-owned subsidiary of the Company);
(v) all Contracts providing for (A) the future disposition
or acquisition of any assets and properties material to the business or
condition of the Company and its subsidiaries taken as a whole, other than
dispositions or acquisitions in the ordinary course of business, and (B) any
merger or other business combination;
(vi) all Contracts between or among the Company or any of its
subsidiaries, on the one hand, and Seller or any Affiliate (other than the
Company or any of its subsidiaries) of Seller providing for payments in any one
year or at any one time by or to the Company or any of its subsidiaries
individually or in the aggregate exceeding Fifty Thousand Dollars ($50,000);
(vii) all Contracts (other than this Agreement) that (A) limit
or contain restrictions on the ability of the Company or any of its subsidiaries
to declare or pay dividends on, to make any other distribution in respect of or
to issue or purchase, redeem or otherwise acquire its capital stock, to incur
Indebtedness, to incur or suffer to exist any Encumbrance, to purchase or sell
any assets and properties, to change the lines of business in which it
participates or engages or to engage in any merger or other business combination
or (B) require the Company or any of its subsidiaries to maintain specified
financial ratios or levels of net worth or other indicia of financial condition;
(viii) any collective bargaining agreement; and
(ix) all other Contracts that (A) involve the payment or
potential payment, pursuant to the terms of any such Contract, by or to the
Company or any of its subsidiaries of more than Five Hundred Thousand Dollars
($500,000) and (B) cannot be terminated within one hundred eighty (180) days
after giving notice of termination without resulting in any material cost or
penalty to the Company or any of its subsidiaries.
(b) Seller has previously delivered to Purchaser a true, correct
and complete copy of each written Contract listed in Section 3.17 of the
Disclosure Schedule, (as amended to date) and a written summary setting forth
the terms and conditions of each oral agreement referred to in Section 3.17 of
the Disclosure Schedule; each such Contract constitutes the entire agreement
between the Company or its subsidiaries, on the one hand, and the other
party(ies) to such Contract, on the other hand; no such Contract has been
modified or amended in any respect; and no party has repudiated any provision of
any Contract. Each Contract disclosed in Section 3.17((a)) of the Disclosure
Schedule is in full force and effect and constitutes a legal, valid and binding
agreement, enforceable in accordance with its terms, and neither the Company or
any of its subsidiaries nor, to the Knowledge of Seller, any other party to such
Contract is in
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material violation of or material default under any such Contract (or with
notice or lapse of time or both, would be in material violation of or material
default under any such Contract).
3.18 Permits and/or Approvals. The Company and its subsidiaries have or
will have applied for all Permits and/or Approvals required for the conduct of
the business of the Company and its subsidiaries as presently conducted and for
the ownership, leasing, use, development, occupancy and operation of their
respective assets and properties (other than Permits and/or Approvals, the
absence of which could not reasonably be expected to have a material adverse
effect on the transferability, financeability, use, development, occupancy or
operation of any such assets or properties. Each such Permit and/or Approval is
valid, binding and in full force and effect and will remain in full force and
effect after the Closing; and to the Knowledge of Seller neither the Company nor
any of its subsidiaries is in default (or with the giving of notice or lapse of
time or both, would be in default) under any such Permit and/or Approval in any
material respect.
3.19 Affiliate Transactions. Except as listed in Section 3.19 of the
Disclosure Schedule, there is no Indebtedness or other amounts owing under
Contracts between the Company or any of its subsidiaries, on the one hand, and
Seller, any officer, director, or Affiliate (other than the Company and its
subsidiaries) of Seller, on the other hand.
3.20 Environmental Matters.
(a) The Company and its subsidiaries have been, are in and at the
Closing will be in compliance in all material respects with all Environmental
Requirements, and possesses or has applied for and at the Closing will possess
or will have applied for all Permits and/or Approvals required for the conduct
of the Hazardous Activities of the Company and its subsidiaries in all material
respects; and neither the Company nor its subsidiaries has received any notice
of any alleged claim, violation of or Liability under any Environmental
Requirement which has not heretofore been cured or for which there is any
remaining Liability.
(b) Neither the Company nor its subsidiaries has received notice
of any Environmental Claim filed or threatened against it, or against any person
or entity whose Liability for any Environmental Claim the Company or its
subsidiaries has retained or assumed either contractually or by operation of
law, and there are no past or present actions, activities, circumstances,
conditions, events or incidents that could reasonably be expected to form the
basis of any Environmental Claim against the Company or its subsidiaries, the
business thereof any of the facilities described in Schedule 3.13(a), or against
any person or entity whose Liability for any Environmental Claim the Company or
its subsidiaries has retained or assumed either contractually or by operation of
law.
(c) Neither the Company nor its subsidiaries has disposed of,
emitted, discharged, handled, stored, transported, used or released any
Hazardous Material, arranged for the disposal, discharge, storage or release of
any Hazardous Material, or exposed any employee or other individual to any
Hazardous Material or condition so as to give rise to any material Liability or
corrective or remedial obligation under any Environmental Requirement.
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(d) No Hazardous Material is present in, on, or under any Company
Facilities or to the Knowledge of Seller any Pre-Closing Hazardous Material
Disposal Facility, which would give rise to, any material Liability or any
material corrective or remedial obligation of the Company or its subsidiaries
under any Environmental Requirement.
(e) No written notification of a Release of a Hazardous Material
has been filed by or on behalf of the Company or any of its subsidiaries and to
the Knowledge of Seller no site or facility now or previously owned, operated or
leased by the Company or any of its subsidiaries is listed or to the Knowledge
of Seller is proposed for listing on the NPL, CERCLIS or any similar state or
local list of sites requiring investigation or clean-up.
(f) To the Knowledge of Seller, any asbestos material which is on
or part of the Company Facilities is in good repair according to the current
standards and practices governing such material, and its presence or condition
does not violate any applicable Environmental Requirement.
(g) Other than Hazardous Materials which are reasonably necessary
for the conduct of the current Company operations and are properly stored in all
material respects in accordance with applicable Environmental Requirements, no
Hazardous Material will be stored at the Company Facilities as of the Closing.
(h) No environmental certification, clearance or approval is
required by any Governmental or Regulatory Authority or under any Environmental
Requirement to permit the legal consummation of the transactions contemplated
hereby.
3.21 Accounts Receivable; Inventory. Subject to any allowances set forth
in the Company's Balance Sheet, the accounts receivable shown in the Balance
Sheet, arose in the ordinary course of business; were not, as of the date of the
Balance Sheet, subject to any material discount, contingency, claim of offset or
recoupment or counterclaim; and represented, as of the date of the Balance
Sheet, bona fide claims against debtors for sales, leases, licenses and other
charges. All accounts receivable of the Company arising after the date of the
Balance Sheet through the date of this Agreement arose in the ordinary course of
business and, as of the date of this Agreement, are not subject to any material
discount, contingency, claim of offset or recoupment or counterclaim, except for
normal allowances consistent with past practice. The amount carried for doubtful
accounts and allowances disclosed in the Balance Sheet is believed by the
Company as of the date of this Agreement to be sufficient to provide for any
material losses which may be sustained on realization of the accounts receivable
shown in the Balance Sheet. As of the date of the Balance Sheet, the inventories
shown on the Balance Sheet consisted of items of a merchantable condition and of
a quantity and quality suitable, usable and salable in the ordinary course of
business for the purpose for which they are intended. All such inventories are
valued on the Balance Sheet in accordance with GAAP and sufficient allowances
have been established on the Balance Sheet, in each case in an amount believed
by the Company as of the date of the Balance Sheet to be adequate, for material
slow-moving, obsolete or unusable inventories.
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3.22 Insurance. The Company has delivered to Purchaser copies of each
insurance policy (including policies providing property, casualty, liability,
and workers' compensation coverage and bond and surety arrangements) with
respect to which the Company is a party, a named insured, or otherwise the
beneficiary of coverage as of the date of this Agreement and such policies are
the policies generally required for coverage of the risks faced by the Company
in a manner customary, generally, for the Company's industry. With respect to
each such insurance policy: (A) the policy is legal, valid, binding, enforceable
and in full force and effect in all respects and there has been no notice of
cancellation or nonrenewal of the policy received; (B) the Company is not in
breach or default (including with respect to the payment of premiums or the
giving of notices), and no event has occurred which, with notice or the lapse of
time, would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (C) no party to the policy
has repudiated any material provision thereof. Section 3.22 of the Disclosure
Schedule describes any self-insurance arrangements presently maintained by, or
for the benefit of, the Company as of the date of this Agreement.
3.23 Disclosure. No representation or warranty made by Parent, Seller or
the Company in this Agreement or the exhibits or schedules hereto or
certificates delivered hereunder, contains or will contain any untrue statement
of a material fact, or omits or will omit to state a material fact necessary to
make the statements or facts contained herein or therein not misleading in light
of the circumstances under which they were furnished.
3.24 Product Liability Claims. At no time during the five years preceding
the date of this Agreement has the Company or, to the Knowledge of Seller, any
of the Company's predecessors in interest, been subject to any material product
liability claim relating to any of the Company's products and, to the Knowledge
of Seller, no such claim is threatened nor does any circumstance or condition
exist that Seller reasonably expects to give rise to any such claim.
3.25 Brokers; Finders. No broker, investment bank, financial advisor or
other person or entity, other than Lehman Brothers, the fees and expenses of
which will be paid by Seller, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon the arrangements made by or on behalf
of Seller or Parent.
3.26 No Other Representations. Notwithstanding anything to the contrary
contained in this Agreement, it is the explicit intent of each party hereto that
Parent and Seller are making no representation or warranty whatsoever, express
or implied, except those representations and warranties contained in this
Article III and in any certificate delivered pursuant to Section 8.2(c). In
particular, Seller makes no representations or warranty to Purchaser with
respect to (i) the information set forth in the Confidential Descriptive
Memoranda relating to the Company's Storage Systems and Semiconductor Divisions
or made available to Purchaser or any of its Representatives in connection with
Purchaser's consideration of the transactions contemplated by this Agreement,
and (ii) any financial projection or forecast relating to the business or
condition of the Company. With respect to any projection or forecast delivered
by or on behalf of Seller to Purchaser, Purchaser acknowledges that (i) there
are uncertainties inherent in attempting to make such projections and forecasts,
(ii) it is familiar with such uncertainties, (iii) it is taking full
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responsibility for making its own evaluation of the adequacy and accuracy of all
such projections and forecasts furnished to it, and (iv) it shall have no claim
against Seller or any of its Representatives or Affiliates with respect thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
4.1 Corporate Existence of Purchaser. Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Purchaser has full corporate power and authority to execute and
deliver this Agreement and the Ancillary Agreements to which it is a party, to
perform its obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby.
4.2 Authority. The execution and delivery by Purchaser of this Agreement
and the Ancillary Agreements to which it is a party, and the performance by
Purchaser of its obligations hereunder and thereunder, have been duly and
validly authorized by the Board of Directors of Purchaser, no other corporate
action on the part of Purchaser or its stockholders being necessary. This
Agreement has been duly and validly executed and delivered by Purchaser and
constitutes, and upon the execution and delivery by Purchaser of the Ancillary
Agreements to which it is a party such Ancillary Agreements will constitute,
legal, valid and binding obligations of Purchaser enforceable against Purchaser
in accordance with their terms.
4.3 No Conflicts. The execution and delivery by Purchaser of this
Agreement do not, and the execution and delivery by Purchaser of the Ancillary
Agreements to which it is a party, the performance by Purchaser of its
obligations under this Agreement and such Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby will not: (a)
conflict with or result in a violation or breach of any of the terms, conditions
or provisions of the certificate of incorporation or by-laws (or other
comparable corporate charter document) of Purchaser; (b) subject to obtaining
the consents, approvals and actions, making the filings and giving the notices
disclosed in Section 4.4 hereto, conflict with or result in a violation or
breach of any term or provision of any law or Order applicable to Purchaser or
any of its assets and properties (other than such conflicts, violations or
breaches which could not in the aggregate reasonably be expected to have a
material adverse effect on the validity or enforceability of this Agreement or
any of such Ancillary Agreements or the ability of Purchaser to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby); or (c) except as could not reasonably be
expected to have a material adverse effect on the ability of Purchaser to
consummate the transactions contemplated hereby or by any of the Ancillary
Agreements or to perform any of its obligations hereunder or thereunder, (i)
conflict with or result in a violation or breach of, (ii) constitute (with or
without notice or lapse of time or both) a default under, (iii) require
Purchaser to obtain any consent, approval or action of, make any filing with or
give any notice to any person as a result or under the terms of, or (iv) result
in
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the creation or imposition of any Encumbrance upon Purchaser or any of its
Assets or Properties under, any contract or License to which Purchaser is a
party or by which any of its assets and properties is bound.
4.4 Governmental Approvals and Filings. No consent, approval or action
of, filing with or notice to any Governmental or Regulatory Authority on the
part of Purchaser is required in connection with the execution, delivery and
performance of this Agreement or the Ancillary Agreements to which it is a party
or the consummation of the transactions contemplated hereby or thereby, except
(i) the filing of a Notification and Report Form pursuant to the HSR Act and the
expiration or early termination of the waiting periods thereunder; (ii) any
required filings under any applicable foreign antitrust laws and the expiration
or termination of waiting periods thereunder; and (iii) where required solely as
a result of the identity or the legal or regulatory status of Seller or any of
its Affiliates.
4.5 Legal Proceedings. There are no Orders outstanding and no Actions or
Proceedings pending or, to the Knowledge of Purchaser, threatened against,
relating to or affecting Purchaser or any of its assets and properties which
could reasonably be expected to delay or to result in the issuance of an Order
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Ancillary Agreements or otherwise to impair the ability of Purchaser to
perform its obligations under this Agreement and the Ancillary Agreements and to
consummate the transactions contemplated hereby and thereby.
4.6 Purchase for Investment. The Shares will be acquired by Purchaser
for its own account for the purpose of investment, it being understood that the
right to dispose of such Shares shall be entirely within the discretion of
Purchaser. Purchaser will refrain from transferring or otherwise disposing of
any of the Shares, or any interest therein, in such manner as to cause Seller to
be in violation of the registration requirements of the Securities Act of 1933,
as amended, or applicable state securities or blue sky laws.
4.7 Financing. Purchaser has or will have sufficient cash and/or
available borrowing capacity to pay the Purchase Price and to make all other
necessary payments of fees and expenses (including the fees, commissions and
expenses of any investment bank or financial adviser) in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements.
4.8 No Other Representations. Notwithstanding anything to the contrary
contained in this Agreement, it is the explicit intent of each party hereto that
Purchaser is making no representation or warranty whatsoever, express or
implied, except those representations and warranties contained in this Article
IV and in any certificate delivered pursuant to Section 8.3((c)) hereof.
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ARTICLE V
COVENANTS OF PARENT AND SELLER
Parent and Seller covenant and agree with Purchaser that, at all times
from and after the date hereof until the Closing, Parent and Seller will comply
with all applicable covenants and provisions of this Article V, except to the
extent Purchaser may otherwise consent in writing.
5.1 Regulatory and Other Approvals. Parent and Seller will, and will
cause the Company and its subsidiaries to, (a) proceed diligently, expeditiously
and in good faith as promptly as practicable to obtain all consents, approvals
or actions of, to make all filings with and to give all notices to Governmental
or Regulatory Authorities or any other person required of Parent and Seller, the
Company or any of its subsidiaries to consummate the transactions contemplated
hereby and by the Ancillary Agreements, (b) provide such other information and
communications to such Governmental or Regulatory Authorities or other persons
as such Governmental or Regulatory Authorities or other persons may reasonably
request in connection therewith, and (c) provide reasonable cooperation to
Purchaser in obtaining all consents, approvals or actions of, making all filings
with and giving all notices to Governmental or Regulatory Authorities or other
persons required of Purchaser to consummate the transactions contemplated hereby
and by the Ancillary Agreements. Seller will provide prompt notification to
Purchaser when any such consent, approval, action, filing or notice referred to
in clause (a) above is obtained, taken, made or given, as applicable, and will
advise Purchaser of any communications (and, unless precluded by law, provide
copies of any such communications that are in writing) with any Governmental or
Regulatory Authority or other person regarding any of the transactions
contemplated by this Agreement or any of the Ancillary Agreements.
5.2 Tax Sharing Agreement. Parent hereby covenants and agrees that,
without the prior written consent of Purchaser, it will not amend that certain
Tax Sharing Agreement by and among Parent, Company and certain other
subsidiaries of Parent, in any manner that will increase the Company's
obligations thereunder.
5.3 Investigation by Purchaser. Seller will, and will cause the Company
and its subsidiaries to, (a) provide (i) Purchaser and (ii) the officers,
employees, counsel, accountants, financial advisors, consultants and other
representatives (together, "Representatives") of Purchaser with access, upon
reasonable prior notice and during normal business hours, to all officers,
employees, agents and accountants of the Company and its subsidiaries and their
assets, properties, books and records, but only to the extent that such access
does not unreasonably interfere with the business and operations of the Company
and its subsidiaries, and (b) make available to Purchaser and such other persons
all such information and data concerning the business and operations of the
Company and its subsidiaries as Purchaser or any of such other persons
reasonably may request in connection with such investigation (including such
access and information as may be required for an environmental audit), except to
the extent that furnishing any such information or data would violate any law,
Order, Contract or Permit and/or Approval applicable to Seller, the Company or
any of their respective subsidiaries or by which any of their respective assets
or properties is bound.
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5.4 Financial Statements and Reports. As promptly as practicable and in
any event no later than forty-five (45) days after the end of each fiscal
quarter ending after the date hereof and before the Closing Date (other than the
fourth quarter) or ninety (90) days after the end of each fiscal year ending
after the date hereof and before the Closing Date, as the case may be, Seller or
the Company will deliver to Purchaser true and complete copies of the unaudited
consolidated balance sheet, and the related audited or unaudited consolidated
statements of operations, stockholders' equity and cash flows, of the Company
and its consolidated subsidiaries, in each case as of and for the fiscal year
then ended or as of and for each such fiscal quarter and the portion of the
fiscal year then ended, as the case may be, together with the notes, if any,
relating thereto. The Company shall consult with Purchaser regarding capital
expenditures and commitments for additions to property, plant or equipment
constituting capital assets between the date hereof and the Closing Date.
5.5 Conduct of Business. Seller will cause the Company and its
subsidiaries to conduct business only in the ordinary course. Without limiting
the generality of the foregoing, Seller will cause the Company and its
subsidiaries to use Best Efforts to (a) preserve intact the present business
organization and reputation of the Company and its subsidiaries in all material
respects, (b) keep available (subject to dismissals and retirements in the
ordinary course of business) the services of the key officers and employees of
the Company and its subsidiaries, (c) maintain the assets and properties of the
Company and its subsidiaries in good working order and condition, subject to
ordinary wear and tear, and (d) maintain the good will of key customers,
suppliers and lenders and other persons with whom the Company or any of its
subsidiaries otherwise has significant business relationships.
5.6 Certain Restrictions. Except as contemplated by this Agreement,
Seller will cause the Company and its subsidiaries to refrain from:
(a) amending their certificates or articles of incorporation or
by-laws (or other comparable corporate charter documents) or taking any action
with respect to any such amendment or any recapitalization, reorganization,
liquidation or dissolution of any such corporation;
(b) authorizing, issuing, selling or otherwise disposing of any
shares of capital stock of or any option, warrant or other right with respect to
the capital stock of the Company or any of its subsidiaries, or modifying or
amending any right of any holder of outstanding shares of capital stock of or
options with respect to the Company or any of its subsidiaries except for the
issuance of options to purchase shares of Common Stock issued to newly-hired
employees under the Stock Plan not exceeding (i) five thousand (5,000) shares of
Common Stock to any one individual and one hundred thousand (100,000) shares of
Common Stock in the aggregate in the ninety (90) days following the date of this
agreement and (ii) an additional five thousand (5,000) shares of Common Stock to
any one individual and one hundred thousand (100,000) shares in the aggregate
thereafter;
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(c) declaring, setting aside or paying any dividend or other
distribution in respect of the capital stock of the Company or any of its
subsidiaries not wholly owned, directly or indirectly, by the Company, or
directly or indirectly redeeming, purchasing or otherwise acquiring any capital
stock of or any option with respect to the Company or any of its subsidiaries
not wholly owned, directly or indirectly, by the Company;
(d) other than in the ordinary course of business, acquiring or
disposing of, or incurring any Encumbrance (other than a Permitted Encumbrance)
on, any assets and properties;
(e) other than in the ordinary course of business and involving
Contracts and/or licenses that do not exceed $500,000 in the aggregate and do
not have a term exceeding six months, entering into, amending, modifying,
terminating (partially or completely), granting any waiver under or giving any
consent with respect to any Contract or license provided that a foundry
agreement shall not be considered to be an agreement entered into in the
ordinary course of business;
(f) other than in the ordinary course of business (i) incurring or
obtaining a draw on any Indebtedness (including the Bridge Loan) in an aggregate
principal amount exceeding One Million Dollars ($1,000,000) (net of any amounts
of Indebtedness discharged during such period), or (ii) purchasing, canceling,
prepaying or otherwise providing for a complete or partial discharge in advance
of a scheduled payment date with respect to, or waiving any right under, any
Indebtedness in an aggregate principal amount exceeding One Million Dollars
($1,000,000) (in either case other than Indebtedness of the Company or any of
its subsidiaries owing to the Company or any of its wholly-owned subsidiaries);
(g) engaging with any person (other than a direct or indirect
wholly-owned subsidiary of the Company) in any merger or other business
combination;
(h) making capital expenditures or commitments for additions to
property, plant or equipment constituting capital assets (except as set forth in
the Company's Capital Budget) or entering into any operating lease which is not
directly related to an expenditure contemplated by the Company's Capital Budget;
(i) except to the extent required by applicable law, making any
material change in (A) any pricing, investment, accounting, financial reporting,
inventory, credit, allowance or Tax practice or policy, or (B) any method of
calculating any bad debt, contingency or other reserve for accounting, financial
reporting or Tax purposes;
(j) except to the extent required by applicable law, adopting,
entering into or becoming bound by any material Benefit Plan, employment-related
Contract or collective bargaining agreement, or amending, modifying or
terminating (partially or completely) any such Benefit Plan, employment-related
Contract or collective bargaining agreement;
(k) making any change in its fiscal year;
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(l) causing or committing the damage, destruction, or loss of
(whether or not covered by insurance) any property other than dispositions of
property in the ordinary course of business;
(m) making any loan to, any director, officer, or employee, except
cash advances in the ordinary course of business;
(n) granting any increase in the base compensation of any
director, or, except in the ordinary course of business, any officer or
employee;
(o) making any other change in employment terms that will be in
force on the Closing Date for any director, officer, or employee outside the
ordinary course of business;
(p) initiating any lawsuit or similar grievance except in the
ordinary course of business; or
(q) entering into any Contract to do or engage in any of the
foregoing.
Notwithstanding anything to the contrary in this Agreement, Parent, Seller
and the Company may incur Indebtedness under the Bridge Transactions, and grant
Encumbrances with respect to Indebtedness under the Bridge Transactions and make
drawings under the Bridge Loans; provided, that the outstanding Indebtedness on
the Bridge Loan at any one time does not exceed Three Hundred Forty Five Million
Dollars ($345,000,000) and provided further that any new Bridge Loan drawing or
Bridge Loan Indebtedness is advanced to Seller as an increase in the Upstream
Bridge Loan (which will be repaid at the Closing).
5.7 Affiliate Transactions. Subject to Section 2.4, payments by the
Company to Seller under the Tax Sharing Agreement, immediately prior to the
Closing, all Indebtedness and other amounts owing under the Contracts listed in
Section 3.19 of the Disclosure Schedule will be paid in full, and Seller will
terminate and will cause any such officer, director, or Affiliate to terminate
each such Contract with the Company or any of its subsidiaries.
5.8 Fulfillment of Conditions. Seller and Parent will use its Best
Efforts to satisfy each condition to the obligations of Purchaser contained in
this Agreement and will not, and will not permit the Company or any of its
subsidiaries to, take or fail to take any action that could reasonably be
expected to result in the nonfulfillment of any such condition. Seller shall
give prompt written notice to Purchaser of any event, condition or circumstance
occurring from the date hereof through the Closing Date that would cause the
representations and warranties set forth in Article III of this Agreement to
become untrue in any material respect or that would constitute a material
violation or breach of this Agreement. No disclosure pursuant to this Section
5.8 shall be deemed to amend or supplement the Disclosure Schedule, to prejudice
any right of Purchaser to assert a claim for indemnity under Article IX hereof,
or to prevent or cure any misrepresentation or breach of this Agreement.
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5.9 Litigation. From the date hereof through the Closing Date, Seller
shall promptly notify Purchaser of any investigations of which Seller has
knowledge or any lawsuits, claims, notices of violation or proceedings that
after the date hereof are commenced or, to the Knowledge of Seller, threatened,
against the Company or any of its subsidiaries.
5.10 Agreement Not to Solicit. For the period beginning on the date of
this Agreement and ending three (3) years after Closing, neither Parent, Seller
nor any of their respective Affiliates will, without Purchaser's prior consent
(which consent may be withheld in Purchaser's sole discretion), solicit for
employment any employee of the Company; for purposes of this Section 5.10, the
term "solicit" shall be deemed not to include advertisements or other
generalized employment searches, including advertisements in various media
(including trade media) or any job posting system of Parent, Seller or their
Affiliates, not specifically directed to employees of the Company and shall not
include any action by Parent, Seller or their Affiliates following any response
by any person to such advertisements or generalized searches.
5.11 Insurance. From the date hereof through the Closing Date, Seller
shall maintain in force (including necessary renewals thereof) any insurance
policies listed on Section 5.11 of the Disclosure Schedule, except to the extent
that they may be replaced with policies or self-insurance determinations
appropriate to insure that the assets, properties and business of the Company to
the same extent as currently insured.
5.12 [Intentionally Left Blank]
5.13 Exclusivity. Neither Parent nor Seller, nor any of their respective
Affiliates, agents, or representatives will (and Seller will not cause or permit
the Company to) (i) solicit, initiate, or encourage the submission of any
proposal or offer from any person relating to the acquisition of any capital
stock or other voting securities of the Company (other than pursuant to director
and employee stock options and contractual obligations disclosed in the
Disclosure Schedule), or any substantial portion of the assets, of the Company
(including any acquisition structured as a merger, consolidation, or share
exchange) or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any person to do or seek any of the
foregoing; provided, that the foregoing restrictions shall cease to apply if
Purchaser or Seller shall have received a second request for information under
the HSR Act or a similar request under any other state, federal or foreign
antitrust, fair-trade or other similar law, or if Purchaser or Seller shall have
been advised by the Federal Trade Commission, the Antitrust Division of the U.S.
Department of Justice or any other regulatory agency under any state, federal or
foreign antitrust, fair-trade or other similar law that the staff or agency
intends to take or recommend judicial or administrative action to prohibit the
consummation of the transactions contemplated by this Agreement. In addition,
Seller will not (i) transfer any of the Shares or (ii) vote any of the Shares in
favor of any such acquisition structured as a merger, consolidation, or share
exchange.
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5.14 Option Exercises. Notwithstanding any other provision in this
Agreement, in the event that any options to purchase Common Stock are exercised
prior to Closing, Seller and Parent shall, at Seller's cost, eliminate all
minority shareholdings. Without limiting the generality of the foregoing, prior
to Closing the Seller may purchase any such minority interests or may cause the
merger of the Company with another newly formed wholly owned subsidiary of
Seller, with Company remaining as the surviving entity in order to eliminate
outstanding shares of Common Stock issued upon the exercise of stock options.
5.15 Termination of Options. On or before the Closing, Seller shall take
such action as may be necessary to terminate all outstanding options or warrants
to purchase shares of capital stock of the Company or any securities
exchangeable or convertible into or exercisable for shares of capital stock of
the Company that are not Symbios Stock Options (as defined in Section 7.1)
including payment to each holder of Director Options a cash amount, in lawful
money of the United States, equal to the product of the number of shares of
Company capital stock purchasable pursuant to such holder's Director Options,
multiplied by the difference between the Fully Diluted Per-Share Purchase Price
and the exercise price of such Director Options.
5.16 Transaction Structure. Each party shall cooperate in structuring and
effecting such corporate transactions as may be reasonably requested by any
party (at the requesting party's cost) prior to Closing, provided that such
changes do not result in any adverse consequences to the party receiving such
request (or to the Company) and can be reversed if the Closing does not occur.
5.17 Assumption of Various Employment Arrangements. At the Closing,
Seller shall assume or reimburse Purchaser for expenses resulting from the
following obligations of the Company, existing on the date hereof or incurred
after the date hereof without the prior written consent of Purchaser, on terms
and conditions reasonably acceptable to Seller and Purchaser: (i) the stay-put
arrangements; and (ii) those provisions of the employment agreements between the
Company and its employees providing for additional compensation, accelerated
options, COBRA continuation, cash bonuses to compensate for 401K plan
forfeitures, and other benefits which would not be payable or available were it
not for the transactions contemplated by this Agreement.
5.18 Purchase of Christ Note. Effective on the day following the Closing,
Seller shall purchase from the Company for a cash purchase price of $425,000
that certain promissory note in the amount of $425,000 payable by Mr. Christ to
the Company.
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ARTICLE VI
COVENANTS OF PURCHASER
Purchaser covenants and agrees with Seller that, at all times from and
after the date hereof until the Closing and, in the case of Section 6.3,
thereafter, Purchaser will comply with all covenants and provisions of this
Article VI, except to the extent Seller may otherwise consent in writing.
6.1 Regulatory and Other Approvals. Purchaser will (a) proceed
diligently, expeditiously and in good faith obtain as promptly as practicable
all consents, approvals or actions of, to make all filings with and to give all
notices to Governmental or Regulatory Authorities or any other person required
of Purchaser to consummate the transactions contemplated hereby and by the
Ancillary Agreements, (b) provide such other information and communications to
such Governmental or Regulatory Authorities or other persons as such
Governmental or Regulatory Authorities or other persons may reasonably request
in connection therewith, and (c) provide reasonable cooperation to Seller, the
Company and its subsidiaries in obtaining all consents, approvals or actions of,
making all filings with and giving all notices to Governmental or Regulatory
Authorities or other persons required of Seller, the Company or any of its
subsidiaries to consummate the transactions contemplated hereby and by the
Ancillary Agreements. Purchaser will provide prompt notification to Seller when
any such consent, approval, action, filing or notice referred to in clause (a)
above is obtained, taken, made or given, as applicable, and will advise Seller
of any communications (and, unless precluded by law, provide copies of any such
communications that are in writing) with any Governmental or Regulatory
Authority or other person regarding any of the transactions contemplated by this
Agreement or any of the Ancillary Agreements.
6.2 Fulfillment of Conditions. Purchaser will use its Best Efforts to
satisfy as promptly as practicable each condition to the obligations of Seller
contained in this Agreement and will not take or fail to take any action that
could reasonably be expected to result in the nonfulfillment of any such
condition.
6.3 Release of Guarantees. Before the Closing, Purchaser shall cooperate
with Seller in obtaining releases of Seller from, and will indemnify and hold
Seller harmless against payments Seller is required to make from and after the
Closing in respect of, the guarantees that Seller has given in respect of
Indebtedness of the Company and its subsidiaries described in Section 6.3 of the
Disclosure Schedule.
6.4 Change of Name. From and after ninety (90) days from the Closing,
neither Purchaser, the Company nor any of their Affiliates will use the names of
Seller or its Affiliates or any confusingly similar names, or the Intellectual
Property of Seller or its Affiliates to be listed in Section 6.4 of the
Disclosure Schedule prior to Closing, without the prior written consent of
Seller.
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6.5 Indemnification of Directors and Officers. Until the sixth
anniversary of the Closing Date, Purchaser will not, nor will it permit any of
its subsidiaries or Affiliates to, take any action to amend any provision of the
certificate of incorporation or by-laws (or other comparable corporate charter
documents) of the Company or any of its subsidiaries, or any agreement listed in
Section 6.5 of the Disclosure Schedule between the Company or any of its
subsidiaries and any of their respective directors, officers or employees, that
provides for indemnification of any director, officer or employee (including an
amendment effected through a merger, consolidation, sale of all or substantially
all the assets, liquidation or dissolution of any such corporation), if the
effect of such amendment would be to have an adverse effect on any right
provided thereby to any person who shall have served as a director or officer of
the Company or any of its subsidiaries prior to the Closing Date in respect of
actions taken in such capacity on or prior to the Closing Date, unless such
person would immediately thereafter be entitled to indemnification by Purchaser
or another subsidiary of Purchaser comparable to that provided by the affected
provision prior to any such amendment.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Stock Plans and Options.
(a) Purchaser agrees to assume, as of the Closing Date, each
outstanding option to purchase shares of Symbios Common Stock set forth in
Section 3.4 of the Disclosure Schedule or as permitted by Section 5.6(b) of this
Agreement (a "Symbios Stock Option") which shall thereupon become an option to
purchase shares of Purchaser Common Stock (the "Assumed Option"). Seller shall
cause the Company to use all means necessary to effectuate the foregoing
including, without limitation, if necessary, conducting a merger into a
subsidiary of Company, amending any stock plans or agreements and assisting
Purchaser in obtaining any necessary consents from the holders of the Symbios
Stock Options. The Assumed Option shall be on the same terms and conditions as
the Symbios Stock Option except that (i) the number of shares of Purchaser
Common Stock purchasable under the Assumed Option shall be equal to the number
of shares of Symbios Common Stock purchasable under the Symbios Stock Option
immediately prior to the Closing multiplied by the Exchange Ratio (rounded down
to the nearest whole share) and (ii) the exercise price of the Assumed Option
shall be equal to the exercise price of the Symbios Stock Option immediately
prior to the Closing divided by the Exchange Ratio (rounded up to the nearest
whole cent). The "Exchange Ratio" shall equal the quotient of (x) the Fully
Diluted Per-Share Purchase Price and (y) the average of the closing prices of
Purchaser Common Stock for the five trading days immediately prior to the
Closing Date as reported on the New York Stock Exchange.
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(b) As soon as practicable after the Closing, Purchaser shall
deliver to the holders of Symbios Stock Options appropriate notice evidencing
the foregoing assumption and setting forth such participants' rights pursuant
thereto, and the grants pursuant to the Symbios Stock Option Plan shall continue
in effect on the same terms and conditions (subject to the adjustments required
by this Section 7.1 after giving effect to the transactions contemplated by this
Agreement). It is intended that Symbios Stock Options which qualified as
incentive stock options prior to the Closing continue to qualify as incentive
stock options after the Closing.
(c) As soon as practicable after the Closing, Purchaser shall take
all corporate action necessary to reserve for issuance a sufficient number of
shares of Purchaser Common Stock for delivery under all Assumed Options assumed
by Purchaser in accordance with this Section 7.1. As soon as practicable after
the Closing, Purchaser shall file a registration statement on Form S-8 (or any
successor or other appropriate forms), with respect to the shares of Purchaser
Common Stock subject to such Assumed Options and shall use its Best Efforts to
maintain the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for as long as any such Assumed Option remains outstanding.
(d) Employees of Symbios immediately prior to the Closing shall be
permitted to participate in the Purchaser Employee Stock Purchase Plan
commencing on the first enrollment date of such plan following the Closing,
subject to the terms and conditions of such plan (with employees receiving
credit, for purposes of such eligibility provisions, for service with the
Company or its predecessors or Purchaser).
7.2 Symbios Employees.
(a) Immediately prior to the Closing, Purchaser will offer
employment to substantially all persons who are employees of the Company
immediately prior to Closing, on terms which are substantially equivalent to
that which they were entitled to receive as employees of the Company immediately
prior to the Closing.
(b) Purchaser shall honor and perform, and shall cause the Company
after the Closing to honor and perform, all of its and its subsidiaries'
obligations under the employment, severance and stay-put agreements and
arrangements and all change-in-control and acceleration provisions in all
Benefit Plans in favor of all employees of the Company and its subsidiaries as
of the date hereof listed in Section 7.2((b)) of the Disclosure Schedule in
accordance with the terms thereof at Seller's expense as provided in Sections
5.15 and 5.17.
(c) Purchaser agrees that from and after the Closing it will cause
the Company to maintain (the Company package of benefits or will otherwise
provide or cause the Company to provide) a package of benefits designed
substantially to provide to such employees Purchaser's standard employee benefit
package (the "Post-Closing Benefits") for all persons who are employed by the
Company immediately prior to the Closing. Nothing in this Agreement shall limit
Purchaser's right to terminate any employee or to amend or terminate any of the
Post-Closing Benefits at any time.
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(d) Purchaser shall recognize all service with Seller, the Company
or any Subsidiary thereof, including service with any predecessor employer that
was recognized by Seller, the Company or any subsidiary thereof, for purposes of
the Post-Closing Benefits, including, but not limited to, vacation entitlement
and retirement plan participation and vesting (but not for benefit accruals),
welfare plan participation and eligibility and severance pay. No pre-existing
condition exclusions or waiting periods may be imposed under Purchaser's
employee welfare benefit plans within the meaning of Section 3(1) of ERISA upon
any employee of the Company or any of its subsidiaries. Purchaser shall permit
all employees who have satisfied any relevant eligibility requirements as of the
Closing Date to commence participation immediately in any plan that provides
Post-Closing Benefits under Section 7.1.
7.3 Ancillary Agreement. The parties shall execute the Ancillary
Agreements at or before the Closing.
7.4 Certain Actions. In addition to and not in limitation of the
parties' obligations pursuant to Section 5.1 and Section 6.1, each party shall
act diligently, expeditiously and in good faith (i) to obtain any government
clearances required for the consummation of the transactions contemplated by
this Agreement (including through compliance with the HSR Act), and (ii) to
resolve any issues relating to or arising under the HSR Act or any other
antitrust or fair trade law raised by any Governmental or Regulatory Authority,
so as to consummate the purchase and sale of Shares contemplated by this
Agreement, as promptly as practicable and in any event prior to the date set
forth in Section 10.1(c) or 10.1(d). Such actions shall include, to the extent
necessary to obtain the approval of any Governmental or Regulatory Authority
with jurisdiction over the enforcement of any laws applicable to the purchase
and sale of Shares contemplated by this Agreement: taking promptly all actions
necessary to make the filings required of such party and its Affiliates under
the HSR Act and all applicable state and foreign antitrust and fair trade laws;
responding to and substantially complying as promptly as practicable with
requests for information pursuant to the HSR Act or any state or foreign
antitrust or fair trade law; contesting, resisting or settling any challenge or
action; entering into negotiations and performing any agreements resulting
therefrom; making proposals; taking action to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order (whether temporary,
preliminary or permanent); and submitting to judicial or administrative orders.
The parties hereto will consult and cooperate with one another, and consider in
good faith the views of one another, in connection with any filings, analyses,
appearances, presentations, memoranda, briefs, arguments, opinions and proposals
made or submitted by or on behalf of any party hereto in connection with
proceedings under or relating to the HSR Act or any other federal, state or
foreign antitrust or fair trade law, and in connection with resolving any
investigation or inquiry concerning the transactions contemplated by this
Agreement under or relating to the HSR Act or any such law. Purchaser shall be
entitled to direct any proceedings or negotiations with any Governmental or
Regulatory Authority relating to any of the foregoing, provided that it shall
afford Parent, Seller and the Company a reasonable opportunity to participate
therein. Nothing in this Section shall require any party to this Agreement to
take any action that would reasonably be expected to have a Material Adverse
Effect on such party or on the Company.
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ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
8.1 Obligations of Both Parties. The obligations of both parties to
consummate the purchase and sale of the Shares pursuant to Article II are
subject to the fulfillment, at or before the Closing, of each of the following
conditions:
(a) Orders and Laws. There shall not be in effect on the Closing
Date any Order or law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Ancillary Agreements.
(b) Regulatory Consents and Approvals. All consents, approvals and
actions of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit Seller and Purchaser to perform their obligations under this
Agreement and the Ancillary Agreements and to consummate the transactions
contemplated hereby and thereby shall have been duly obtained, made or given and
shall be in full force and effect, and all waiting periods imposed by any
Governmental or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement and the Ancillary Agreements,
including the waiting period under the HSR Act and any applicable waiting
periods under foreign antitrust laws, shall have expired or been terminated.
8.2 Obligations of Purchaser. The obligations of Purchaser to purchase
the Shares pursuant to Article II are subject to the fulfillment, at or before
the Closing, of each of the following conditions (all or any of which may be
waived in whole or in part by Purchaser in its sole discretion):
(a) Representations and Warranties. The representations and
warranties made by Seller and Parent in this Agreement, disregarding (solely for
purposes of this Section 8.2(a)) disregarding any additional materiality or
Material Adverse Effect limitations therein, shall be true and correct on and as
of the Closing Date or, in the case of representations and warranties made as of
a specified date earlier than the Closing Date, on and as of such earlier date,
except where the failure of such representations and warranties to be true and
correct could not reasonably be expected to have a Material Adverse Effect on
the Company.
(b) Performance. Parent and Seller in all material respects shall
have performed and complied with, the agreements, covenants and obligations
required by this Agreement to be so performed or complied with by Seller at or
before the Closing.
(c) Officers' Certificates. Seller shall have delivered to
Purchaser (i) a certificate, dated the Closing Date and executed by the
President of Seller and/or an executive officer of the Company as appropriate,
certifying to the satisfaction of the conditions set forth in Sections 8.2((a))
and ((b)) and (ii) a certificate, dated the Closing Date and executed by the
Secretary or any Assistant Secretary of Seller, certifying as to the truth and
accuracy of, and attaching copies of the articles of incorporation, bylaws and
all board resolutions adopted in
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connection with this Agreement and the Ancillary Agreements, of Seller, in each
case in a form reasonably satisfactory to Purchaser.
(d) Third Party Consents. The consents (or in lieu thereof
waivers) listed in Schedule 8.2((d)) shall have been obtained and shall be in
full force and effect.
(e) Opinion of Counsel. Purchaser shall have received the opinions
of counsel to Seller and the Company, dated the Closing Date, with respect to
the matters described in Sections 3.1, 3.2 and 3.3 in a form to be agreed upon
by Seller and Purchaser.
(f) [Intentionally Left Blank]
(g) Financial Statements. Purchaser shall have received true and
complete copies of the audited consolidated balance sheet and statements of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the fiscal years ended December 31, 1995, 1996 and
1997, together with the notes relating thereto (which audited financial
statements shall include the unqualified opinion of Coopers & Lybrand LLP), and
the financial position and results of operations of the Company as of and for
the fiscal year ended December 31, 1997 set forth in such audited financial
statements shall not be materially less favorable than that presented in the
financial statements for such fiscal year described in Section 3.8 hereof.
(h) General Release. Seller, Parent and each director of Seller
and each officer and director of the Company shall have executed and delivered a
general release of any claims against the Company and its Affiliates (except as
any claim relates to indemnification or employment arrangements between the
Company and such individual) in a form reasonably satisfactory to Purchaser.
(i) Resignations. Each of the directors of the Company shall have
resigned and each of the officers of the Company, if requested by Purchaser,
shall have resigned from such positions.
(j) Repayment of Bridge Transactions. The Indebtedness owing to
the Company under the Upstream Bridge Loan shall be repaid in full at the
Closing. The lenders under the Bridge Transactions shall have delivered to
Seller or the Company at the Closing all documents and other instruments
necessary to release its or their respective security interests upon the assets
and/or stock of the Company and/or its subsidiaries (contingent upon payment by
the Company of the principal and interest outstanding on the Bridge Loan); and
Seller or the Company shall deliver to Purchaser at the Closing evidence of such
releases.
(k) Director and Other Options. The Director Options shall have
been canceled and terminated as described in Section 3.4 hereof and Seller and
the Company shall have taken all action required by Section 7.1 to allow the
Symbios Stock Options to be assumed by Purchaser as provided in Section 7.1.
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(l) Shares Outstanding. The Shares shall constitute all of the
issued and outstanding capital stock of the Company.
(m) Completion of Covenants. Seller shall have or concurrently
with the Closing shall have performed its obligations under Sections 5.15 and
5.17, and Seller shall have certified to Purchaser that it will perform its
obligation under Section 5.18 immediately following the Closing.
(n) Arrows West Synthetic Loan. All material steps required to
convey fee simple title to the property subject to the Arrows West Synthetic
Loan, free and clear of Encumbrances other than the Permitted Encumbrances and
the Encumbrances that shall be released on or before the Closing, shall have
been completed.
8.3 Obligations of Seller. The obligations of Seller hereunder to sell
the Shares pursuant to Article II are subject to the fulfillment, at or before
the Closing, of each of the following conditions (all or any of which may be
waived in whole or in part by Seller in its sole discretion):
(a) Representations and Warranties. The representations and
warranties made by Purchaser in this Agreement, disregarding (solely for
purposes of this Section 8.3(a)) any additional materiality or Material Adverse
Effect limitations therein, shall be true and correct on and as of the Closing
Date or, in the case of representations and warranties made as of a specified
date earlier than the Closing Date, on and as of such earlier date, except where
the failure of such representations and warranties to be true and correct could
not reasonably be expected to have a Material Adverse Effect on the Company.
(b) Performance. Purchaser in all material respects shall have
performed and complied with, the agreements, covenants and obligations required
by this Agreement to be so performed or complied with by Seller at or before the
Closing.
(c) Officers' Certificates. Purchaser shall have delivered to
Seller (i) a certificate, dated the Closing Date and executed by the President
or any Executive or Senior Vice President of Purchaser, certifying as to the
satisfaction of the conditions set forth in Sections 8.3(a) and (b) and (ii) a
certificate, dated the Closing Date and executed by the Secretary or any
Assistant Secretary of Purchaser, certifying as to the truth and accuracy of,
and attaching copies of, the articles of incorporation, bylaws and all board
resolutions adopted in connection with this Agreement and the Ancillary
Agreements, of Purchaser, in a form reasonably satisfactory to Seller.
(d) Opinion of Counsel. Seller shall have received the opinion of
counsel to Purchaser, dated the Closing Date, with respect to the matters
described in Section 4.1 and Section 4.2 in a form to be agreed upon by Seller
and Purchaser.
(e) [Intentionally Left Blank]
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(f) Release from Guarantees. Seller shall have been released from
all guarantees of any obligations or Indebtedness of the Company or any of its
subsidiaries, pursuant to releases reasonably satisfactory to Seller or
Purchaser in its discretion shall have agreed on terms reasonably acceptable to
Seller to indemnify Seller from such guarantees.
ARTICLE IX
INDEMNIFICATION
The rights and obligations of the parties under this Agreement shall be
subject to the following terms and conditions:
9.1 Survival of Representations and Warranties; Indemnification Period.
Notwithstanding any right of Purchaser fully to investigate the
business of Seller, and notwithstanding any knowledge of facts determined or
determinable by Purchaser pursuant to such investigation or right of
investigation, the representations and warranties of Purchaser, Seller and
Parent contained in this Agreement and in any certificates delivered pursuant to
Section 8.2((c)) and Section 8.3((c)) shall survive the Closing for a period of
18 months from the Closing Date except for: (a) the representations and
warranties contained in Sections 3.1, 3.2, 3.3 and 3.5 and Section 3.6 (only
with respect to Seller's or the Company's charter or by-laws), which shall
survive forever, (b) the representations and warranties contained in Section
3.16 (intellectual property), which shall survive for a period of five (5) years
from the Closing Date, (c) the representations and warranties contained in
Section 3.20 (environmental), which shall survive for a period of 10 years from
the Closing Date, and (d) the representations and warranties contained in
Section 3.9 (taxes), which shall survive until expiration of all applicable
statutes of limitations. Subsequent to the Closing Date, the provisions of this
Article IX shall be the sole and exclusive remedy for the breach of any
representations or warranties contained in this Agreement and the certificates
delivered pursuant to Section 8.2((c)) and Section 8.3((c)). Neither Parent,
Seller nor Purchaser shall have any liability whatsoever with respect to any
breach of such representations or warranties after the survival period for such
representation or warranty expires, except for claims then pending or
theretofore asserted in writing by any party and delivered to the other party in
accordance with the terms and conditions of this Agreement.
9.2 Indemnification by Parent and Seller. Subject to the provisions and
limitations herein contained, Parent and Seller hereby agrees, jointly and
severally, to indemnify, defend and hold harmless Purchaser and the Company from
and against any and all Losses, Actions, Proceedings, claims and Liabilities
which Purchaser may at any time sustain or incur from and against any and all
Losses, Actions, Proceedings, claims and Liabilities which are occasioned by,
caused by or arise out of (i) any inaccuracy in or breach of any of the
representations and warranties of Seller in this Agreement or any breach of any
covenants made by Seller in this Agreement to the extent not waived in writing
by Purchaser, or (ii) any Pre-Existing/Continuing Environmental Liabilities.
Parent and Seller shall not have any right of contribution from the
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Company with respect to any Losses, Actions, Proceedings, claims and Liabilities
claimed by Purchaser after the Closing.
9.3 Limitation of Seller's Liability. The liability of Seller under
Section 9.2 shall be limited as follows:
(a) The maximum amount payable by Seller in respect of all claims
for indemnification under this Agreement will not exceed ten percent (10%) of
the Purchase Price.
(b) No claim shall be made against Seller for indemnification
under this Agreement until the aggregate amount of all such claims against
Seller exceeds Three Million Dollars ($3,000,000), in which case Seller shall be
obligated to indemnify Purchaser for the full amount of all such claims.
(c) Purchaser shall not be entitled to recover under Section 9.2
or otherwise with respect to:
(i) the breach of any representation or warranty unless such
claim has been asserted by written notice, specifying the details of
such breach, delivered to Seller on or prior to the date on which
such representation or warranty no longer survives pursuant to
Section 9.1; or
(ii) any claim, to the extent the claim has been satisfied by
proceeds of insurance maintained by Company prior to the Closing
(Purchaser hereby agreeing to use its Best Efforts to collect the
maximum amount of insurance proceeds to which it is entitled under
such policies maintained by the Company prior to Closing).
(d) Seller will not be liable under the indemnification provisions
of Article IX to the extent that any Loss or Liability sustained by the
indemnified party results from an indemnified party's willful misconduct or
gross negligence.
9.4 Indemnification by Purchaser. Subject to the provisions and
limitations herein contained, Purchaser hereby agrees to indemnify, defend and
hold harmless Seller from and against any and all Losses which Seller may at any
time sustain or incur which are occasioned by, caused by or arise out of: (i)
any inaccuracy in or breach of any of the representations, warranties or
covenants made by Purchaser in this Agreement; or (ii) the operation of the
business of the Company after the Closing.
9.5 Limitation of Purchaser's Liability.
(a) The maximum amount payable by Purchaser in respect of all
claims for indemnification under this Agreement will not exceed ten percent
(10%) of the Purchase Price.
(b) No claim shall be made for indemnification under Section 9.4
until the aggregate amount of all such claims exceeds Three Million Dollars
($3,000,000).
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(c) Seller shall not be entitled to recover under Section 9.4 with
respect to:
(i) the breach of any representation or warranty unless such
claim has been asserted by written notice, specifying the details of
such breach, delivered to Purchaser on or prior to the first
anniversary of the Closing Date; or
(ii) any claim, to the extent the claim has been satisfied by
proceeds of insurance (Seller hereby agreeing to use its Best
Efforts to collect the maximum amount of insurance proceeds to which
it is entitled).
(d) Purchaser will not be liable under the indemnification
provisions of Article IX to the extent that any Loss or Liability results from
an indemnified party's willful misconduct or gross negligence.
9.6 Defense of Third Party Claims.
(a) The indemnified party seeking indemnification under this
Agreement shall promptly notify the indemnifying party of the assertion of any
Claim, Actions and/or Proceedings, or the commencement of any Action and/or
Proceeding by any Third Party, in respect of which indemnity may be sought
hereunder and will give the indemnifying party such information with respect
thereto as the indemnifying party may reasonably request, but failure to give
such notice shall not relieve the indemnifying party of any liability hereunder
(except to the extent that the indemnifying party has suffered actual prejudice
by such failure). The indemnifying party shall have the right, but not the
obligation, exercisable by written notice to the indemnified party within 30
days of receipt of notice from the indemnified party of the commencement of or
assertion of any Claim, Action, and/or Proceeding by a Third Party in respect of
which indemnity may be sought hereunder (a "Third-Party Claim"), to assume the
defense and control at its sole expense the settlement of such Third-Party Claim
that (i) involves (and continues to involve) solely money damages or (ii)
involves (and continues to involve) claims for both money damages and equitable
relief against the Indemnified Party that cannot be severed, where the claims
for money damages are the primary claims asserted by the Third Party and the
claims for equitable relief are incidental to the claims for money damages, and
where the indemnified party reasonably determines (and continues to reasonably
determine) that defense of the claim by the indemnifying party will not have a
material adverse effect on the indemnified party.
(b) The indemnifying party or the indemnified party, as the case
may be, shall have the right to participate in (but not control), at its own
expense, the defense of any of the aforesaid Third-Party Claims that the other
is defending, as provided in this Agreement.
(c) The indemnifying party, if it has assumed the defense of any
of the aforesaid Third-Party Claims as provided in this Agreement, shall not,
without the indemnified party's prior written consent, enter into any compromise
or settlement that (i) results in any liability to the indemnified party, (ii)
commits the indemnified party to take, or to forbear to take, any action or
(iii) does not provide for a complete release by such Third Party of the
indemnified party. The indemnifying party shall not, without the indemnified
party's prior written consent,
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enter into any compromise or settlement where the amount of such compromise or
settlement would cause the applicable cap on the indemnifying party's liability,
as provided herein, to be exceeded. The indemnified party shall have the sole
and exclusive right to settle any Third-Party Claim, with the consent of the
indemnifying party, which shall not be unreasonably withheld or delayed, on such
terms and conditions as it deems reasonably appropriate, to the extent such
Third-Party Claim involves equitable or other nonmonetary relief against the
indemnified party, and shall have the right to settle, at the indemnifying
party's sole expense, any Third-Party Claim involving money damages for which
the indemnifying party has not assumed the defense pursuant to this Section 9.6
with the written consent of the indemnifying party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, the indemnified
party shall have the right to employ separate counsel at the indemnifying
party's expense and to control its own defense of any such asserted liability if
(i) there are or may be legal defenses available to such indemnified party that
are different from or additional to those available to the indemnifying party or
(ii) in the reasonable opinion of counsel to such indemnified party, conflict or
potential conflict exists between the indemnifying party and such indemnified
party that would make such separate representation advisable.
9.7 Procedure and Dispute Resolution.
(a) If an indemnified party shall have a claim of indemnification
pursuant to this Article IX (an "Indemnity Claim"), it will promptly give
written notice thereof (the "Claim Notice") to the indemnifying party or
parties, including therein a brief description of the facts upon which such
claim is based and the amount thereof, to the extent that it can be ascertained
but failure to do so shall not affect any rights or remedies of the indemnified
party (except to the extent of any actual prejudice caused thereby).
(b) In the event that the indemnifying party disputes the validity
or amount of any Indemnity Claim, prior to taking any other action, the matter
shall be referred to responsible executives of the affected parties for
consideration and resolution. If the parties have not otherwise resolved the
dispute, they shall meet in person within thirty (30) days after the delivery of
the Claim Notice and exercise their Best Efforts to settle the matter amicably.
(c) If any such dispute is not settled within twenty (20) Business
Days from the delivery of the Claim Notice, such dispute shall, at the demand of
either party, be referred to and decided by arbitration in accordance with the
provisions of Section 9.8.
9.8 Arbitration.
(a) Within twenty (20) days after notice of a dispute or claim is
given by any party, appropriate senior executives of the parties shall meet and
make a good faith attempt to negotiate an amicable resolution of such dispute or
claim before initiating arbitration proceedings. Nothing herein, however, shall
prohibit either party from initiating arbitration proceedings if such party
would be substantially prejudiced by a failure to act during the twenty day
negotiation period.
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(b) Any dispute or claim arising under this Article IX shall be
finally settled by binding arbitration in San Jose, California under the
American Arbitration Association International Arbitration Rules, by three
arbitrators. Each party shall appoint one arbitrator; the third arbitrator, who
shall be the chair of the arbitration tribunal, shall be appointed by the other
two arbitrators. Any appointment not made within twenty (20) days after notice
to do so from the American Arbitration Association ("AAA") shall be made by the
AAA.
(c) The arbitrators shall have the power to decide all questions
of arbitrateability. The arbitrators shall have the power to order pre-hearing
discovery of documents, witness lists, and a limited number of discovery
depositions, not to exceed three per side. At the request of either party, the
arbitrators will enter an appropriate protective order to maintain the
confidentiality of information produced or exchanged in the course of the
arbitration proceedings.
(d) The parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or
conservatory relief, as necessary, without breach of this arbitration agreement
and without any abridgment of the powers of the arbitrators. The arbitrators
shall also have the power to grant temporary or permanent injunctive or other
equitable relief, including any interim or conservatory relief, as necessary.
(e) The parties agree not to submit a dispute subject to this
Section 9.8 to any federal, state, local or foreign court except as may be
necessary to enforce the arbitration procedures of this Section 9.8 or to
enforce an arbitration award.
(f) The arbitrators may award to the prevailing party, if any, as
determined by the arbitrators, its costs and fees incurred in connection with
any arbitration or related judicial proceeding hereunder. Cost and fees awarded
may include, without limitation, attorneys' fees, expert and other witness fees,
travel expenses, and out-of-pocket expenses (including, without limitation, such
expenses as copying, telephone, facsimile, postage, and courier fees). Judgment
on the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
9.9 Adjustment to Purchase Price. Amounts payable in respect of the
parties' indemnification obligations shall be treated as an adjustment to the
Purchase Price.
9.10 Additional Environmental Matters. Subject to the limitations set
forth in this Article IX, the obligations and rights of the Purchaser and Seller
with respect to (i) Pre-Existing/Continuing Environmental Liabilities under this
Article IX and (ii) the representations made in Section 3.20 hereof
(collectively the "Environmental Covenants") are in addition to, independent
from, and severable from the rights and obligations of said parties under all
other provisions of this Agreement. It is expressly acknowledged by all parties
hereto that neither the acts or omissions of any party hereto, nor any failure
of any condition or breach of a representation contained elsewhere in this
Agreement, shall impair the right of the parties to enforce any Environmental
Covenant for its benefit, it being understood that the Environmental Covenants
are being given in consideration of the closing of the transactions contemplated
by this Agreement and not in consideration of future performance or any
representation, and are
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intended to allocate risk of loss and to create rights and obligations with
respect to the matters covered by the Environmental Covenants between the
parties without regard to the conduct of any person. No failure of any person to
exercise its rights under the Environmental Covenants and no delay in exercising
any right or remedy hereunder, at law or in equity, shall operate as a waiver of
the agreements contained in the Environmental Covenants; nor shall the parties
be estopped to exercise any right or remedy at any future time because of any
such failure or delay; nor shall any single or partial exercise of any such
right or remedy preclude any other or future exercise thereof or the exercise of
any other right or remedy. The Environmental Covenants shall survive the sale,
transfer, assignment, or hypothecation of any ownership interest in a party
benefited hereby or obligated hereunder and the sale, transfer, assignment, or
hypothecation of the Company, or any portion thereof or interest therein, by
Purchaser to any person. Except as otherwise set forth herein, the Environmental
Covenants are not intended to create, and shall not be construed to create, any
rights or remedies in any person other than the parties hereto; and no other
person shall assert any rights as a third party beneficiary under the
Environmental Covenants. Except as expressly provided herein or contemplated
hereby, nothing in the Environmental Covenants is intended to modify, relieve or
discharge the obligations or liability of any person (other than the parties
hereto or otherwise as expressly provided herein) with respect to the matters
covered by the Environmental Covenants.
ARTICLE X
TERMINATION
10.1 Termination. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written agreement of
Seller and Purchaser;
(b) at any time before the Closing, by Seller or Purchaser, in the
event that any Order or law becomes effective restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or any of the Ancillary Agreements,
upon notice to the non-terminating party by the terminating party;
(c) at any time after September 1, 1998, by Seller, by notice to
Purchaser if the Closing shall not have occurred on or before such date and the
failure of the Closing to occur is not caused by a material breach of this
Agreement by Seller or Parent, provided, that the foregoing date shall be
extended to November 1, 1998 if the Closing has failed to occur on or before
September 1, 1998 because the waiting period has not expired or been terminated
or approval or clearance has not been obtained under the HSR Act or any foreign
antitrust, free trade or similar law;
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(d) at any time after September 1, 1998, by Purchaser, by notice
to Seller if the Closing shall not have occurred on or before such date and the
failure of the Closing to occur is not caused by a material breach of this
Agreement by Purchaser, provided, that the foregoing date shall be extended to
November 1, 1998 if the Closing has failed to occur on or before September 1,
1998 because the waiting period has not expired or been terminated or approval
or clearance has not been obtained under the HSR Act or any foreign antitrust,
fair trade or similar law;
(e) at any time before the Closing, by Seller, by notice to
Purchaser, in the event of a material breach of this Agreement by Purchaser
which if uncured would cause one or more of the conditions to Closing set forth
in Article VIII not to be satisfied and which remains uncured for ten (10) days
after notice thereof is given to Purchaser by Seller; and
(f) at any time before the Closing, by Purchaser, by notice to
Seller, in the event of a material breach of this Agreement by Seller which if
uncured would cause one or more of the conditions to Closing set forth in
Article VIII not to be satisfied and which remains uncured for ten (10) days
after notice thereof is given to Seller by Purchaser.
10.2 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 10.1, this Agreement will forthwith become null and void,
and there will be no liability or obligation on the part of Seller or Purchaser
(or any of their respective officers, directors, employees, agents or other
representatives or Affiliates), except that the provisions with respect to fees
and expenses in Sections 10.3 and 12.3 and confidentiality in Section 12.5 will
continue to apply following any such termination. Notwithstanding any other
provision in this Agreement to the contrary, upon termination of this Agreement
pursuant to Section 10.1 (other than pursuant to Section 10.1((a))) Seller will
remain liable to Purchaser for any willful breach of Section 5.8 ("Fulfillment
of Conditions") of this Agreement by Seller existing at the time of such
termination, and Purchaser will remain liable to Seller for any willful breach
of Section 6.2 ("Fulfillment of Conditions") of this Agreement by Purchaser
existing at the time of such termination, and Seller or Purchaser may seek such
remedies, including damages and fees of attorneys, against the other with
respect to any such breach as are provided in this Agreement or as are otherwise
available at law or in equity.
10.3 Termination and Nonconsummation Fees.
(a) Nonconsummation Fee. In the event that the Closing does not
occur on or before the seventy-fifth (75th) day after the date of this Agreement
(the "Trigger Date") because the waiting period has not expired or been
terminated or approval or clearance has not been obtained under the HSR Act or
any foreign antitrust, fair-trade or other similar law, and Seller and its
Affiliates have performed in all material respects their obligations pursuant to
Section 5.1 relating to the filing of notification and report forms and other
information pursuant to the HSR Act or such other law, and neither Seller nor
Parent is in material breach of this Agreement, then, on the first business day
following the Trigger Date and the first business day of each month thereafter
until the earlier of the termination of this Agreement pursuant to Section 10.1
or the Closing, Purchaser shall pay to Seller, in lawful money of the United
States of America, by wire
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transfer of immediately available funds to an account designated by Seller, an
amount equal to one-half of one percent of the Purchase Price with the aggregate
of such payments to be credited against the Purchase Price at the Closing.
(b) Termination Fee. In the event that this Agreement is
terminated by Seller pursuant to Section 10.1(e), Purchaser shall pay to Seller
no later than five (5) Business Days after such termination becomes effective,
in lawful money of the United States of America, by wire transfer of immediately
available funds to an account designated by Seller, an amount equal to three
percent (3%) of the Purchase Price.
ARTICLE XI
TAX MATTERS
11.1 Section 338 Election.
(a) Upon the written request of Purchaser to be made within 180
days of the Closing Date (i) Seller and Parent shall join with Purchaser in
making a timely election under Section 338(h)(10) of the Code and any
corresponding elections under state and local tax laws (collectively, the
"Election") with respect to the purchase and sale of Shares pursuant to this
Agreement (the "Acquisition"), (ii) Seller and Parent shall cooperate with
Purchaser to take all actions necessary and appropriate (including executing and
filing Form 8023 and such other forms, returns, elections, schedules and other
documents as may be required) to effect and preserve a timely Election in
accordance with Section 338(h)(10) of the Code or any successor provisions (and
all corresponding state and local tax laws) and (iii) Purchaser, Seller and
Parent shall report the Acquisition pursuant to this Agreement consistent with
the Election.
(b) In connection with the Election, Purchaser shall provide to
Seller and Parent a schedule which sets forth the allocation (the "Acquisition
Allocation Schedule") of the Purchase Price among the assets of the Company.
Such allocation shall be made in accordance with Section 338(h)(10) of the Code
and any applicable Treasury Regulations. The parties hereto shall take no
position inconsistent with the Acquisition Allocation Schedule.
11.2 Returns; Indemnification; Liability for Taxes.
(a) Seller and Parent shall prepare and file (or cause to be
prepared and filed) on a timely basis all Tax Returns with respect to the
Company for all taxable periods ending on or before the Closing Date ("Company
Tax Returns") and shall pay directly or promptly reimburse Purchaser as provided
hereunder, and shall indemnify and hold Purchaser harmless against and from (i)
all Taxes of the Company for all taxable years or periods which end on or before
the Closing Date (including but not limited to Taxes attributable to the Section
338 Elections as provided in Section 11.1); (ii) all Taxes for all taxable years
or periods of all members or subsidiaries of any affiliated, unitary or combined
group of which the Company is or
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has been a member prior to the Closing Date; and (iii) with respect to any
taxable period commencing before the Closing Date and ending after the Closing
Date (a "Straddle Period") all Taxes of the Company attributable to the portion
of the Straddle Period prior to and including the Closing Date (the "Pre-Closing
Period"). For purposes of this Agreement, the portion of any Tax that is
attributable to the Pre-Closing Period shall be (i) in the case of a Tax that is
not based on net income, gross income, sales, premiums or gross receipts, the
total amount of such Tax for the period in question multiplied by a fraction,
the numerator of which is the number of days in the Pre-Closing Period, and the
denominator of which is the total number of days in such Straddle Period, and
(ii) in the case of a Tax that is based on any of net income, gross income,
sales, premiums or gross receipts, the Tax that would be due with respect to the
Pre-Closing Period if such Pre-Closing Period were a separate taxable period,
except that exemptions, allowances, deductions or credits that are calculated on
an annual basis (such as the deduction for depreciation or capital allowances)
shall be apportioned on a per diem basis. For purposes hereof, all Taxes which
are the subject of this Article XI arising from the Acquisition, including Taxes
resulting from the transactions contemplated by the Election, shall be deemed to
be Taxes attributable to the Pre-Closing Period and shall be the responsibility
of Seller and Parent.
(b) Purchaser shall prepare and file (or cause to be prepared and
filed) on a timely basis all Tax Returns of Company relating to periods ending
after the Closing Date and shall pay, and shall indemnify and hold Seller
harmless against and from (i) all Taxes of the Company for any taxable year or
period commencing after the Closing Date; and (ii) all Taxes of the Company for
any Straddle Period (other than Taxes attributable to the Pre-Closing Period
which if paid by Purchaser pursuant to this Section 11.2(b)) shall be promptly
reimbursed by Seller).
(c) Notwithstanding any other provision of this Section 11.2,
Purchaser shall pay, and shall hold Seller harmless against and from any Taxes
(i) attributable to transactions not in the ordinary course of business
occurring on the Closing Date after Purchaser's purchase of the Shares hereunder
or (ii) imposed by any state or local taxing authority in which Seller is doing
business as of the date of this Agreement and for which a Tax Return for the
period including the date of this Agreement and the Closing Date is timely filed
as a result of any election under Section 338(g) of the Code (or any comparable
election under state law) if such state or local taxing authority does not allow
or respect an election under Section 338(h)(10) (or any comparable or resulting
election under state law) with respect to the purchase of Shares contemplated
hereby.
11.3 Refunds and Credits.
(a) All refunds or credits of Taxes for or attributable to taxable
years or periods of the Company ending on or before the Closing Date (or the
Pre-Closing Period, in the case of a Straddle Period) which are not reflected on
the Closing Balance Sheet shall be for the account of Seller; all other refunds
or credits of Taxes, for or attributable to the Company shall be for the account
of Purchaser. Following the Closing, Purchaser shall cause the Company to
forward to Seller any such refunds or credits due Seller pursuant to this
section after receipt or realization thereof by Purchaser, and Seller shall
promptly forward (or cause to be forwarded) to
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Purchaser any refunds or credits due to Purchaser pursuant to this section after
receipt or realization thereof by Seller, in each case in accordance with the
provisions of subsection (b) below.
(b) Any payments or refunds or credits for Taxes required to be
paid under this Agreement shall be made within 10 Business Days of the receipt
of any refund, as the case may be. Any payments not made within such time period
shall be subject to an interest charge of 6% per annum.
11.4 Termination of Tax Sharing Agreements. Seller and Parent hereby
agree and covenant that obligations of or to the Company pursuant to the Tax
Sharing Agreement shall be extinguished as of the Closing Date.
11.5 Conduct of Audits and Other Procedural Matters. Each party shall, at
its own expense, control any audit or examination by any Taxing Authority, and
have the right to initiate any claim for refund or amended return, and contest,
resolve and defend against any assessment, notice of deficiency or other
adjustment or proposed adjustment of Taxes ("Proceedings") for any taxable
period for which that party is charged with payment or indemnification
responsibility under this Agreement. Each party shall promptly forward to the
other in accordance with Section 12.1 all written notifications and other
written communications, including if available the original envelope showing any
postmark, from any taxing authority received by such party or its affiliates
relating to any liability for Taxes for any taxable period for which such other
party or any of its affiliates is charged with payment or indemnification
responsibility under this Agreement and each indemnifying party shall promptly
notify, and consult with, each indemnified party as to any action it proposes to
take with respect to any liability for Taxes for which it is required to
indemnify another party and shall not enter into any closing agreement or final
settlement with any Taxing Authority with respect to any such liability without
the written consent of the indemnified parties, which consent shall not be
unreasonably withheld. In the case of any Proceedings relating to any Straddle
Period, Purchaser shall control such Proceedings and shall consult in good faith
with Seller as to the conduct of such Proceedings. Seller shall reimburse
Purchaser for such portion of the costs, including legal costs, of conducting
such Proceedings as is represented by the portion of the Tax with respect to
such Straddle Period for which Seller is liable pursuant to this Agreement. Each
party shall, at the expense of the requesting party, execute or cause to be
executed any powers of attorney or other documents reasonably requested by such
requesting party to enable it to take any and all actions such party reasonably
requests with respect to any Proceedings which the requesting party controls.
The failure by a party to provide timely notice under this subsection shall
relieve the other party from its obligations under this Article XI with respect
to the subject matter of any notification not timely forwarded, to the extent
the other party has suffered a loss or other economic detriment because of such
failure to provide notification in a timely fashion.
11.6 Assistance and Cooperation. After the Closing Date, each of Seller
and Purchaser shall (and cause their respective Affiliates to):
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(i) assist the other party in preparing any Tax Returns
which such other party is responsible for preparing and filing in
accordance with Section 11.2.
(ii) cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns of the
Company or its subsidiaries;
(iii) make available to the other and to any taxing authority
as reasonably requested all information, records, and documents
relating to Taxes of the Company or its subsidiaries;
(iv) provide timely notice to the other in writing of any
pending or threatened Tax audits or assessments of the Company or
its subsidiaries for taxable periods for which the other may have a
liability under this Article XI; and
(v) furnish the other with copies of all correspondence
received from any taxing authority in connection with any Tax audit
with respect to any taxable period for which the other may have a
liability under this Article XI.
11.7 FIRPTA Certificate. At or prior to the Closing, Seller shall provide
Purchaser with a certificate described in Treas. Reg. Section 1.1445-2(b)(2) to
the effect that, as contemplated by such certificate, Seller is not a foreign
corporation, foreign partnership, foreign trust or foreign estate (as those
terms are defined in the Code and Treasury Regulations).
ARTICLE XII
MISCELLANEOUS
12.1 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to the parties at the following addresses or facsimile numbers:
If to Purchaser, to:
LSI Logic Corporation
1551 McCarthy Boulevard
Milpitas, California 95035
Facsimile No.: (408) 433-6896
Attn: General Counsel
with a copy to:
Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
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Palo Alto, California 94304
Facsimile No.: (650) 493-9300
Attn: Larry W. Sonsini, Esq.
Judy O'Brien, Esq.
If to Seller, to:
Hyundai Electronics America
3101 North First Street
Legal Department
San Jose, California 95134
Facsimile No.: 408-232-8194
Attn: Dr. C.S. Park
with a copy to:
Gray Cary Ware & Freidenrich LLP
400 Hamilton Avenue
Palo Alto, CA 94301
Facsimile No.: (650) 327-3699
Attn: Gregory M. Gallo, Esq.
Rod J. Howard, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 12.1, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 12.1, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section 12.1, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section 12.1). Any party from time to time may change
its address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other party hereto.
12.2 Entire Agreement. This Agreement and the Ancillary Agreements
supersede all prior discussions and agreements between the parties with respect
to the subject matter hereof and thereof, and contain the sole and entire
agreement between the parties hereto with respect to the subject matter hereof
and thereof.
12.3 Expenses. Except as otherwise expressly provided in this Agreement
(including as provided in Section 5.14, Section 5.15, Section 5.17, Section 9.8,
Section 10.2 and Section 10.3), whether or not the transactions contemplated
hereby are consummated, Purchaser will pay its own costs and expenses, and the
Company will pay its and Seller's costs and expenses, incurred in connection
with the negotiation, execution and closing of this Agreement and the Ancillary
Agreements and the transactions contemplated hereby and thereby (including
regulatory filings and proceedings).
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12.4 Public Announcements. At all times at or before the Closing, Seller
and Purchaser will not issue or make any reports, statements or releases to the
public or generally to the employees, customers, suppliers or other persons to
whom Seller or the Company or any of their respective subsidiaries sells goods
or provides services or with whom Seller or the Company or any of their
respective subsidiaries otherwise has significant business relationships with
respect to this Agreement, or the transactions contemplated hereby without the
consent of the other, which consent shall not be unreasonably withheld. If
either party is unable to obtain the approval of its public report, statement or
release from the other party and such report, statement or release is, in the
opinion of legal counsel to such party, required by law in order to discharge
such party's disclosure obligations, then such party may make or issue the
legally required report, statement or release and promptly furnish the other
party with a copy thereof. Seller and Purchaser will also obtain the other
party's prior approval of any press release to be issued immediately following
the Closing announcing the consummation of the transactions contemplated by this
Agreement; provided, however, that nothing herein shall prevent Purchaser from
disclosing any of the information contained in the Company's draft Financial
Statements of December 31, 1997.
12.5 Confidentiality. Each party hereto will hold, and will cause its
Affiliates and, in the case of Purchaser, any person who has provided or who is
considering providing financing to Purchaser to finance all or any portion of
the Purchase Price, and their respective Representatives, to hold in strict
confidence from any person (other than any such Affiliate, person who has
provided, or who is considering providing, financing or Representatives
thereof), unless (i) compelled to disclose by judicial or administrative process
(including without limitation in connection with obtaining the necessary
approvals of this Agreement and the transactions contemplated hereby of
Governmental or Regulatory Authorities) or by other requirements of law or (ii)
disclosed in an Action or Proceeding brought by a party hereto in pursuit of its
rights or in the exercise of its remedies hereunder (but only to the extent such
party uses reasonable efforts to seek judicial protection from the public
disclosure of such information), all documents and information concerning the
other party or any of its Affiliates furnished to it by the other party or such
other party's Representatives in connection with this Agreement or the
transactions contemplated hereby, except to the extent that such documents or
information can be shown to have been (a) previously known by the party
receiving such documents or information; (b) in the public domain (either prior
to or after the furnishing of such documents or information hereunder) through
no fault of such receiving party, or (c) later acquired by the receiving party
from another source if such source is under no obligation to another party
hereto to keep such documents and information confidential; provided that
following the Closing the foregoing restrictions will not apply to Purchaser's
use of documents and information concerning the Company and its subsidiaries
furnished by Seller hereunder. In the event the transactions contemplated hereby
are not consummated, upon the request of the other party, each party hereto
will, and will cause its Affiliates, any person who has provided, or who is
providing, financing to such party and their respective Representatives to,
promptly (and in no event later than three (3) business days after such request)
redeliver or cause to be redelivered all copies of confidential documents and
information furnished by the other party in connection with this Agreement or
the transactions contemplated hereby and destroy or cause to be destroyed all
notes, memoranda, summaries, analyses, compilations and other writings related
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<PAGE> 59
thereto or based thereon prepared by the party furnished such documents and
information or its Representatives.
12.6 Further Assurances; Post-Closing Cooperation.
(a) Subject to the terms and conditions of this Agreement, at any
time or from time to time after the Closing, each of the parties hereto shall
execute and deliver such other documents and instruments, provide such materials
and information and take such other actions as may reasonably be necessary to
fulfill its obligations under this Agreement and the Ancillary Agreements to
which it is a party.
(b) Following the Closing, each party will afford the other party,
its counsel and its accountants, during normal business hours, reasonable access
to the books, records and other data relating to the Company in its possession
with respect to periods prior to the Closing and the right to make copies and
extracts therefrom, and will make their respective personnel reasonably
available for interviews, depositions and testimony in any legal matter
concerning transactions, operations or activities, including treatment, storage,
transportation, disposal, recycling and handling of Hazardous Material or
remedial action under Environmental Requirements, relating to the Company with
respect to periods prior to the Closing Date, to the extent that such access and
cooperation may be reasonably required by the requesting party in connection
with (i) the preparation of Tax Returns, (ii) the determination or enforcement
of rights and obligations under this Agreement, (iii) compliance with the
requirements of any Governmental or Regulatory Authority, or (iv) in connection
with any actual or threatened Action or Proceeding. Further, each party agrees
for a period extending six (6) years after the Closing Date not to destroy or
otherwise dispose of any such books, records and other data unless such party
shall first offer in writing to surrender such books, records and other data to
the other party and such other party shall not agree in writing to take
possession thereof during the ten (10) day period after such offer is made.
(c) If, in order properly to prepare its Tax Returns, other
documents or reports required to be filed with Governmental or Regulatory
Authorities or its financial statements or to fulfill its obligations hereunder,
it is necessary that a party be furnished with additional information, documents
or records relating to the Business or Condition of the Company not referred to
in paragraph (b) above, and such information, documents or records are in the
possession or control of the other party, such other party agrees to use its
Best Efforts to furnish or make available such information, documents or records
(or copies thereof) at the recipient's request, cost and expense. Any
information obtained by Seller in accordance with this paragraph shall be held
confidential by Seller in accordance with Section 12.5.
(d) Notwithstanding anything to the contrary contained in this
Section, if the parties are in an adversarial relationship in litigation or
arbitration, the furnishing of information, documents or records in accordance
with any provision of this section shall be subject to applicable rules relating
to discovery.
12.7 Waiver. Any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set
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forth in a written instrument duly executed by or on behalf of the party against
whom such waiver is asserted. No waiver by any party of any term or condition of
this Agreement, in any one or more instances, shall be deemed to be or construed
as a waiver of the same or any other term or condition of this Agreement on any
future occasion. All remedies, either under this Agreement or by law or
otherwise afforded, shall be cumulative and not alternative.
12.8 Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.
12.9 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other person other
than any person entitled to indemnity under Article IX.
12.10 No Assignment; Binding Effect. Parent, Seller and Company
acknowledge that Purchaser may change its jurisdiction of incorporation prior to
the Closing Date. Except for an assignment by Purchaser in connection with a
merger consummated for the purpose of effecting a change in Purchaser's
jurisdiction of incorporation, neither this Agreement nor any right, interest or
obligation hereunder may be assigned by any party hereto without the prior
written consent of the other party hereto and any attempt to do so will be void.
Subject to the preceding sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective
successors and assigns.
12.11 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially affected thereby, (a) such provision will be fully severable, (b)
this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom, and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in economic and legal effect
to such illegal, invalid or unenforceable provision as may be possible.
12.12 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to a contract
executed and performed in such state, without giving effect to the conflicts of
laws principles thereof.
12.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
12.14 Construction. The parties hereby acknowledge and agree that the
drafting of this Agreement has been a collaborative effort and that no party
shall be deemed to be the sole or primary drafter. Any rule or provision of law
which provides that a contract or agreement is to be construed against the
author of the contract or agreement shall not apply to this Agreement,
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the Ancillary Agreements or the documents attached hereto as exhibits or
schedules hereto or thereto.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officer of each party hereto as of the date first above
written.
LSI LOGIC CORPORATION
By: /s/ R. DOUGLAS NORBY
--------------------------------------
Name: R. Douglas Norby
Title: Executive Vice President
HYUNDAI ELECTRONICS AMERICA
By: /s/ DR. C. S. PARK
--------------------------------------
Name: Dr. C. S. Park
Title: President
HYUNDAI ELECTRONICS INDUSTRIES CO., LTD.
By: /s/ DR. C. S. PARK
--------------------------------------
Name: Dr. C. S. Park
Title: Executive Vice President
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EXHIBIT A
INTELLECTUAL PROPERTY TERM SHEET
1. Dissolve the February 16, 1995 (i) Patent Agreement among HEI, HEA and
Symbios and (ii) Patent Agreement between HEA and Symbios (the "Patent
Agreements"). (Completed in the Termination And License Agreement, dated
2/25/98 (the "TLA") which will be amended and restated as set forth
below.)
2. Amend and restate the February 25, 1998 Termination and License Agreement
between HEI, HEA and Symbios. The definition of "HEA Patents" and "SYMBIOS
Patents" in the proposed Amendment to Termination And License Agreement
("Amendment Agreement") will be used in the Amended and Restated
Termination and License Agreement ("Amended and Restated TLA").
3. Symbios assigns to HEA Symbios's interest in the "HEA Patents" per the
terms of section 2.02 of the TLA.
HEA grants to Symbios and Purchaser a non-exclusive, royalty-free,
transferable, life-of-patents license under the "HEA Patents" with the
right to sublicense to any third party. HEA/HEI agree not to grant further
licenses under the HEA Patents to a third party except to grant licenses
when included with a license of HEA's or HEI's entire patent portfolio as
part of a patent cross-license.
Following the sublicense of the foregoing license rights to any third
party, Symbios will provide attorneys' eyes-only notice of the identity of
the relevant sublicensee. No consent will be required to grant such a
sublicense.
The "HEA Patents" will be defined as set forth in Amendment Agreement.
4. HEA (and HEI, to the extent relevant) assigns to Symbios its entire
ownership interest in all copyrights, trademarks, mask works and trade
secrets either (i) acquired pursuant to the November 8, 1994 Agreement for
the Purchase and Sale of Assets by and between AT&T GIS and HEA or (ii)
which are otherwise used in or necessary to the operation of the Symbios
business. (All registered copyrights, maskworks, and trademarks will be
scheduled.)
5. HEA (and HEI, to the extent relevant) assigns to Symbios its entire
ownership interest in the Symbios Patents, as well as the exclusive right
to license and enforce the Symbios Patents.
The "Symbios Patents" will be defined as set forth in the Amendment
Agreement.
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6. Symbios grants to HEA a non-exclusive, royalty-free, license to December
31, 2015, under the Symbios Patents. HEA shall not have the right to
sublicense the Symbios Patents to third parties.
7. HEI and HEA assign to Symbios any other ownership interests they may have
in the intellectual property used in the Symbios business.
8. HEI (and HEA, to the extent relevant) grants to Symbios and Purchaser a
non-exclusive, royalty-free, license to December 31, 2015, under the HEI
Patents to make, have made, use, import and sell Symbios Products and to
practice any process or method for the design or manufacture of Symbios
Products currently practiced or under development by Symbios and any
improvement to such processes. Symbios Products shall mean all current
products manufactured or sold by Symbios, all improvements and
enhancements to such products, any product under development and new
products which are functional continuations or extensions of the current
Symbios products. This license shall not extend to any current products
manufactured or sold by Purchaser, all improvements and enhancements to
such products, any product under development or new products which are
functional continuations or extensions of Purchaser's current products.
"HEI Patents" shall be defined as set forth in section 1.04 of the TLA.
Except as provided in paragraph 12, this license is not assignable or
transferable to any third party.
9. HEA assigns to Purchaser its rights under the Technology License Agreement
among AT&T GIS, Symbios and HEA, including the license rights to AT&T
patents.
10. HEI agrees to take such actions as may be reasonably necessary to allow
Symbios to maintain its rights under existing HEI cross-licenses, to the
extent permitted by such licenses, without payment of money required by
HEI.
11. Unless otherwise provided, the rights of the parties may be extended to
their respective affiliates.
12. If Purchaser sells any part of the Symbios business, including the storage
business operations of Symbios, prior to the third anniversary of the
Closing Date, HEI shall grant to the purchaser of such business a
royalty-free license of the same scope granted to Symbios and Purchaser in
Section 8 above with respect to the business acquired by such purchaser.
13. HEA shall retain 100% ownership of its half interest in the MPD Patents.
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14. The patent licenses described in paragraphs 3, 6 and 8 are assignable or
transferable (if at all) only as provided in those paragraphs. All other
licenses and rights to any intellectual property licensed or transferred
by HEI and/or HEA shall be fully transferable or assignable, in whole or
in part, by Symbios to Purchaser, or sublicensed by Purchaser.
15. The definitions of Symbios Patents and HEA Patents will be updated at the
closing with the final lists of patents and applications.
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<PAGE> 1
EXHIBIT 2.2
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO THE STOCK PURCHASE AGREEMENT (the "Agreement"),
dated as of the 6th day of August, 1998, is entered into by and between LSI
Logic Corporation, a Delaware corporation ("LSI"), Hyundai Electronics
Industries Co., Ltd., a Korean corporation ("HEI"), and Hyundai Electronics
America, a California corporation ("HEA").
RECITALS
WHEREAS, LSI, HEA and HEI have entered into that certain Stock Purchase
Agreement dated as of June 28, 1998 (the "Purchase Agreement"), with respect to
the sale of all outstanding capital stock of Symbios, Inc., a Delaware
corporation (the "Company") to LSI. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in the Purchase Agreement.
WHEREAS, LSI, HEA and HEI desire to amend the Purchase Agreement as set
forth herein.
WHEREAS, the parties agree that it is in the best interests of each of
them, and their respective shareholders, to make the following amendments,
modifications, or changes to or clarifications of, the Purchase Agreement, each
such change, modification, change or clarification to be effective upon the
Closing.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
AGREEMENT
1. Amendment and Termination of Symbios Logic 401(k) Savings Plan.
1.1 Subject to and upon the occurrence of the Closing, the Company
shall make a contribution to Participant's Retirement Performance Accounts (the
"RPA Contribution") pursuant to the Retirement Performance Account Plan (the
"RPA Plan") for the period commencing January 1, 1998 and ending June 30, 1998,
on behalf of each Plan Participant (as defined in the Plan) who is an employee
of the Company on June 30, 1998, subject to the following: the IBIT Objective of
the 1998 Business Plan Target shall be pro rated through June 30, 1998, and
shall be based upon Participant's earnings through June 30, 1998 (rather than
Annual Earnings (as defined in the RPA Plan), such contribution to be equal to
2.5% of the Compensation of Eligible Participants (as defined in the Plan).
Thereupon the Retirement Performance Account Plan shall be terminated.
1.2 Subject to and upon the occurrence of the Closing, the Company
shall amend the Symbios Logic 401(k) Savings Plan (the "Savings Plan") to
provide that the Company shall make an additional matching contribution on
behalf of each participant who is an employee of the Company as of the day
immediately preceding the Closing. The additional matching contribution shall be
made dollar-for-dollar on the Participant's Employee Contributions (as defined
in the Savings Plan) up to a maximum of 2.25% of Compensation (as defined in the
<PAGE> 2
Savings Plan). Thereafter, the Savings Plan shall be terminated effective as of
the day immediately preceding the Closing (the "Termination Date").
1.3 The accounts of each Participant in the Savings Plan shall be
100% vested as of the Termination Date.
1.4 Subject to and upon the occurrence of the Closing, the assets
of the Savings Plan shall be distributed to the Savings Plan participants (or,
as applicable, beneficiaries thereof) entitled to benefits under the Savings
Plan as soon as practical, subject, however, to receipt of such Internal Revenue
Service determination letter as any officer of the Company or successor thereof
may, in his discretion, request.
1.5 Following the Termination Date, the Savings Plan, and its
related trust, shall continue to be administered in accordance with the terms
thereof (provided that no further contributions shall be made to the Savings
Plan after the Termination Date, except for such contributions as may have been
allocated prior to the Termination Date, and no employees shall enter the
Savings Plan after the Termination Date) until all Savings Plan assets have been
distributed to the Savings Plan participants.
2. Amendment to Symbios Logic Executive Retirement Plan.
2.1 The Company shall amend the Symbios Logic Supplemental
Executive Retirement Plan (the "Plan") to clarify that the Closing shall not
trigger a termination of employment for purposes of the Plan with respect to
those employees of the Company who continue to be employed by LSI as the
acquiring corporation after the Closing.
2.2 Contingent and effective upon the Closing, Section 1.5 of the
Plan shall be amended entirety to read as follows: "1.5 Company means Symbios,
Inc., and any successor thereto."
3. Termination of Certain Group Severance Benefits and Group Salary
Continuation Arrangements and Cessation of Grants Under the Stock Plans.
3.1 Any and all group severance benefits or group salary
continuation arrangements maintained by the Company shall be terminated as of
but subject to the Closing.
3.2 No grants under the Symbios 1995 Stock Plan and the 1995
Director Restricted Stock Plan (collectively the "Stock Plans") shall be made at
or after the Closing.
3.3 Subject to the provisions of Section 7.1 of the Purchase
Agreement concerning the assumption by LSI of the Assumed Options, shares of
Company capital stock reserved for issuance under the Stock Plans as of the
Closing, to the extent not covered by outstanding awards under the Stock Plans,
shall no longer be reserved for issuance. All awards outstanding under any of
the Stock Plans as of Closing shall remain in full force and effect.
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<PAGE> 3
4. Creation of Subsidiaries and Sale and Transfer of Assets.
4.1 Immediately prior, but subject to, the Closing, the Company
shall form a subsidiary in the Cayman Islands to be called Symbios
International, Ltd. ("Symbios International").
4.2 Immediately prior, but subject to, the Closing, the Company
shall form a subsidiary in Delaware to be called SymSub, Inc. ("SymSub").
4.3 Subject to and upon the occurrence of the Closing, the Company
shall enter into a License Agreement in the form attached as Exhibit A with
Symbios International.
4.4 Subject to and upon the occurrence of the Closing, the Company
shall enter into an Assignment and License Agreement (the "SymSub License
Agreement") with SymSub in the form attached hereto as Exhibit B.
4.5 Subject to and upon the occurrence of the Closing, the Company
shall transfer to SymSub all Storage Tangible Assets (as described in the SymSub
License Agreement) pursuant to a Bill of Sale.
5. Fully Diluted Per Share Purchase Price. The parties hereto all agree
that the Fully Diluted Per-Share Purchase Price, for all purposes under the
Purchase Agreement, shall be $20.15.
6. Additional Agreements. Subject to and upon the occurrence of the
Closing, the parties shall enter in the following additional agreements in
mutually agreeable form: The Indemnity Agreement; the Assignment and Assumption
of Employment Agreements; the Supplementary Liability Agreement; and the side
letter with respect to the Supplementary Liability Agreement.
7. Purchase of Christ Note. The parties agree that, effective
immediately after the Closing, HEA shall purchase from the Company that certain
promissory note payable by Mr. Charles F. Christ to the Company, for a cash
price equal to the amount due and payable under such note as of such date which
Seller represents to be $247,917.
8. Grant of Stock Options. HEA represents that since June 28, 1998, the
Company has only granted options to purchase one hundred ninety-seven thousand
five hundred eighty-nine shares of its Common Stock to employees hired or
promoted since November 11, 1997. LSI hereby consents to the issuance of such
options to the extent such consent may be required under the Purchase Agreement.
After giving effect to the aforesaid options, the only outstanding capital stock
of the Company consists of the capital stock of the Company being purchased by
the Buyer in this transaction and options to purchase 2,082,017 shares of the
capital stock of the Company held by employees and consultants, which options
shall be the only Assumed Options of LSI for the purposes of Section 7.1 of the
Purchase Agreement.
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<PAGE> 4
9. Purchase Price.
9.1 Clause (d) of Section 2.4 is hereby amended to read in its
entirety as follows:
"Purchaser shall pay to Seller an amount in immediately available
funds which is sufficient, together with the Upstream Bridge Loan
repayment and the amount of cash on hand on the books of the Company
immediately prior to the Closing, to permit repayment of the Bridge
Loan in full (the "Payment Amount"), provided that if the Payment
Amount exceeds Forty-Four Million Dollars ($44,000,000), the
Purchase Price (and as a result, the cash amount payable to Seller)
shall be reduced by an amount equal to the amount by which the
Payment Amount exceeds $44,000,000 (the "Excess Payment")"
9.2 Clause (e) of Section 2.4 is hereby amended to read in its
entirety as follows:
"the Indebtedness then owing to the lender(s) under the Bridge Loan
shall be repaid"
9.3 There shall be added to the end of Section 2.4 the following
sentence:
"The Payment Amount shall be treated as consideration for the Shares
for all tax and other reporting purposes."
10. Closing Balance Sheet. For purposes of calculating the Closing
Balance Sheet, the Closing Date shall be August 6, 1998 and the Closing Balance
Sheet shall be calculated as of the end of such date.
11. Fleet UCCs. HEA shall use all reasonable efforts to eliminate any
claim of lien by Fleet National Bank upon the assets of Symbios existing as of
the Closing and shall pay any sums necessary to discharge any such liens within
twenty (20) days following written demand by the Company.
12. Lehman Fees and Charges. HEA is hereby released from its obligation
under Section 2.4(c) of the Purchase Agreement to reimburse Symbios for the fee
charged by Lehman Brothers on the unused amount of the revolver, in the
approximate amount of $29,027.78. Any other fees, costs and expenses of the
Lehman Bridge Loan not reflected on the 5/24/98 financial statements as a
Symbios expense, whether incurred or paid prior to or after 5/24/98 shall be
paid by the HEA. In this regard, LSI acknowledges that HEA has paid $68,999.03
of such amount as set forth in the final close of funds statement.
13. Payments By and To the Company under the Terminated Affiliate
Contract. Notwithstanding the covenants in Section 5.7 of the Purchase Agreement
to the contrary, the
- 4 -
<PAGE> 5
parties agree that the amounts owing under the contracts between the Company and
Affiliates of the Company and HEI an HEA, other than the Company's Subsidiaries
have not been paid prior to or at the Closing. The parties further agree,
however, that any sums owing to or by the Company under such contracts shall be
included on the Final Balance Sheet, such that any difference shall adjust the
sums owing as a purchase price adjustment pursuant to Section 2.3 of the
Purchase Agreement.
14. Additional Representations and Warranties. The representations and
covenants of HEA and LSI set forth herein are in addition to the representations
and covenants of HEA and LSI in the Purchase Agreement, but shall nevertheless
be subject to the indemnification, defense and hold harmless provisions of
Section 9.2 and 9.4 respectively of the Purchase Agreement and the provisions
for implementation thereof set forth in Sections 9.6 and 9.7 of the Purchase
Agreement, but, only with respect to the items listed in Section 11 of this
Agreement, without application of the limitations as described in Section 9.3 of
the Purchase Agreement.
15. No Effect on Purchase Price. The parties agree that all activities
set forth herein or reasonably necessary or advisable to implement any of the
items described herein have been taken with the consent and approval of all
other parties, and that nothing set forth herein shall result in any adverse
effect on the Purchase Price, or result in any adjustment to the Purchase Price
pursuant to any term or provision of the Purchase Agreement. Should any actions
taken to implement any item described in this Agreement result in an adjustment
to the Closing Balance Sheet such that HEA would be required to pay to LSI any
amount pursuant to Section 2.3(c)(i) of the Purchase Agreement, the Closing
Balance Sheet shall be adjusted and redetermined by removing completely the
effect of such actions from the Closing Balance Sheet.
16. Effect of Amendment; Entire Agreement. Except as expressly amended
hereby, all terms and conditions of the Purchase Agreement shall remain in full
force and effect without modification. Subject to the preceding sentence, the
Purchase Agreement as amended by this Agreement, and the Amended and Restated
Termination and License Agreement dated as of the date hereof by and among the
Company, HEA, HEI and LSI; the Stock Option Cancellation Agreements dated as of
the date hereof by and among the Company, HEA and each of Chang See Chung,
Charles F. Christ, Philip S. Paul, H. Gene Patterson, Dr. Chong Sup Park, Kyu
Chung Cho, Mong Hun Chung, Thomas J. Connors and Young Hwan Kim, respectively;
the Termination Agreement dated as of the date hereof by and among HEI, HEA and
the Company; the Assignment and Assumption of Employment Contracts dated as of
the date hereof by and among the Company, LSI and HEA; the General Release dated
as of the date hereof by HEA and HEI in favor of the Company; the Supplementary
Liability Agreement; the side letter with respect to the Supplementary Liability
Agreement; and the Indemnity Agreement dated as of the date hereof by and among
the HEA, HEI and LSI supersede all prior discussions and agreements among the
parties with respect to the subject matter hereof and thereof, and contain the
sole and entire agreement between the parties hereto with respect to the subject
matter hereof and thereof.
- 5 -
<PAGE> 6
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officer of each party hereto as of the date first above
written.
LSI LOGIC CORPORATION
By: /s/ R. DOUGLAS NORBY
--------------------------------------
Name: R. Douglas Norby
Title: Executive Vice President
HYUNDAI ELECTRONICS AMERICA
By: /s/ DR. C. S. PARK
--------------------------------------
Name: Dr. C. S. Park
Title: President
HYUNDAI ELECTRONICS INDUSTRIES CO., LTD.
By: /s/ DR. C. S. PARK
--------------------------------------
Name: Dr. C. S. Park
Title: Executive Vice President
- 6 -
<PAGE> 1
EXHIBIT 10.42
================================================================================
CREDIT AGREEMENT
among
LSI LOGIC CORPORATION
and
LSI LOGIC JAPAN SEMICONDUCTOR, INC.
and
THE LENDERS NAMED HEREIN
and
ABN AMRO BANK N.V.,
as Agent for Lenders
August 5, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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SECTION I. INTERPRETATION............................................................1
1.01. Definitions..................................................................1
1.02. GAAP........................................................................23
1.03. Headings....................................................................23
1.04. Plural Terms................................................................23
1.05. Governing Law...............................................................23
1.06. English Language............................................................23
1.07. Construction................................................................23
1.08. Entire Agreement............................................................23
1.09. Calculation of Interest and Fees............................................24
1.10. References..................................................................24
1.11. Other Interpretive Provisions...............................................24
SECTION II. CREDIT FACILITIES........................................................25
2.01. U.S. Borrowings.............................................................25
2.02. Japanese Borrowings.........................................................29
2.03. Amount Limitations, Commitment Reductions, Etc..............................31
2.04. Fees........................................................................33
2.05. Prepayments.................................................................34
2.06. Other Payment Terms.........................................................35
2.07. Loan Accounts; Notes........................................................37
2.08. Loan Funding................................................................38
2.09. Pro Rata Treatment..........................................................39
2.10. Change of Circumstances.....................................................40
2.11. Taxes on Payments...........................................................43
2.12. Funding Loss Indemnification................................................44
2.13. Security....................................................................45
2.14. Replacement of Lenders......................................................45
</TABLE>
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TABLE OF CONTENTS
(continued)
<TABLE>
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<S> <C> <C>
SECTION III. CONDITIONS...............................................................46
3.01. Initial Closing Date Conditions.............................................46
3.02. Second Closing Date Conditions Precedent....................................46
3.03. Conditions Precedent to Each Credit Event...................................46
3.04. Covenant to Deliver.........................................................47
SECTION IV. REPRESENTATIONS AND WARRANTIES...........................................47
4.01. Borrowers' Representations and Warranties...................................47
4.02. Reaffirmation...............................................................52
SECTION V. COVENANTS................................................................52
5.01. Affirmative Covenants.......................................................52
5.02. Negative Covenants..........................................................57
5.03. Financial Covenants.........................................................61
SECTION VI. DEFAULT..................................................................63
6.01. Events of Default...........................................................63
6.02. Remedies....................................................................65
6.03. Lender Rate Contract Remedies...............................................66
SECTION VII. THE AGENT AND RELATIONS AMONG LENDERS....................................67
7.01. Appointment, Powers and Immunities..........................................67
7.02. Reliance by Agent...........................................................67
7.03. Defaults....................................................................67
7.04. Indemnification.............................................................68
7.05. Non-Reliance................................................................68
7.06. Resignation or Removal of Agent.............................................68
7.07. Agent in its Individual Capacity............................................69
SECTION VIII. MISCELLANEOUS............................................................69
8.01. Notices.....................................................................69
8.02. Expenses....................................................................71
8.03. Indemnification.............................................................71
8.04. Waivers; Amendments.........................................................71
</TABLE>
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TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
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<S> <C> <C>
8.05. Successors and Assigns......................................................73
8.06. Setoff; Security Interest...................................................77
8.07. No Third Party Rights.......................................................77
8.08. Partial Invalidity..........................................................77
8.09. Jury Trial..................................................................77
8.10. Counterparts................................................................77
8.11. Borrowers' Liabilities......................................................78
8.12. Confidentiality.............................................................78
8.13. Consent to Jurisdiction.....................................................78
SCHEDULES
I Lenders
II Pricing Grid
3.01 Initial Closing Date Conditions Precedent
4.01(d) Governmental Consents
4.01(g) Litigation
4.01(i) Environmental Compliance
4.01(l) Significant Subsidiaries
5.02(a) Liens
EXHIBITS
A Notice of U.S. Borrowing (2.01(c))
B Notice of U.S. Borrowing Conversion (2.01(e))
C Notice of U.S. Borrowing Interest Period Selection (2.01(f))
D Notice of Japanese Borrowing (2.02(b))
E Notice of Japanese Borrowing Interest Period Selection (2.02(d))
F Note (2.07(b))
G LSI Guaranty (2.13(a))
H Assignment Agreement (8.05(c))
I Form of Opinion of Wilson, Sonsini, Goodrich & Rosati
J Form of Opinion of Japanese Counsel for LLJS
</TABLE>
iii
<PAGE> 5
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of August 5, 1998, is entered into by
and among:
(1) LSI LOGIC CORPORATION, a Delaware corporation ("LSI");
(2) LSI LOGIC JAPAN SEMICONDUCTOR, INC., a Japanese corporation
("LLJS");
(3) Each of the financial institutions from time to time listed
in Schedule I hereto, as amended from time to time (such financial
institutions to be referred to herein collectively as "Lenders"); and
(4) ABN AMRO BANK N.V., as agent for Lenders (in such capacity,
"Agent").
RECITALS
A. LSI and LLJS (collectively, "Borrowers"), severally, but not jointly,
have requested Lenders to provide certain credit facilities to each of them.
B. Lenders are willing to provide such credit facilities upon the terms
and subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION I. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Credit Document, each term set forth below, when used in this Agreement or
any other Credit Document, shall have the respective meaning given to that term
below or in the provision of this Agreement or other document, instrument or
agreement referenced below.
"ABN AMRO" shall mean ABN AMRO Bank N.V.
"Acquisition" shall mean any transaction or series of related
transactions for the purpose of or resulting in (a) the acquisition,
directly or indirectly, of all or substantially all of the assets of a
Person or of any business or division of a Person, (b) the acquisition,
directly or indirectly, of all or substantially all of the capital
stock, obligations or other
<PAGE> 6
securities of or interest in a Person, or (c) a merger or consolidation
or any other combination by either Borrower or any of its Subsidiaries
with another Person.
"Affiliate" shall mean any Person which, directly or indirectly,
controls, is controlled by or is under common control with another
Person. For purposes of the foregoing, "control" with respect to any
Person shall mean the possession, directly or indirectly, of the power
(a) to vote twenty-five percent (25%) or more of the securities having
ordinary voting power for the election of directors of such Person, or
(b) to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by
contract or otherwise.
"Agent" shall have the meaning given to that term in clause (4)
of the introductory paragraph hereof.
"Agent's Fee Letter" shall mean the letter agreement dated as of
July 17, 1998 between LSI and Agent.
"Agent's Syndication Letter" shall mean the letter agreement
dated as of August 5, 1998 between LSI and Agent.
"Agreement" shall mean this Credit Agreement.
"Applicable Lending Office" shall mean:
(a) With respect to any U.S. Lender and any U.S.
Borrowing, (i) in the case of any Base Rate Loan, such Lender's
Domestic Lending Office, and (ii) in the case of any LIBOR Loan,
such Lender's Euro-Dollar Lending Office; and
(b) With respect to any Japanese Lender and any Japanese
Borrowing, such Lender's Japanese Lending Office.
"Applicable Margin" shall mean, with respect to any Borrowing at
any time, the per annum margin which is determined pursuant to the
Pricing Grid and added to the Base Rate, LIBO Rate or TIBO Rate, as the
case may be, for such Borrowing; provided, however, that each Applicable
Margin determined pursuant to the Pricing Grid shall be increased by two
percent (2.00%) per annum on the date an Event of Default occurs and
shall continue at such increased rate unless and until such Event of
Default is cured or waived in accordance with this Agreement. The
Applicable Margins shall be determined as provided in the Pricing Grid
and may change for each Pricing Period.
"Assignee Lender" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Assignment" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Assignment Agreement" shall have the meaning given to that term
in Subparagraph 8.05(c).
2
<PAGE> 7
"Assignment Effective Date" shall have, with respect to each
Assignment Agreement, the meaning set forth therein.
"Assignor Lender" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy."
"Base Rate" shall mean, on any day, the greater of (a) the Prime
Rate in effect on such date and (b) the Federal Funds Rate for such day
plus one-half percent (0.50%).
"Base Rate Loan" shall mean, at any time, a U.S. Loan which then
bears interest at a rate specified in clause (i) of Subparagraph
2.01(d).
"Borrowers" shall have the meaning given to that term in Recital
A.
"Borrowing" shall mean a U.S. Borrowing or a Japanese Borrowing.
"Business Day" shall mean any day on which commercial banks are
not authorized or required to close in San Francisco, California, or New
York, New York and (a) if such Business Day is related to a LIBOR Loan,
dealings in Dollar deposits are carried out in the London interbank
market and commercial banks are open for business in London or (b) if
such Business Day is related to a Japanese Borrowing, dealings in Yen
deposits are carried out in the Tokyo interbank market and commercial
banks are open for business in Tokyo.
"Capital Adequacy Requirement" shall have the meaning given to
that term in Subparagraph 2.10(d).
"Capitalized Interest" shall mean interest that is incurred or
accrued in any period and added to the cost of the asset in connection
with which such interest is incurred.
"Capital Lease" shall mean, for any Person, any lease of property
(whether real, personal or mixed) which, in accordance with GAAP, would,
at the time a determination is made, be required to be recorded as a
capital lease in respect of which such Person is liable as lessee.
3
<PAGE> 8
"Change of Control" shall mean
(a) With respect to LSI, (i) the acquisition after the
date hereof by any person or group of persons (within the meaning
of Section 13 or 14 of the Securities Exchange Act of 1934 (as
amended, the "Exchange Act")) of (A) beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the SEC under the
Exchange Act) of thirty percent (30%) or more of the outstanding
equity securities of LSI entitled to vote for members of the
Board of Directors of LSI, or (B) all or substantially all of the
assets of LSI; or (ii) during any period of twelve (12)
consecutive calendar months, individuals who are directors of LSI
on the first day of such period ("Initial Directors") and any
directors of LSI who are specifically approved by two-thirds of
the Initial Directors and previously-approved Directors shall
cease to constitute a majority of the Board of Directors of LSI
before the end of such period; or
(b) With respect to LLJS, LSI shall cease to own directly
or indirectly one hundred percent (100%) of the equity securities
of LLJS, except for any nominal amount of director stock
necessary to do business in Japan.
"Change of Law" shall have the meaning given to that term in
Subparagraph 2.10(b).
"Closing Date" shall mean the U.S. Closing Date or the Japanese
Closing Date.
"Commitment Fees" shall mean, collectively, the U.S. Revolving
Commitment Fees, the U.S. 364 Day Commitment Fees and the Japanese
Commitment Fees.
"Commitments" shall mean, collectively, the U.S. Revolving
Commitments, the U.S. 364 Day Commitments and the Japanese Commitments.
"Compliance Certificate" shall have the meaning given to that
term in Subparagraph 5.01(a).
"Consolidated CMLTD" shall mean, as of any date of determination,
the portion of long-term indebtedness coming due in the current quarter
and the next succeeding three-quarter period as determined in accordance
with GAAP.
"Consolidated Current Liabilities" shall mean, as of any date of
determination, the sum of current liabilities of LSI and its
Subsidiaries on a consolidated basis, as determined in accordance with
GAAP, plus (without duplication) Guaranty Obligations with respect to
that portion of the underlying obligations which come due within one
year of such date of determination.
"Consolidated EBITDA" shall mean, for any period, Consolidated
Net Income plus Consolidated Interest Expense plus income tax expense
plus depreciation expense, amortization expense and other non-recurring,
non-cash expenses or charges relating to the Symbios Acquisition taken
between the date of this Agreement and September 30,
4
<PAGE> 9
1998 which were deducted in determining Consolidated Net Income, of LSI
and its Subsidiaries on a consolidated basis, as determined in
accordance with GAAP. For purposes of this calculation, Symbios shall
be deemed to be a Subsidiary of LSI for any period prior to the Symbios
Acquisition.
"Consolidated Interest Expense" shall mean, for any period,
interest expense (including interest expense attributable to Capital
Leases) of LSI and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, the net
income of LSI and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period, as determined in accordance
with GAAP.
"Consolidated Quick Assets" shall mean, as of any date of
determination, the sum of all unencumbered and unrestricted (except
those encumbered or restricted in favor of Agent or Lenders as security
for the Obligations) cash, cash equivalents and net accounts receivable
classified as current assets according to GAAP, of LSI and its
Subsidiaries on a consolidated basis, as determined in accordance with
GAAP.
"Consolidated Tangible Net Worth" shall mean, as of any date of
determination, Consolidated Total Assets minus Consolidated Total
Liabilities, minus (a) all assets which would be classified in a
separate account as intangible assets in accordance with GAAP, including
goodwill, organizational expense, research and development expense,
capitalized software, patent applications, patents, trademarks, trade
names, brands, copyrights, trade secrets, customer lists, licenses,
franchises and covenants not to compete, (b) all unamortized debt
discount and expense and (c) all treasury stock; provided, however, that
to the extent otherwise included in the amount set forth in the
foregoing clause (a) of this definition, there shall be excluded from
such amount the sum of (i) all engineering costs incurred in connection
with the development of major production capabilities at new
manufacturing facilities or refurbishment of an existing facility or
with respect to introducing a new manufacturing process to existing or
new manufacturing facilities and which are classified as a fixed asset
and capitalized on the consolidated balance sheet of LSI in accordance
with GAAP and (ii) amounts representing the capitalized portion of the
acquisition and development costs of software necessary for the
operation of the business of LSI and its Subsidiaries, as shown on the
consolidated balance sheet of LSI.
"Consolidated Total Assets" shall mean, as of any date of
determination, the total assets of LSI and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"Consolidated Total Debt" shall mean, as of any date of
determination, all Indebtedness of LSI and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
5
<PAGE> 10
"Consolidated Total Liabilities" shall mean, as of any date of
determination, the total liabilities of LSI and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"Contractual Obligation" of any Person shall mean, any indenture,
note, lease, loan agreement, security, deed of trust, mortgage, security
agreement, guaranty, instrument, contract, agreement or other form of
contractual obligation or undertaking to which such Person is a party or
by which such Person or any of its property is bound.
"Credit Documents" shall mean and include this Agreement, the
Notes, the LSI Guaranty, the Lender Rate Contracts, the Agent's Fee
Letter and the Agent's Syndication Letter; all other documents,
instruments and agreements delivered to Agent or any Lender pursuant to
Section III; and all other documents, instruments and agreements
delivered to Agent or any Lender in connection with this Agreement on or
after the date of this Agreement.
"Credit Event" shall mean the making of any Loan; the conversion
of any U.S. Loan into a LIBOR Loan; the selection of a new Interest
Period for a LIBOR Loan; or the selection of a new Interest Period
exceeding one (1) month for a Japanese Borrowing.
"Default" shall mean an Event of Default or any event or
circumstance not yet constituting an Event of Default which, with the
giving of any notice or the lapse of any period of time or both, would
become an Event of Default.
"Defaulting Lender" shall mean a Lender which has failed to fund
its portion of any Borrowing which it is required to fund under this
Agreement and has continued in such failure for three (3) Business Days
after written notice from Agent.
"Dollar Equivalent" shall mean, as to any amount denominated in
Yen as of any date of determination, the equivalent amount in Dollars as
determined by Agent on the basis of the Telegraphic Transfer Mid Rate
quoted by Bank of Tokyo Mitsubishi at or about 10:00 a.m. (Tokyo time)
on such date.
"Dollars" and "$" shall mean the lawful currency of the United
States of America and, in relation to any payment under this Agreement,
same day or immediately available funds.
"Domestic Lending Office" shall mean, with respect to any U.S.
Lender and any U.S. Borrowing, (a) initially, its office designated as
such in Part B of Schedule I (or, in the case of any U.S. Lender which
becomes a U.S. Lender by an assignment pursuant to Subparagraph 8.05(c),
its office designated as such in the applicable Assignment Agreement)
and (b) subsequently, such other office or offices as such U.S. Lender
may designate to Agent as the office at which such Lender's Base Rate
Loans will thereafter be maintained and for the account of which all
payments of principal of, and interest on, such Lender's Base Rate Loans
will thereafter be made.
"Eligible Assignee" shall mean a commercial bank having a
combined capital and surplus of at least $100,000,000 that is acting
through a branch or agency located in
6
<PAGE> 11
(a) the United States, in the case of a potential Assignee Lender that
is to become a U.S. Lender or (b) Japan, in the case of a potential
Assignee Lender that is to become a Japanese Lender.
"Environmental Laws" shall mean all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directives, requests, licenses,
authorizations and permits of, and agreements with (including consent
decrees), any Governmental Authorities, in each case relating to or
imposing liability or standards of conduct concerning public health,
safety and environmental protection matters, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Clean Air Act, the Federal Water Pollution Control Act of 1972, the
Solid Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, the Toxic Substances Control Act, the Emergency Planning and
Community Right-to-Know Act, the California Hazardous Waste Control Law,
the California Solid Waste Management, Resource Recovery and Recycling
Act, the California Water Code and the California Health and Safety
Code.
"Equity Capital" shall mean, as of any date of determination,
Consolidated Total Assets minus Consolidated Total Liabilities
(exclusive of the cumulative translation adjustment account as reported
in the consolidated balance sheet of LSI and its Subsidiaries as of such
date).
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) which is under common control with LSI within the
meaning of Section 4001(a)(14) of ERISA and Sections 414(b), (c) and (m)
of the IRC.
"ERISA Event" shall mean (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by LSI or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations which is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) the filing of a notice of
intent to terminate, the treatment of a plan amendment as a termination
under Section 4041 or 4041A of ERISA or the commencement of proceedings
by the PBGC to terminate a Pension Plan subject to Title IV of ERISA;
(d) a failure by LSI or any ERISA Affiliate to make required
contributions to a Pension Plan or other Plan subject to Section 412 of
the IRC; (e) an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Pension Plan; (f) the
imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon LSI or
any ERISA Affiliate; or (g) an application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the IRC
with respect to any Pension Plan.
"Euro-Dollar Lending Office" shall mean, with respect to any U.S.
Lender and any U.S. Borrowing, (a) initially, such Lender's office
designated as such in Part B of Schedule I (or, in the case of any U.S.
Lender which becomes a U.S. Lender by an assignment pursuant to
Subparagraph 8.05(c), its office designated as such in the
7
<PAGE> 12
applicable Assignment Agreement) and (b) subsequently, such other office
or offices as such Lender may designate to Agent as the office at which
such Lender's LIBOR Loans will thereafter be maintained and for the
account of which all payments of principal of, and interest on, such
Lender's LIBOR Loans will thereafter be made.
"Event of Default" shall have the meaning given to that term in
Paragraph 6.01.
"Federal Funds Rate" shall mean, for any day, the rate per annum
set forth in the weekly statistical release designated as H.15 (519), or
any successor publication, published by the FRB (including any such
successor publication, "H.15 (519)") for such day opposite the caption
"Federal Funds (Effective)". If on any relevant day, such rate is not
yet published in H.15 (519), the rate for such day shall be the rate set
forth in the daily statistical release designated as the Composite 3:30
p.m. Quotations for U.S. Government Securities, or any successor
publication, published by the Federal Reserve Bank of New York
(including any such successor publication, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective
Rate". If on any relevant day, such rate is not yet published in either
H.15 (519) or the Composite 3:30 p.m. Quotations, the rate for such day
shall be the arithmetic means, as determined by Agent, of the rates
quoted to Agent for such day by three (3) federal funds brokers of
recognized standing selected by Agent for overnight federal funds
transactions.
"Financial Statements" shall mean, with respect to any accounting
period for any Person, statements of income, shareholders' equity and
cash flows of such Person for such period, and a balance sheet of such
Person as of the end of such period, setting forth in each case in
comparative form figures for the corresponding period in the preceding
fiscal year if such period is less than a full fiscal year or, if such
period is a full fiscal year, corresponding figures from the preceding
annual audit, all prepared in reasonable detail and in accordance with
GAAP.
"Foreign Plan" shall mean any employee benefit plan maintained by
LSI, LLJS or any of their Subsidiaries which is mandated or governed by
any Governmental Rule of any Governmental Authority other than the
United States.
"FRB" shall mean the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"GAAP" shall mean generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting profession),
which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" shall mean any domestic or foreign
national, state or local government, any political subdivision thereof,
any department, agency, authority or bureau of any of the foregoing, or
any other entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, including,
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<PAGE> 13
without limitation, the Federal Deposit Insurance Corporation, the FRB,
the Comptroller of the Currency, any central bank or any comparable
authority.
"Governmental Charges" shall mean, with respect to any Person,
all levies, assessments, fees, claims or other charges imposed by any
Governmental Authority upon such Person or any of its property or
otherwise payable by such Person.
"Governmental Rule" shall mean any law, rule, regulation,
ordinance, order, code interpretation, judgment, decree, directive,
guidelines, policy or similar form of decision of any Governmental
Authority.
"Guaranty Obligation" shall mean, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person:
(a) With respect to any Indebtedness, lease (other than an
operating lease), dividend, or other obligation (the "primary
obligations") of another Person (the "primary obligor"),
including any obligation of that Person (i) to purchase,
repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, or
(ii) to advance or provide funds (A) for the payment or discharge
of any such primary obligation, or (B) 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
(iii) 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 (iv) otherwise to assure or hold harmless
the holder of any such primary obligation against loss in respect
thereof;
(b) (i) With respect to letters of credit, acceptances,
bank guaranties, surety bonds or similar instruments issued for
the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings, or (ii) as a
partner or joint venturer in any partnership or joint venture;
(c) With respect to synthetic leases; or
(d) Net obligations with respect to Rate Contracts, other
than Rate Contracts entered into in connection with a bona fide
hedging operation that provides offsetting benefits to such
Person.
"Hazardous Substances" shall mean any toxic or hazardous
substances, materials, wastes, contaminants or pollutants, including
asbestos, PCBs, petroleum products and byproducts, and any substances
defined or listed as "hazardous substances," "hazardous materials,"
"hazardous wastes" or "toxic substances" (or similarly identified),
regulated under or forming the basis for liability under any applicable
Environmental Law.
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"Indebtedness" shall mean, for any Person, without duplication:
(a) All indebtedness or other obligations of such Person
for borrowed money;
(b) All obligations of such Person for the deferred
purchase price of property or services (including obligations
under credit facilities which secure or finance such purchase
price and obligations under "synthetic" leases), other than trade
payables incurred by such Person in the ordinary course of its
business on ordinary terms;
(c) All obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets
or businesses;
(d) All indebtedness created or arising under any
conditional sale or other title retention agreement with respect
to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such
property);
(e) All obligations under Capital Leases;
(f) All Guaranty Obligations other than Guaranty
Obligations described in clauses (a)(iii) and (a)(iv) of the
definition of "Guaranty Obligation" where the primary obligor is
a Subsidiary; and
(g) All indebtedness of another Person secured by any Lien
upon or in property owned by the Person for whom Indebtedness is
being determined, whether or not such Person has assumed or
become liable for the payment of such indebtedness of such other
Person; provided, that if such indebtedness is not assumed and
recourse is limited solely to such property, the Indebtedness
incurred hereunder shall be valued at the lesser of the principal
amount of the obligation so secured or the fair market value of
the property subject to such Lien.
"Initial Closing Date" shall mean the earlier of the U.S. Closing
Date and the Japanese Closing Date. (If the U.S. Closing Date and the
Japanese Closing Date are the same date, the Initial Closing Date and
the Second Closing Date shall be the same date.)
"Interest Period" shall mean:
(a) With respect to any LIBOR Loan, the time period
selected by LSI pursuant to Subparagraph 2.01(c) or Subparagraph
2.01(e) which commences on the first day of such U.S. Borrowing
or the effective date of any conversion and ends on the last day
of such time period, and thereafter, each subsequent time period
selected by LSI pursuant to Subparagraph 2.01(f) which commences
on the last day of the immediately preceding time period and ends
on the last day of that time period; and
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(b) With respect to a Japanese Borrowing, the time period
selected by LLJS pursuant to Subparagraph 2.02(b) which commences
on the first day of such Japanese Borrowing and ends on the last
day of such time period, and thereafter, each subsequent time
period selected by LLJS pursuant to Subparagraph 2.02(d) which
commences on the last day of the immediately preceding time
period and ends on the last day of that time period.
"IRC" shall mean the Internal Revenue Code of 1986.
"IRS" shall mean the Internal Revenue Service, or any successor
thereto.
"Japanese Borrowing" shall mean a borrowing by LLJS consisting of
Japanese Loans made by the Japanese Lenders on the same date pursuant to
a single Notice of Japanese Borrowing. Any reference to a Japanese
Borrowing shall include the Japanese Loans made pursuant to such
Japanese Borrowing.
"Japanese Closing Date" shall mean the date, not later than
August 31, 1998, designated by LLJS in the initial Notice of Japanese
Borrowing as the date on which the initial Japanese Borrowing is to
occur.
"Japanese Commitment" shall mean, with respect to each Lender,
the Yen Equivalent on the day four (4) Business Days prior to the
Japanese Closing Date of the Dollar amount set forth under the caption
"Japanese Commitment" opposite such Lender's name on Part A of Schedule
I, or, if changed, such Yen amount as may be set forth for such Lender
in the Register.
"Japanese Commitment Fees" shall have the meaning given to that
term in Subparagraph 2.04(b).
"Japanese Lender" shall mean a Lender having a Japanese
Commitment or, if the Japanese Commitments have been terminated, a
Lender having a Japanese Loan.
"Japanese Lending Office" shall mean, with respect to any
Japanese Lender and any Japanese Borrowing, (a) initially, such Lender's
office designated as such in Part B of Schedule I (or, in the case of
any Japanese Lender which becomes a Japanese Lender by an assignment
pursuant to Subparagraph 8.05(c), its office designated as such in the
applicable Assignment Agreement) and (b) subsequently, such other office
or offices as such Lender may designate to Agent as the office at which
such Lender's Japanese Loans will thereafter be maintained and for the
account of which all payments of principal of, and interest on, such
Lender's Japanese Loans will thereafter be made.
"Japanese Loan" shall have the meaning given to that term in
Subparagraph 2.02(a).
"Lender Rate Contract" shall mean any Rate Contract entered into
by either Borrower or any of its Subsidiaries with a Lender or its
Affiliates as permitted by this Agreement of which Agent will be given
written notice upon the occurrence and during the continuance of an
Event of Default.
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"Lenders" shall have the meaning given to that term in clause (3)
of the introductory paragraph hereof.
"LIBO Rate" shall mean, with respect to any Interest Period for
the LIBOR Loans in any U.S. Borrowing, a rate per annum equal to the
quotient (rounded upward if necessary to the nearest 1/100 of one
percent) of (a) the arithmetic mean (rounded upward if necessary to the
nearest 1/16 of one percent) of the rates per annum appearing on
Telerate Page 3750 (or any successor publication) on the second Business
Day prior to the first day of such Interest Period at or about 11:00
A.M. (London time) (for delivery on the first day of such Interest
Period) for a term comparable to such Interest Period, divided by (b)
one minus the Reserve Requirement for such LIBOR Loans in effect from
time to time. If for any reason rates are not available as provided in
clause (a) of the preceding sentence, the rate to be used in clause (a)
shall be, at the Agent's discretion, (i) the rate per annum at which
Dollar deposits are offered to Agent in the London interbank market or
(ii) the rate at which Dollar deposits are offered to Agent in, or by
Agent to major banks in, any offshore interbank market selected by
Agent, in each case on the second Business Day prior to the commencement
of such Interest Period at or about 10:00 A.M. (New York time) (for
delivery on the first day of such Interest Period) for a term comparable
to such Interest Period and in an amount approximately equal to the
amount of the LIBOR Loan to be made or funded by Agent as part of such
U.S. Borrowing. The LIBO Rate shall be adjusted automatically as to all
LIBOR Loans then outstanding as of the effective date of any change in
the Reserve Requirement.
"LIBOR Loan" shall mean, at any time, a U.S. Loan which then
bears interest at a rate specified in clause (ii) of Subparagraph
2.01(d).
"Lien" shall mean any mortgage, deed of trust, pledge, security
interest, assignment, deposit arrangement, charge or encumbrance, lien
(statutory or other), or other preferential arrangement (including any
conditional sale or other title retention agreement, or any financing
lease having substantially the same economic effect as any of the
foregoing or any agreement to give any security interest, but excluding
any operating lease, regardless of whether precautionary filings are
made in respect thereof under Section 9408 of the California Uniform
Commercial Code).
"LLJS" shall have the meaning given to that term in clause (2) of
the introductory paragraph hereof.
"Loan" shall mean a U.S. Revolving Loan, a U.S. 364 Day Loan or a
Japanese Loan.
"Loan Account" shall have the meaning given to that term in
Subparagraph 2.07(a).
"LSI" shall have the meaning given to that term in clause (1) of
the introductory paragraph hereof.
"LSI Guaranty" shall have the meaning given to that term in
Subparagraph 2.13(a).
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"Material Adverse Effect" shall mean (a) a material adverse
change in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of either
Borrower or either Borrower and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of either Borrower to perform its
Obligations or to pay any Indebtedness described in Subparagraph
6.01(e); or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability of any Credit Document.
"Maturity" shall mean, with respect to any Loan, interest, fee or
other amount payable by either Borrower under this Agreement or the
other Credit Documents, the date such Loan, interest, fee or other
amount becomes due, whether upon the stated maturity or due date, upon
acceleration or otherwise.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined
in Sections 3(37) and 4001(a)(3) of ERISA.
"Net Proceeds" shall mean, with respect to any sale of any asset
(including any sale of assets to be leased back in connection with a
"synthetic" lease of such assets) or any sale or issuance of any
Indebtedness or equity securities by any Person, the aggregate
consideration received by such Person from such sale or issuance less
the sum of the actual amount of the reasonable fees and commissions
payable to Persons other than such Person or any Affiliate of such
Person, the reasonable legal expenses and other costs and expenses
directly related to such sale or issuance that are to be paid by such
Person.
"Note" shall have the meaning given to that term in Subparagraph
2.07(b).
"Notice of Borrowing" shall mean a Notice of U.S. Borrowing or a
Notice of Japanese Borrowing.
"Notice of Interest Period Selection" shall mean a Notice of U.S.
Borrowing Interest Period Selection or a Notice of Japanese Borrowing
Interest Period Selection.
"Notice of Japanese Borrowing" shall have the meaning given to
that term in Subparagraph 2.02(b).
"Notice of Japanese Borrowing Interest Period Selection" shall
have the meaning given to that term in Subparagraph 2.02(d).
"Notice of U.S. Borrowing" shall have the meaning given to that
term in Subparagraph 2.01(c).
"Notice of U.S. Borrowing Conversion" shall have the meaning
given to that term in Subparagraph 2.01(e).
"Notice of U.S. Borrowing Interest Period Selection" shall have
the meaning given to that term in Subparagraph 2.01(f).
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"Obligations" shall mean and include all loans, advances, debts,
liabilities, and obligations, howsoever arising, owed by either Borrower
individually to Agent or any Lender of every kind and description
(whether or not evidenced by any note or instrument and whether or not
for the payment of money), direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising pursuant to the
terms of this Agreement or any of the other Credit Documents, including
all interest, fees, charges, expenses, attorneys' fees and accountants'
fees chargeable to Borrowers or payable by Borrowers thereunder.
"Outstanding Japanese Loan Facility" shall mean the Yen credit
facility provided pursuant to the Agreement for yen 25,000,000,000
Floating Rate Guaranteed Credit Facility, dated December 27, 1995, as
amended, among LLJS, as borrower, LSI, as guarantor, the banks and
financial institutions parties thereto, as lenders, ABN AMRO, as agent
for such lenders, and The Industrial Bank of Japan, Limited, as co-agent
for such lenders.
"Outstanding Japanese Lease Facility" shall mean the Yen
"synthetic" lease provided pursuant to the Master Lease Agreement, dated
June 16, 1995, as amended, among LLJS, as lessee, and certain financial
institutions parties thereto, as lessors, including IBJ Leasing Co.,
Ltd., as lead lessor.
"Outstanding U.S. Loan Facility" shall mean the Dollar credit
facility provided pursuant to the Credit Agreement, dated as of December
20, 1996, as amended, among LSI, as borrower, the financial institutions
parties thereto, as lenders, and ABN AMRO, as agent for such lenders.
"Overnight Rate" shall mean, for any amount payable in Yen on any
day, the per annum interest rate at which overnight deposits in Yen in
an amount approximately equal to such amount would be offered for such
day by ABN AMRO's Japanese Lending Office to major banks in the Tokyo
interbank market.
"Participant" shall have the meaning given to that term in
Subparagraph 8.05(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Pension Plan" shall mean any employee pension benefit plan
covered by Title IV of ERISA (other than a Multiemployer Plan) that is
maintained for employees of LSI or any ERISA Affiliate or with regard to
which LSI or an ERISA Affiliate is a contributing sponsor within the
meaning of Section 4001(a)(13) or 4069 of ERISA.
"Permitted Acquisition" shall mean:
(a) The Symbios Acquisition; and
(b) Any Acquisition of any other Person by either Borrower
or any of its Subsidiaries for which (i) the sole consideration
paid by the acquiring Borrower or Subsidiary, as the case may be,
consists of capital stock, or (ii) the total cash consideration
paid by the acquiring Borrower or Subsidiary, as the case
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may be, does not exceed, in the aggregate with all other
Acquisitions and all investments under clause (vi) of
Subparagraph 5.02(e), $300,000,000 during the period from the
date of this Agreement through the Revolving Termination Date and
no Default exists at the time of such Acquisition and no Default
or Material Adverse Effect would occur as a result thereof.
"Permitted Investments" shall mean any investments selected by
LSI in accordance with its Corporate Cash Investment Policy as adopted
by LSI on August 16, 1996 (as the same may be amended from time to time
with the approval of Agent); provided that any investments not meeting
the standards set forth in such Corporate Cash Investment Policy shall
nevertheless be deemed to be "Permitted Investments" if they do not
exceed at any time, in the aggregate, ten percent (10%) of all Permitted
Investments at such time.
"Permitted Liens" shall mean:
(a) Liens which may at any time be granted in favor of
Agent or any Lender to secure the Obligations;
(b) Liens in existence as of the date of this Agreement
listed on Schedule 5.02(a), and any substitutions or renewals
thereof, provided that (i) any substitute or renewal Lien is
limited to the property encumbered by the existing Lien, and (ii)
the principal amount of the obligations secured thereby is not
increased;
(c) Liens for current taxes, assessments or other
Governmental Charges which are not delinquent or remain payable
without any penalty or which are being contested in good faith
via appropriate proceedings, with appropriate reserves
established therefor in accordance with GAAP;
(d) Liens in connection with workers' compensation,
unemployment insurance or other social security obligations;
(e) Mechanics', workers', materialmen's, landlords',
carriers' or other like Liens arising in the ordinary and normal
course of business with respect to obligations which are not past
due or which are being contested in good faith via appropriate
proceedings, with appropriate reserves established therefor in
accordance with GAAP;
(f) Purchase money security interests (including by way of
installment sales and title retention agreements) in personal or
real property hereafter acquired when the security interest is
granted contemporaneously with such acquisition (or within nine
months thereafter), Liens created to secure the cost of
construction or improvement of property and Liens created to
secure Indebtedness incurred to finance such purchase price or
cost (including Liens in favor of the United States or any state
thereof, or any department, agency, instrumentality or political
subdivision thereof, securing any real property or other assets
in connection with the financing of industrial revenue bond
facilities or of any
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equipment or other property designed primarily for the purpose of
air or water pollution control); provided that (i) any such Lien
shall attach only to the property so purchased. constructed or
improved, together with attachments and accessions thereto, and
rents, proceeds, products, substitutions, replacements and
profits thereof and attachments and accessories thereto, and (ii)
the amount of Indebtedness secured by any such Lien shall not
exceed the purchase or construction price of such property plus
transaction costs and financing charges relating to the
acquisition or construction thereof;
(g) Liens arising from attachments or similar proceedings,
pending litigation, judgments or taxes or assessments in any such
event whose validity or amount is being contested in good faith
by appropriate proceedings and for which adequate reserves have
been established and are maintained in accordance with GAAP;
(h) Liens arising in the ordinary course of business or by
operation of law, not securing Indebtedness, but securing such
obligations as (i) judgments or awards, which (A) are covered by
applicable insurance or (B) have been outstanding less than
thirty (30) consecutive days, (ii) interests of landlords or
lessors under leases of real or personal property entered into in
the ordinary course of business arising by contract or operation
of law, (iii) Liens in favor of customs and revenue authorities
which secure payment of customs in connection with the
importation of goods, (iv) Liens which constitute rights of
set-off of a customary nature or bankers' liens on amounts on
deposit, whether arising by contract or by operation of law, in
connection with arrangements entered into with depository
institutions in the ordinary course of business, (v) such minor
defects, irregularities, encumbrances, easements, rights of way,
and clouds on title as normally exist with respect to similar
properties which do not, individually or in the aggregate,
materially impair the property affected thereby or the use
thereof and (vi) subleases, licenses, and sublicenses granted to
third parties, the granting of which does not result in a
Material Adverse Effect;
(i) Liens securing reimbursement obligations of either
Borrower or any of its Subsidiaries under documentary letters of
credit; provided that such Liens shall attach only to documents
relating to such letters of credit, goods covered thereby and
products and proceeds thereof;
(j) Liens on insurance policies or the proceeds of
insurance policies incurred solely to secure the financing of
premiums owing with respect thereto;
(k) Liens existing on property (including the proceeds and
accessions thereto) acquired by either Borrower or any of its
Subsidiaries (including Liens on assets of any corporation at the
time it becomes a Subsidiary), but excluding any Liens created in
contemplation of any such acquisition;
(l) Liens encumbering customary initial deposits and
margin deposits, and other Liens that are within the general
parameters customary in the industry
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and incurred in the ordinary course of business in connection
with Rate Contracts or portfolio investments maintained with
financial intermediaries; and
(m) Liens related to a "synthetic" lease financing of
equipment, provided that (i) such Liens cover only the equipment
and related property and (ii) the "principal" amount of such
financing does not exceed $250,000,000.
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, an
unincorporated association, a limited liability company, a joint
venture, a trust or other entity or a Governmental Authority.
"Plan" shall mean an employee benefit plan (as defined in Section
3(3) of ERISA) which LSI or any ERISA Affiliate sponsors or maintains,
or to which LSI or any ERISA Affiliate makes, is making, or is obligated
to make contributions, and includes any Pension Plan.
"Pricing Grid" shall mean Schedule II.
"Pricing Period" shall mean (a) the period commencing on the date
of this Agreement and ending on September 30, 1998, and (b) each
consecutive calendar quarter thereafter which commences on the day
following the last day of the immediately preceding calendar quarter and
ends on the last day of that calendar quarter.
"Pricing Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (a) Senior Debt as of such date to (b) annualized
Consolidated EBITDA for such fiscal quarter and the immediately
preceding fiscal quarter, plus, to the extent deducted in calculating
such Consolidated EBITDA, the sum of (i) preproduction engineering
charges not exceeding $135,000,000 taken by LSI during 1999 as a result
of the Financial Accounting Standards Executive Committee Statement of
Position regarding capitalization of preproduction charges, plus (ii)
the aggregate amount of asset write-downs not exceeding $100,000,000
taken by LSI during the quarter ending September 30, 1998.
"Prime Rate" shall mean the per annum rate publicly announced by
ABN AMRO from time to time at its Chicago office. The Prime Rate is
determined by ABN AMRO from time to time as a means of pricing credit
extensions to some customers and is neither directly tied to any
external rate of interest or index nor necessarily the lowest rate of
interest charged by ABN AMRO at any given time for any particular class
of customers or credit extensions. Any change in the Base Rate resulting
from a change in the Prime Rate shall become effective on the Business
Day on which each change in the Prime Rate occurs.
"Proportionate Share" shall mean:
(a) With respect to any U.S. Lender and its U.S. Revolving
Commitment or U.S. Revolving Loans, if any, the ratio (expressed
as a percentage rounded to the eighth digit to the right of the
decimal point) of (i) such Lender's U.S. Revolving Commitment to
the Total U.S. Revolving Commitment at any time on or prior to
the Revolving Termination Date or (ii) the aggregate principal
amount of such Lender's U.S. Revolving Loans to the aggregate
principal amount of the U.S. Revolving Borrowings outstanding at
any time after the Revolving Termination Date;
(b) With respect to any U.S. Lender and its U.S. 364 Day
Commitment or U.S. 364 Day Loans, if any, the ratio (expressed as
a percentage rounded to the eighth digit to the right of the
decimal point) of (i) such Lender's U.S. 364 Day Commitment to
the Total U.S. 364 Day Commitment at any time on
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or prior to the U.S. 364 Day Termination Date or (ii) the
aggregate principal amount of such Lender's U.S. 364 Day Loans to
the aggregate principal amount of the U.S. 364 Day Borrowings
outstanding at any time after the U.S. 364 Day Termination Date;
(c) With respect to any Japanese Lender and its Japanese
Commitment or Japanese Loans, if any, the ratio (expressed as a
percentage rounded to the eighth digit to the right of the
decimal point) of (i) such Lender's Japanese Commitment to the
Total Japanese Commitment at any time on or prior to the
Revolving Termination Date or (ii) the aggregate principal amount
of such Lender's Japanese Loans to the aggregate principal amount
of the Japanese Borrowings outstanding at any time after the
Revolving Termination Date; and
(d) With respect to any Lender without reference to a
particular type of Commitment or Loan, the ratio (expressed as a
percentage rounded to the eighth digit to the right of the
decimal point) of (i) the aggregate of such Lender's U.S.
Revolving Commitment, U.S. 364 Day Commitment and the Dollar
Equivalent of such Lender's Japanese Commitment to the sum of the
Total U.S. Revolving Commitment, the Total U.S. 364 Day
Commitment and the Dollar Equivalent of the Total Japanese
Commitment at any time on or prior to the Initial Closing Date or
(ii) the weighted average of the sums determined for such Lender
pursuant to clauses (a), (b) and (c) above at any time after the
Initial Closing Date.
"Rate Contracts" shall mean interest rate swaps, caps, floors and
collars, currency swaps, or other similar financial products designed to
provide protection against fluctuations in interest, currency or
exchange rates.
"Register" shall have the meaning given to that term in
Subparagraph 8.05(d).
"Reportable Event" shall mean any of the events set forth in
Section 4043(b) of ERISA or the regulations promulgated thereunder,
other than any such event for which the 30-day notice requirement under
ERISA has been waived in regulations issued by the PBGC.
"Required Lenders" shall mean, at any time, Lenders whose
Proportionate Shares equal or exceed fifty-one percent (51%).
"Reserve Requirement" shall mean (a) with respect to any day in
an Interest Period for a LIBOR Loan, the aggregate of the reserve
requirement rates (expressed as a decimal) in effect on such day for
eurodollar funding (currently referred to as "Eurocurrency liabilities"
in Regulation D of the FRB) maintained by a member bank of the Federal
Reserve System or (b) with respect to any day in an Interest Period for
a Japanese Loan, the aggregate of the reserve requirement rates, if any
(expressed as a decimal), in effect on such day for Yen funding in Tokyo
maintained by commercial banks in Tokyo. As used herein, the term
"reserve requirement" shall include, without limitation, any basic,
supplemental or emergency reserve requirements imposed on any Lender by
any Governmental Authority.
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"Responsible Officer" shall mean, with respect to any Person, the
chief executive officer, the president, the chief financial officer or
the treasurer of such Person, or any other senior officer of such Person
having substantially the same authority and responsibility; or, with
respect to compliance with financial covenants, the chief financial
officer or the treasurer of any such Person, or any other senior officer
of such Person involved principally in the financial administration or
controllership function of such Person and having substantially the same
authority and responsibility.
"Revolving Termination Date" shall mean August 4, 2002, or, with
respect to U.S. Revolving Borrowings or Japanese Borrowings, such
earlier date as the Total U.S. Revolving Commitment or the Total
Japanese Commitment, as the case may be, is cancelled pursuant to
Subparagraph 2.03(c).
"Scheduled Reduction Date" shall mean the last day of each of
December 1999, March, June, September and December 2000, and March, June
and September 2001.
"SEC" shall mean the Securities and Exchange Commission, or any
successor thereto.
"Second Closing Date" shall mean the later of the U.S. Closing
Date and the Japanese Closing Date. (If the U.S. Closing Date and the
Japanese Closing Date are the same date, the Initial Closing Date and
the Second Closing Date shall be the same date.)
"Security Documents" shall mean and include the LSI Guaranty and
any other instruments, agreements, certificates, opinions and documents
(including Uniform Commercial Code financing statements and fixture
filings and landlord waivers) delivered to Agent or any Lender to secure
the Obligations.
"Senior Debt" shall mean all Indebtedness, other than
Subordinated Debt, of LSI and its Subsidiaries on a consolidated basis.
"Significant Subsidiary" shall mean, at any time, any Subsidiary
of LSI having at such time total assets, as of the last day of the
preceding fiscal quarter, having a net book value in excess of
$10,000,000 (exclusive of intercompany assets and liabilities), based
upon LSI's most recent annual or quarterly Financial Statements
delivered to Agent under Subparagraph 5.01(a).
"Solvent" shall mean, with respect to any Person, that as of the
date of determination, (a) the then fair saleable value of the property
of such Person is (ii) greater than the total amount of liabilities
(including reasonably anticipated liabilities with respect to contingent
obligations) of such Person and (ii) greater than the amount that will
be required to pay the probable liabilities on such Person's then
existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
such Person, and (b) such Person has not incurred and does
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not intend to incur, or does not believe that it will incur, debts
beyond its ability to pay such debts as they become due.
"Subordinated Debt" shall mean any Indebtedness of LSI or any of
its Subsidiaries under which principal payments will become due and
payable no earlier than the first anniversary of the Revolving
Termination Date and which is subordinated on terms and conditions
reasonably acceptable to Required Lenders; provided, that any
Subordinated Debt having subordination provisions no more favorable to
the holder than those contained in LSI's 5 1/2% Convertible Subordinated
Notes Due 2001 and the indenture relating thereto shall be deemed to be
reasonably acceptable to the Required Lenders for the purposes hereof.
"Subsidiary" shall mean any corporation, association,
partnership, joint venture or other business entity of which more than
fifty percent (50%) of the voting stock or other equity interest is
owned directly or indirectly by any Person or one or more of the other
Subsidiaries of such Person or a combination thereof. (All references in
this Agreement and the other Credit Documents to Subsidiaries of LSI
shall, unless otherwise indicated, include LLJS and its Subsidiaries.)
"Swap Termination Value" shall mean, in respect of any one or
more Rate Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Rate Contracts, (a) for
any date on or after the date such Rate Contracts have been closed out
and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced
in clause (a) the amount(s) determined as the mark-to-market value(s)
for such Rate Contracts, as determined based upon one or more mid-
market or other readily available quotations provided by any recognized
dealer in such Rate Contracts (which may include any Lender).
"Symbios" shall mean Symbios, Inc., a Delaware corporation.
"Symbios Acquisition" shall mean the acquisition by LSI of the
capital stock of Symbios pursuant to the Symbios Acquisition Documents.
"Symbios Acquisition Documents" shall mean the Stock Purchase
Agreement, dated as of June 28, 1998, by and among LSI, Hyundai
Electronics America, a California corporation, and Hyundai Electronics
Industries Ltd., a legal entity under the laws of the Republic of Korea,
and all material documents, instruments and agreements delivered to or
by LSI in connection with the Symbios Acquisition.
"Taxes" shall have the meaning given to such term in Subparagraph
2.11(a).
"TIBO Rate" shall mean, with respect to any Interest Period for
the Japanese Loans in any Japanese Borrowing, a rate per annum equal to
the quotient (rounded upward if necessary to the nearest 1/100 of one
percent) of (a) the rate per annum appearing on the Reuter Screen TIBM
Page (All Banks Average) (or any successor publication) on the second
Business Day prior to the first day of such Interest Period at or about
11:00 A.M. (Tokyo time) (for delivery on the first day of such Interest
Period) in
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an amount substantially equal to Agent's Japanese Loan for such Japanese
Borrowing and for a term comparable to such Interest Period, divided by
(b) one minus the Reserve Requirement for such Japanese Loan in effect
from time to time. If for any reason rates are not available as provided
in clause (a) of the preceding sentence, the rate to be used in clause
(a) shall be, at Agent's discretion, (i) the rate per annum at which Yen
deposits are offered to Agent in the Tokyo interbank market or (ii) the
rate at which Yen deposits are offered to Agent in, or by Agent to major
banks in, any offshore interbank market selected by Agent, in each case
on the second Business Day prior to the commencement of such Interest
Period at or about 11:00 A.M. (Tokyo time) (for delivery on the first
day of such Interest Period) for a term comparable to such Interest
Period and in an amount approximately equal to the amount of the
Japanese Loan to be made or funded by Agent as part of such Japanese
Borrowing. The TIBO Rate shall be adjusted automatically as to all
Japanese Loans then outstanding as of the effective date of any change
in the Reserve Requirement.
"Total Capital" shall mean the sum of Equity Capital, Senior Debt
and Subordinated Debt.
"Total Japanese Commitment" shall mean an amount not to exceed
the Yen Equivalent of Seventy-Five Million Dollars ($75,000,000), such
Dollar amount to be specified by LLJS in a written notice received by
Agent and the Yen Equivalent of such Dollar amount to be determined by
Agent on the day four (4) Business Days prior to the Japanese Closing
Date, or such amount as reduced pursuant to Subparagraph 2.03(c).
"Total U.S. Revolving Commitment" shall mean Five Hundred
Seventy-Five Million Dollars ($575,000,000), minus the amount of the
Total Japanese Commitment, or such amount as reduced pursuant to
Subparagraph 2.03(b) or Subparagraph 2.03(c).
"Total U.S. 364 Day Commitment" shall mean One Hundred Fifty
Million Dollars ($150,000,000) , or such amount as reduced pursuant to
Subparagraph 2.03(b) or Subparagraph 2.03(c).
"Type" shall mean, with respect to any U.S. Loan or U.S.
Borrowing at any time, the classification of such Loan or Borrowing by
the type of interest rate it then bears, whether an interest rate based
upon the Base Rate or the LIBO Rate.
"Unfunded Pension Liability" shall mean the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current
value of that Plan's assets, determined in accordance with the
assumptions used for funding the Plan pursuant to Section 412 of the IRC
for the applicable plan year.
"United States" and "U.S." each shall mean the United States of
America.
"U.S. Borrowing" shall mean a U.S. Revolving Borrowing or a U.S.
364 Day Borrowing.
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"U.S. Closing Date" shall mean the date, not later than August
31, 1998, designated by LSI in the initial Notice of U.S. Borrowing as
the date on which the initial U.S. Borrowing is to occur.
"U.S. Lender" shall mean a Lender having a U.S. Revolving
Commitment or a U.S. 364 Day Commitment or, after the U.S. 364 Day
Termination Date, a Lender having a U.S. Loan or a U.S. Revolving
Commitment.
"U.S. Loan" shall mean a U.S. Revolving Loan or a U.S. 364 Day
Loan.
"U.S. Revolving Borrowing" shall mean a borrowing by LSI
consisting of U.S. Revolving Loans made by U.S. Lenders on the same date
and of the same Type pursuant to a single Notice of U.S. Borrowing. Any
reference to a U.S. Revolving Borrowing shall include the U.S. Revolving
Loans made pursuant to such U.S. Revolving Borrowing.
"U.S. Revolving Commitment" shall mean, with respect to each
Lender, the Dollar amount set forth under the caption "U.S. Revolving
Commitment" opposite such Lender's name on Part A of Schedule I, or, if
changed, such Dollar amount as may be set forth for such Lender in the
Register.
"U.S. Revolving Commitment Fees" shall have the meaning given to
that term in Subparagraph 2.04(b).
"U.S. Revolving Loan" has the meaning given to that term in
Subparagraph 2.01(a).
"U.S. 364 Day Borrowing" shall mean a borrowing by LSI consisting
of U.S. 364 Day Loans made by U.S. Lenders on the same date and of the
same Type pursuant to a single Notice of U.S. Borrowing. Any reference
to a U.S. 364 Day Borrowing shall include the U.S. 364 Day Loans made
pursuant to such U.S. 364 Day Borrowing.
"U.S. 364 Day Commitment" shall mean, with respect to each
Lender, the Dollar amount set forth under the caption "U.S. 364 Day
Commitment" opposite such Lender's name on Part A of Schedule I, or, if
changed, such Dollar amount as may be set forth for such Lender in the
Register.
"U.S. 364 Day Commitment Fees" shall have the meaning given to
that term in Subparagraph 2.04(b).
"U.S. 364 Day Loan" has the meaning given to that term in
Subparagraph 2.01(b).
"U.S. 364 Day Termination Date" shall mean August 3, 1999, or
such earlier date as the Total U.S. 364 Day Commitment is cancelled
pursuant to Subparagraph 2.03(c).
"Yen" and "(Y)" shall mean the lawful currency of Japan and, in
relation to any payment under this Agreement, same day or immediately
available funds.
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"Yen Equivalent" shall mean, as to any amount denominated in
Dollars as of any date of determination, the equivalent amount in Yen as
determined by Agent on the basis of the Telegraphic Transfer Mid Rate
quoted by Bank of Tokyo Mitsubishi at or about 10:00 a.m. (Tokyo time)
on such date.
1.02. GAAP. Unless otherwise indicated in this Agreement or any other
Credit Document, all accounting terms used in this Agreement or any other Credit
Document shall be construed, and all accounting and financial computations
hereunder or thereunder shall be computed, in accordance with GAAP. If GAAP
changes during the term of this Agreement such that any covenants contained
herein would then be calculated in a different manner or with different
components, Borrowers, Lenders and Agent agree to negotiate in good faith to
amend this Agreement in such respects as are necessary to conform those
covenants as criteria for evaluating Borrowers' financial condition to
substantially the same criteria as were effective prior to such change in GAAP;
provided, however, that, until Borrowers, Lenders and Agent so amend this
Agreement, all such covenants shall be calculated in accordance with GAAP as in
effect immediately prior to such change.
1.03. Headings. Headings in this Agreement and each of the other Credit
Documents are for convenience of reference only and are not part of the
substance hereof or thereof.
1.04. Plural Terms. All terms defined in this Agreement or any other
Credit Document in the singular form shall have comparable meanings when used in
the plural form and vice versa.
1.05. Governing Law. Unless otherwise expressly provided in any Credit
Document, this Agreement and each of the other Credit Documents shall be
governed by and construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
1.06. English Language. This Agreement and the other Credit Documents
are executed and shall be construed in the English language. All instruments,
agreements, certificates, opinions and other documents to be furnished or
communications to be given or made under this Agreement or any other Credit
Document shall be in the English language, except that LLJS may deliver the
Japanese language version of (a) any LLJS corporate document initially prepared
in the ordinary course of its business in the Japanese language or (b) any
certificate or other document prepared by a Japanese Governmental Authority in
the Japanese language, provided that, in each such case, the Japanese language
version of such document is delivered along with an English language translation
thereof which shall be binding upon Borrowers.
1.07. Construction. This Agreement is the result of negotiations among,
and has been reviewed by, Borrowers, each Lender, Agent and their respective
counsel. Accordingly, this Agreement shall be deemed to be the product of all
parties hereto, and no ambiguity shall be construed in favor of or against
either Borrower, any Lender or Agent.
1.08. Entire Agreement. This Agreement and each of the other Credit
Documents, taken together, constitute and contain the entire agreement of
Borrowers, Lenders and Agent and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications among the
parties, whether written or oral, respecting the subject matter hereof
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(excluding the Agent's Fee Letter and the Agent's Syndication Letter but
including the commitment letter dated as of July 17, 1998 between LSI and ABN
AMRO).
1.09. Calculation of Interest and Fees. All calculations of interest and
fees under this Agreement and the other Credit Documents for any period (a)
shall include the first day of such period and exclude the last day of such
period and (b) shall be calculated on the basis of a year of 360 days for actual
days elapsed, except that during any period any Loan bears interest based upon
the Prime Rate, such interest shall be calculated on the basis of a year of 365
or 366 days, as appropriate, for actual days elapsed.
1.10. References.
(a) References in this Agreement to "Recitals," "Sections,"
"Paragraphs," "Subparagraphs," "Exhibits" and "Schedules" are to
recitals, sections, paragraphs, subparagraphs, exhibits and schedules
therein and thereto unless otherwise indicated.
(b) References in this Agreement or any other Credit Document to
any document, instrument or agreement (i) shall include all exhibits,
schedules and other attachments thereto, (ii) shall include all
documents, instruments or agreements issued or executed in replacement
thereof if such replacement is permitted hereby, and (iii) shall mean
such document, instrument or agreement, or replacement or predecessor
thereto, as amended, modified and supplemented from time to time and in
effect at any given time if such amendment, modification or supplement
is permitted hereby.
(c) References in this Agreement or any other Credit Document to
any Governmental Rule (i) shall include any successor Governmental Rule,
(ii) shall include all rules and regulations promulgated under such
Governmental Rule (or any successor Governmental Rule), and (iii) shall
mean such Governmental Rule (or successor Governmental Rule) and such
rules and regulations, as amended, modified, codified or reenacted from
time to time and in effect at any given time.
(d) References in this Agreement or any other Credit Document to
any Person in a particular capacity (i) shall include any permitted
successors to and assigns of such Person in that capacity and (ii) shall
exclude such Person individually or in any other capacity.
1.11. Other Interpretive Provisions. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement or any other
Credit Document shall refer to this Agreement or such other Credit Document, as
the case may be, as a whole and not to any particular provision of this
Agreement or such other Credit Document, as the case may be. The words "include"
and "including" and words of similar import when used in this Agreement or any
other Credit Document shall not be construed to be limiting or exclusive. In the
event of any inconsistency between the terms of this Agreement and the terms of
any other Credit Document, the terms of this Agreement shall govern.
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SECTION II. CREDIT FACILITIES.
2.01. U.S. Borrowings.
(a) U.S. Revolving Borrowing Availability. Subject to the terms
and conditions of this Agreement (including the amount limitations set
forth in Paragraph 2.03), each U.S. Lender with a U.S. Revolving
Commitment severally agrees to advance to LSI from time to time during
the period beginning on the U.S. Closing Date and ending on the
Revolving Termination Date such loans in Dollars as LSI may request
under this Subparagraph 2.01(a) (individually, a "U.S. Revolving Loan");
provided, however, that
(i) the aggregate principal amount of all U.S. Revolving
Loans made by such Lender at any time outstanding shall not
exceed such Lender's U.S. Revolving Commitment at such time; and
(ii) the aggregate principal amount of all U.S. Revolving
Loans made by all Lenders at any time outstanding shall not
exceed the Total U.S. Revolving Commitment at such time.
All U.S. Revolving Loans shall be made on a pro rata basis by all U.S.
Lenders with U.S. Revolving Commitments in accordance with their
respective Proportionate Shares of the Total U.S. Revolving Commitment,
with each U.S. Revolving Borrowing to be comprised of a U.S. Revolving
Loan by each U.S. Lender with a U.S. Revolving Commitment equal to such
Lender's Proportionate Share of such U.S. Revolving Borrowing. Except as
otherwise provided herein, LSI may borrow, repay and reborrow U.S.
Revolving Loans until the Revolving Termination Date.
(b) U.S. 364 Day Borrowing Availability. Subject to the terms and
conditions of this Agreement (including the amount limitations set forth
in Paragraph 2.03), each U.S. Lender with a U.S. 364 Day Commitment
severally agrees to advance to LSI from time to time during the period
beginning on the U.S. Closing Date and ending on the U.S. 364 Day
Termination Date such loans in Dollars as LSI may request under this
Subparagraph 2.01(b) (individually, a "U.S. 364 Day Loan"); provided,
however, that
(i) the aggregate principal amount of all U.S. 364 Day
Loans made by such Lender at any time outstanding shall not
exceed such Lender's U.S. 364 Day Commitment at such time; and
(ii) the aggregate principal amount of all U.S. 364 Day
Loans made by all Lenders at any time outstanding shall not
exceed the Total U.S. 364 Day Commitment at such time.
All U.S. 364 Day Loans shall be made on a pro rata basis by all U.S.
Lenders with U.S. 364 Day Commitments in accordance with their
respective Proportionate Shares of the Total U.S. 364 Day Commitment,
with each U.S. 364 Day Borrowing to be comprised of a U.S. 364 Day Loan
by each U.S. Lender with a U.S. 364 Day Commitment equal to such
Lender's Proportionate Share of such U.S. 364 Day Borrowing. Except as
otherwise
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provided herein, LSI may borrow, repay and reborrow U.S. 364 Day Loans
until the U.S. 364 Day Termination Date.
(c) Notice of Borrowing. LSI shall request each U.S. Borrowing by
delivering to Agent an irrevocable written notice in the form of Exhibit
A, appropriately completed (a "Notice of U.S. Borrowing"), which
specifies, among other things:
(i) Whether the requested U.S. Borrowing is a U.S.
Revolving Borrowing or a U.S. 364 Day Borrowing;
(ii) The principal amount of the requested U.S. Borrowing,
which shall be in the minimum amount of $15,000,000 or an
integral multiple of $5,000,000 in excess thereof;
(iii) Whether the requested U.S. Borrowing is to consist
of Base Rate Loans or LIBOR Loans;
(iv) If the requested U.S. Borrowing is to consist of
LIBOR Loans, the initial Interest Period selected by LSI for such
LIBOR Loans in accordance with Subparagraph 2.01(f); and
(v) The date of the requested U.S. Borrowing, which (A) in
the case of a U.S. Revolving Borrowing, shall be a Business Day
not later than the Revolving Termination Date, and (B) in the
case of a U.S. 364 Day Borrowing, shall be a Business Day not
later than the U.S. 364 Day Termination Date;
Provided, however, that all U.S. Borrowings made during the period
commencing on the date of this Agreement and ending three (3) Business
Days thereafter shall consist solely of Base Rate Loans. LSI shall give
each Notice of U.S. Borrowing to Agent at least three (3) Business Days
before the date of the requested U.S. Borrowing in the case of a U.S.
Borrowing consisting of LIBOR Loans and at least one (1) Business Day
before the date of the requested U.S. Borrowing in the case of a U.S.
Borrowing consisting of Base Rate Loans. Each Notice of U.S. Borrowing
shall be delivered by first-class mail or facsimile to Agent at the
office or facsimile number and during the hours specified in Paragraph
8.01; provided, however, that LSI shall promptly deliver to Agent the
original of any Notice of U.S. Borrowing initially delivered by
facsimile. Agent shall promptly notify each U.S. Lender with a U.S.
Revolving Commitment of each Notice of U.S. Borrowing requesting a U.S.
Revolving Borrowing and of the amount and Type of (and, if applicable,
the Interest Period for) each U.S. Revolving Loan to be made by such
Lender as part of the requested U.S. Revolving Borrowing, and Agent
shall promptly notify each U.S. Lender with a U.S. 364 Day Commitment of
each Notice of U.S. Borrowing requesting a U.S. 364 Day Borrowing and of
the amount and Type of (and, if applicable, the Interest Period for)
each U.S. 364 Day Loan to be made by such Lender as part of the
requested U.S. 364 Day Borrowing.
(d) Interest Rates. LSI shall pay interest on the unpaid
principal amount of each U.S. Loan from the date of such U.S. Loan until
the Maturity thereof, at one of the following rates per annum:
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(i) During such periods as such U.S. Loan is a Base Rate
Loan, at a rate per annum equal to the Base Rate plus the
Applicable Margin therefor, such rate to change from time to time
as the Applicable Margin or Base Rate shall change; and
(ii) During such periods as such U.S. Loan is a LIBOR
Loan, at a rate per annum equal at all times during each Interest
Period for such LIBOR Loan to the LIBO Rate for such Interest
Period plus the Applicable Margin therefor, such rate to change
from time to time as the Applicable Margin shall change.
All U.S. Loans in each U.S. Borrowing shall, at any given time prior to
Maturity, bear interest at one, and only one, of the above rates. The
number of U.S. Borrowings consisting of LIBOR Loans shall not exceed
four (4) at any time.
(e) Conversion of U.S. Loans. LSI may convert any U.S. Borrowing
from one Type of U.S. Borrowing to the other Type; provided, however,
that any conversion of a U.S. Borrowing consisting of LIBOR Loans into a
U.S. Borrowing consisting of Base Rate Loans shall be made on, and only
on, the last day of an Interest Period for such LIBOR Loans. LSI shall
request such a conversion by an irrevocable written notice to Agent in
the form of Exhibit B, appropriately completed (a "Notice of U.S.
Borrowing Conversion"), which specifies, among other things:
(i) The U.S. Borrowing which is to be converted;
(ii) The Type of U.S. Borrowing into which it is to be
converted;
(iii) If any U.S. Borrowing is to be converted into a U.S.
Borrowing consisting of LIBOR Loans, the initial Interest Period
selected by LSI for such LIBOR Loans in accordance with
Subparagraph 2.01(f); provided, that no such conversion shall be
made if a Default has occurred and is continuing; and
(iv) The date of the requested conversion, which shall be
a Business Day.
LSI shall give each Notice of U.S. Borrowing Conversion to Agent at
least three (3) Business Days before the date of the requested
conversion. Each Notice of U.S. Borrowing Conversion shall be delivered
by first-class mail or facsimile to Agent at the office or to the
facsimile number and during the hours specified in Paragraph 8.01;
provided, however, that LSI shall promptly deliver to Agent the original
of any Notice of U.S. Borrowing Conversion initially delivered by
facsimile. Agent shall promptly notify each U.S. Lender with U.S.
Revolving Loans of the contents of each Notice of U.S. Borrowing
Conversion relating to such U.S. Revolving Loans, and Agent shall
promptly notify each U.S. Lender with U.S. 364 Day Loans of the contents
of each Notice of U.S. Borrowing Conversion relating to such U.S. 364
Day Loans.
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(f) LIBOR Loan Interest Periods.
(i) The initial and each subsequent Interest Period
selected by LSI for a U.S. Borrowing consisting of LIBOR Loans
shall be one (1), two (2), three (3) or six (6) months; provided,
however, that (A) any Interest Period which would otherwise end
on a day which is not a Business Day shall be extended to the
next succeeding Business Day unless such next Business Day falls
in another calendar month, in which case such Interest Period
shall end on the immediately preceding Business Day; (B) any
Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar
month; (C) with respect to any U.S. 364 Day Borrowing, no
Interest Period shall end after the U.S. 364 Day Termination
Date; and (D) with respect to any U.S. Revolving Borrowing, no
Interest Period shall end after a Scheduled Reduction Date
unless, after giving effect to such Interest Period, the
aggregate principal amount of all U.S. Revolving Borrowings
consisting of Base Rate Loans and LIBOR Loans having Interest
Periods ending on or prior to such Scheduled Reduction Date
equals or exceeds the amount of the Total U.S. Revolving
Commitment on such Scheduled Reduction Date, and no Interest
Period shall end after the Revolving Termination Date.
(ii) LSI shall notify Agent by an irrevocable written
notice in the form of Exhibit C, appropriately completed (a
"Notice of U.S. Borrowing Interest Period Selection"), at least
three (3) Business Days prior to the last day of each Interest
Period for a U.S. Borrowing consisting of LIBOR Loans of the
Interest Period selected by LSI for the next succeeding Interest
Period for such LIBOR Loans. Each Notice of U.S. Borrowing
Interest Period Selection shall be given to Agent by first-class
mail or facsimile to the office or the facsimile number and
during the hours specified in Paragraph 8.01; provided, however,
that LSI shall promptly deliver to Agent the original of any
Notice of U.S. Borrowing Interest Period Selection initially
delivered by facsimile. If LSI fails to notify Agent of the next
Interest Period for a U.S. Borrowing consisting of LIBOR Loans in
accordance with this Subparagraph 2.01(f), such LIBOR Loans shall
automatically convert to Base Rate Loans on the last day of the
current Interest Period therefor.
(g) Scheduled Payments. Unless earlier repayment is required by
Subparagraph 2.05(c), LSI shall repay the principal amount of the U.S.
Revolving Loans on the Revolving Termination Date. LSI shall repay the
principal amount of the U.S. 364 Day Loans on the U.S. 364 Day
Termination Date. LSI shall pay accrued interest on the unpaid principal
amount of each U.S. Loan in arrears (i) in the case of a Base Rate Loan,
on the last day in each March, June, September and December (commencing
with the first such day after the U.S. Closing Date), (ii) in the case
of a LIBOR Loan, on the last day of each Interest Period (and if any
such Interest Period is equal to or longer than three (3) months, every
three (3) months); and (iii) in the case of all U.S. Loans, upon
prepayment (to the extent thereof) and at Maturity.
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(h) Purpose. LSI shall use the proceeds of the U.S. Borrowings to
consummate the Symbios Acquisition, repay in full all amounts owing
under the Outstanding U.S. Loan Facility and for general corporate
purposes.
2.02. Japanese Borrowings.
(a) Availability. Subject to the terms and conditions of this
Agreement (including the amount limitations set forth in Paragraph
2.03), each Japanese Lender severally agrees to advance to LLJS from
time to time during the period beginning on the Japanese Closing Date
and ending on the Revolving Termination Date such loans in Yen as LLJS
may request under this Paragraph 2.02 (individually, a "Japanese Loan");
provided, however, that
(i) the aggregate principal amount of all Japanese Loans
made by such Lender at any time outstanding shall not exceed such
Lender's Japanese Commitment at such time; and
(ii) the aggregate principal amount of all Japanese Loans
made by all Lenders at any time outstanding shall not exceed the
Total Japanese Commitment at such time.
All Japanese Loans shall be made on a pro rata basis by all Japanese
Lenders in accordance with their respective Proportionate Shares of the
Total Japanese Commitment, with each Japanese Borrowing to be comprised
of a Japanese Loan by each Japanese Lender equal to such Lender's
Proportionate Share of such Japanese Borrowing. Except as otherwise
provided herein, LLJS may borrow, repay and reborrow Japanese Loans
until the Revolving Termination Date.
(b) Notice of Borrowing. LLJS shall request each Japanese
Borrowing by delivering to Agent an irrevocable written notice in the
form of Exhibit D, appropriately completed (a "Notice of Japanese
Borrowing"), which specifies, among other things:
(i) The principal amount of the requested Japanese
Borrowing, which shall be in the minimum amount of
yen 1,000,000,000 or an integral multiple of yen 100,000,000 in
excess thereof;
(ii) The initial Interest Period selected by LLJS for the
requested Japanese Borrowing in accordance with Subparagraph
2.02(d); and
(iii) The date of the requested Japanese Borrowing, which
shall be a Business Day not later than the Revolving Termination
Date.
LLJS shall give each Notice of Japanese Borrowing to Agent at least four
(4) Business Days before the date of the requested Japanese Borrowing.
Each Notice of Japanese Borrowing shall be delivered by first-class mail
or facsimile to Agent at the office or facsimile number and during the
hours specified in Paragraph 8.01; provided, however, that LLJS shall
promptly deliver to Agent the original of any Notice of Japanese
Borrowing if initially delivered by facsimile. Agent shall promptly
notify each Japanese
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Lender of the amount of and Interest Period for each Japanese Loan to be
made by such Lender as part of the requested Japanese Borrowing.
(c) Interest Rates. LLJS shall pay interest on the unpaid
principal amount of each Japanese Loan from the date of such Japanese
Loan until the Maturity thereof, at a rate per annum equal at all times
during each Interest Period to the TIBO Rate for such Interest Period
plus the Applicable Margin therefor, such rate to change from time to
time as the Applicable Margin shall change. The number of Japanese
Borrowings shall not exceed four (4) at any time.
(d) Japanese Borrowing Interest Periods.
(i) The initial and each subsequent Interest Period
selected by LLJS for a Japanese Borrowing shall be one (1), two
(2), three (3) or six (6) months; provided, however, that (A) any
Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business
Day unless such next Business Day falls in another calendar
month, in which case such Interest Period shall end on the
immediately preceding Business Day; (B) any Interest Period which
begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month; (C) no Interest Period
shall end after a Scheduled Reduction Date unless, after giving
effect to such Interest Period, the aggregate principal amount of
all Japanese Loans having Interest Periods ending on or prior to
such Scheduled Reduction Date equals or exceeds the amount of the
Total Japanese Commitment on such Scheduled Reduction Date; and
(D) no Interest Period shall end after the Revolving Termination
Date.
(ii) LLJS shall notify Agent by an irrevocable written
notice in the form of Exhibit E, appropriately completed (a
"Notice of Japanese Borrowing Interest Period Selection"), at
least four (4) Business Days prior to the last day of each
Interest Period for a Japanese Borrowing of the Interest Period
selected by LLJS for the next succeeding Interest Period for such
Japanese Borrowing. Each Notice of Japanese Borrowing Interest
Period Selection shall be given to Agent by first-class mail or
facsimile to the office or the facsimile number and during the
hours specified in Paragraph 8.01; provided, however, that LLJS
shall promptly deliver to Agent the original of any Notice of
Japanese Borrowing Interest Period Selection initially delivered
by facsimile. If LLJS fails to notify Agent of the next Interest
Period for any Japanese Borrowing in accordance with this
Subparagraph 2.02(d), such Japanese Borrowing shall automatically
have an Interest Period of one (1) month following the current
Interest Period.
(e) Scheduled Payments. Unless earlier repayment is required by
Subparagraph 2.05(c), LLJS shall repay the principal amount of the
Japanese Borrowings on the Revolving Termination Date. LLJS shall pay
accrued interest on the unpaid principal amount of each Japanese Loan in
arrears on the last day of each Interest Period
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(and if any such Interest Period is equal to or longer than three (3)
months, every three (3) months), upon prepayment (to the extent thereof)
and at Maturity.
(f) Purpose. LLJS shall use the proceeds of the Japanese
Borrowings to repay in full the Outstanding Japanese Loan Facility and
for its general corporate purposes.
2.03. Amount Limitations, Commitment Reductions, Etc.
(a) Total Commitments. The aggregate principal amount of all U.S.
Revolving Loans outstanding at any time shall not exceed the Total U.S.
Revolving Commitment at such time, the aggregate principal amount of all
U.S. 364 Day Loans outstanding at any time shall not exceed the Total
U.S. 364 Day Commitment, and the aggregate principal amount of all
Japanese Loans outstanding at any time shall not exceed the Total
Japanese Commitment at such time. Until the Outstanding Japanese Loan
Facility is terminated and repaid in full, the unused amount of the
Commitments (including the Yen Equivalent of the U.S. Revolving
Commitments and the U.S. 364 Day Commitments) shall not be less than the
aggregate amount outstanding under the Outstanding Japanese Loan
Facility.
(b) Mandatory Reduction of Commitments. The Commitments shall be
reduced as follows:
(i) On each Scheduled Reduction Date, the Total U.S.
Revolving Commitment shall be permanently reduced by an amount
equal to Thirty-Four Million Three Hundred Seventy-Five Thousand
Dollars ($34,375,000).
(ii) If at any time after the Initial Closing Date LSI or
any of its Subsidiaries sells assets other than in the ordinary
course of business (including any sale of assets to be leased
back in connection with a "synthetic" lease of such assets), or
sells or issues any Indebtedness for borrowed money (including
Indebtedness evidenced by notes, bonds, debentures or other
similar instruments), yielding Net Proceeds which exceed
$50,000,000 for any single transaction or series of related
transactions, immediately after such sale or issuance the Total
U.S. 364 Day Commitment shall be permanently reduced by an
aggregate amount equal to the Net Proceeds of such sale or
issuance and, if such Net Proceeds exceed the Total U.S. 364 Day
Commitment, the Total U.S. Revolving Commitment shall be
permanently reduced by an aggregate amount equal to such excess
Net Proceeds; provided, that with respect to the Net Proceeds
from "synthetic" leases or Indebtedness for borrowed money, LSI
shall have no obligation under this provision to reduce the Total
U.S. Revolving Commitment if, after taking into account any
voluntary reduction pursuant to Subparagraph 2.03(c), such
reduction would reduce the aggregate of the Total U.S. Revolving
Commitment and the Dollar Equivalent of the Total Japanese
Commitment below $300,000,000.
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(c) Voluntary Reduction or Cancellation of Commitments. LSI may,
upon three (3) Business Days written notice to Agent, permanently reduce
or cancel in their entirety either of the Total U.S. Revolving
Commitment or the Total 364 Day Commitment and LLJS may, upon four (4)
Business Days written notice to Agent, permanently reduce or cancel in
its entirety the Total Japanese Commitment; provided, however, that:
(i) Any reduction of the Total U.S. Revolving Commitment
shall be in the amount of $15,000,000 or an integral multiple of
$5,000,000 in excess thereof and LSI shall not reduce or cancel
the Total U.S. Revolving Commitment prior to the Revolving
Termination Date, if, after giving effect to such reduction, the
aggregate principal amount of all U.S. Revolving Loans then
outstanding would exceed the Total U.S. Revolving Commitment as
so reduced or, after giving effect to such cancellation, any U.S.
Revolving Loan would then remain outstanding;
(ii) Any reduction of the Total U.S. 364 Day Commitment
shall be in the amount of $15,000,000 or an integral multiple of
$5,000,000 in excess thereof and LSI shall not reduce or cancel
the Total U.S. 364 Day Commitment prior to the U.S. 364 Day
Termination Date, if, after giving effect to such reduction, the
aggregate principal amount of all U.S. 364 Day Loans then
outstanding would exceed the Total U.S. 364 Day Commitment as so
reduced or, after giving effect to such cancellation, any U.S.
364 Day Loan would then remain outstanding; and
(iii) Any reduction of the Total Japanese Commitment shall
be in the amount of yen 1,000,000,000 or an integral multiple of
yen 100,000,000 in excess thereof and LLJS shall not reduce or
cancel the Total Japanese Commitment prior to the Revolving
Termination Date, if, after giving effect to such reduction, the
aggregate principal amount of all Japanese Loans then outstanding
would exceed the Total Japanese Commitment as so reduced or,
after giving effect to such cancellation, any Japanese Loan would
then remain outstanding.
(d) Effect of Commitment Reductions. From the effective date of
any reduction of any of the Commitments, the Commitment Fees payable
with respect to such Commitments pursuant to Subparagraph 2.04(b) shall
be computed on the basis of the Commitments as so reduced. Once reduced
or cancelled, Commitments may not be increased or reinstated without the
prior written consent of all Lenders holding Loans of the type covered
by such Commitments. Any reduction of the Total U.S. Revolving
Commitment or the Total U.S. 364 Day Commitment pursuant to Subparagraph
2.03(b) shall be applied ratably to reduce each Lender's U.S. Revolving
Commitment or U.S. 364 Day Commitment, as the case may be, in accordance
with clause (i) of Subparagraph 2.09(a). Any reduction of the Total U.S.
Revolving Commitment pursuant to clause (ii) of Subparagraph 2.03(b) or
Subparagraph 2.03(c) shall be in addition to, and not in substitution
for, the reduction of the Total U.S. Revolving Commitment required by
clause (i) of Subparagraph 2.03(b).
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2.04. Fees.
(a) Agent's Fee. LSI shall pay to Agent, for its own account,
agent's fees and other compensation in the amounts and at the times set
forth in the Agent's Fee Letter and the Agent's Syndication Letter.
(b) Commitment Fees.
(i) LSI shall pay to Agent, for the ratable benefit of
U.S. Lenders with U.S. Revolving Commitments as provided in
clause (iv) of Subparagraph 2.09(a), commitment fees (the "U.S.
Revolving Commitment Fees") equal to the per annum percentage
which is determined pursuant to the Pricing Grid of the daily
average difference between the Total U.S. Revolving Commitment
and the aggregate principal amount of all U.S. Revolving Loans
outstanding for each day during the period beginning on the date
of this Agreement and ending on the Revolving Termination Date.
LSI shall pay the U.S. Revolving Commitment Fees in arrears on
the last day in each March, June, September and December
(commencing with the first such day after the U.S. Closing Date)
and the Revolving Termination Date.
(ii) LSI shall pay to Agent, for the ratable benefit of
U.S. Lenders with U.S. 364 Day Commitments as provided in clause
(v) of Subparagraph 2.09(a), commitment fees (the "U.S. 364 Day
Commitment Fees") of twenty-two and one-half hundredths of one
percent (0.225%) of the daily average difference between the
Total U.S. 364 Day Commitment and the aggregate principal amount
of all U.S. 364 Day Loans outstanding for each day during the
period beginning on the date of this Agreement and ending on the
U.S. 364 Day Termination Date. LSI shall pay the U.S. 364 Day
Commitment Fees in arrears on the last day in each March, June,
September and December (commencing with the first such day after
the U.S. Closing Date) and the U.S. 364 Day Termination Date.
(iii) LLJS shall pay to Agent, for the ratable benefit of
Japanese Lenders as provided in clause (vi) of Subparagraph
2.09(a), commitment fees (the "Japanese Commitment Fees") equal
to the per annum percentage which is determined pursuant to the
Pricing Grid of the daily average difference between the Total
Japanese Commitment and the aggregate principal amount of all
Japanese Loans outstanding for each day during the period
beginning on the date of this Agreement and ending on the
Revolving Termination Date. LLJS shall pay the Japanese
Commitment Fees in arrears on the last day in each March, June,
September and December (commencing with the first such day after
the Japanese Closing Date) and the Revolving Termination Date.
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2.05. Prepayments.
(a) Terms of all Prepayments. Upon the prepayment of any
Borrowing (whether such prepayment is an optional prepayment under
Subparagraph 2.05(b) or a mandatory prepayment required by any provision
of this Agreement or the other Credit Documents, including a prepayment
upon acceleration), the Borrower making such prepayment shall pay to the
applicable Lenders (i) all accrued interest to the date of such
prepayment on the amount prepaid and (ii) if such prepayment is the
prepayment of LIBOR Loans or the prepayment of Japanese Loans on a day
other than the last day of an Interest Period for such Loans, all
amounts payable to such Lenders pursuant to Paragraph 2.12.
(b) Optional Prepayments. At its option, LSI may, upon one (1)
Business Day notice to Agent in the case of Base Rate Loans or three (3)
Business Days notice to Agent in the case of LIBOR Loans, prepay any
U.S. Borrowing in part, in an aggregate principal amount of $15,000,000
or more, or in whole. At its option, LLJS may, upon four (4) Business
Days notice to Agent, prepay any Japanese Borrowing in part, in an
aggregate principal amount of yen 1,000,000,000 or more, or in whole.
(c) Mandatory Prepayments. Borrowers shall prepay the Loans as
follows:
(i) If at any time the aggregate principal amount of all
U.S. Revolving Loans then outstanding exceeds the Total U.S.
Revolving Commitment at such time, LSI shall immediately prepay
U.S. Revolving Loans in an aggregate principal amount equal to
such excess.
(ii) If at any time the aggregate principal amount of all
U.S. 364 Day Loans then outstanding exceeds the Total U.S. 364
Day Commitment at such time, LSI shall immediately prepay U.S.
364 Day Loans in an aggregate principal amount equal to such
excess.
(iii) If at any time the aggregate principal amount of all
Japanese Loans then outstanding exceeds the Total Japanese
Commitment at such time, LLJS shall immediately prepay Japanese
Loans in an aggregate principal amount equal to such excess.
(iv) If at any time after the U.S. Closing Date LSI or any
of its Subsidiaries sells assets other than in the ordinary
course of business (including any sale of assets to be leased
back in connection with a "synthetic" lease of such assets), or
sells or issues any Indebtedness for borrowed money (including
Indebtedness evidenced by notes, bonds, debentures or other
similar instruments), yielding Net Proceeds which exceed
$50,000,000 for any single transaction or series of related
transactions, LSI shall, immediately after such sale or issuance,
prepay the U.S. 364 Day Loans in an aggregate amount equal to the
Net Proceeds of such sale or issuance and, if such Net Proceeds
exceed the total amount payable with respect to the U.S. 364
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Day Loans, LSI shall prepay the U.S. Revolving Loans in an
aggregate amount equal to such excess Net Proceeds; provided,
that with respect to the Net Proceeds from "synthetic" leases or
Indebtedness for borrowed money, LSI shall have no obligation
under this provision to prepay such U.S. Loans if, after taking
into account any optional prepayment pursuant to Subparagraph
2.05(b), such prepayment would reduce the aggregate of the
outstanding principal amount of the U.S. Loans and the Dollar
Equivalent of the outstanding principal amount of the Japanese
Loans below $300,000,000.
(d) Application of Prepayments. All prepayments of the U.S.
Borrowings shall, to the extent possible, be first applied to prepay
Base Rate Loans, if any, and then if any funds remain, to prepay LIBOR
Loans.
2.06. Other Payment Terms.
(a) Place and Manner.
(i) LSI shall make all payments due to each U.S. Lender or
Agent related to U.S. Borrowings by payments to Agent at Agent's
New York office located at the address specified in Paragraph
8.01, with each such payment due to a U.S. Lender to be for the
account of such Lender and such Lender's applicable Domestic
Lending Office or Euro-Dollar Lending Office.
(ii) LLJS shall make all payments due to each Japanese
Lender or Agent related to Japanese Borrowings by payments to
Agent at Agent's Tokyo office located at the address specified in
Paragraph 8.01, with each such payment due to a Japanese Lender
to be for the account of such Lender and such Lender's Japanese
Lending Office.
(iii) Each Borrower shall, unless otherwise directed by
Agent, make all other payments due to each Lender or Agent
hereunder by payments to Agent's New York office located at the
address specified in Paragraph 8.01, with each such payment due
to a Lender to be for the account of such Lender and such
Lender's Applicable Lending Office.
(iv) Borrowers shall make all payments hereunder in the
lawful currency required by Subparagraph 2.06(c) and in same day
or immediately available funds and without deduction or offset
not later than 11:00 a.m. (New York time, in the case of any
payment to be made to Agent's New York office, or Tokyo time, in
the case of any payment to be made to Agent's Tokyo office) and
on the date due. Agent shall promptly disburse to each Lender
each payment received by Agent for the account of such Lender.
(b) Date. Whenever any payment due hereunder shall fall due on a
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in
the computation of interest or fees, as the case may be, unless such
next Business Day falls in another calendar month, in which case such
payment shall be due on the immediately preceding Business Day.
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(c) Currency of Payment.
(i) LSI shall pay principal of, interest on and all other
amounts related to U.S. Borrowings in Dollars, and LLJS shall pay
principal of, interest on and all other amounts related to
Japanese Borrowings in Yen. Borrowers shall pay all other amounts
payable under this Agreement and the other Credit Documents in
Dollars. If, for any reason, LLJS is prohibited by any
Governmental Rule from making any required Yen payment hereunder
in Yen, LLJS shall make such payment in Dollars in the Dollar
Equivalent of such Yen amount.
(ii) If any amounts required to be paid by either Borrower
under this Agreement, any other Credit Document or any order,
judgment or award given or rendered in relation hereto or thereto
has to be converted from the currency (the "first currency") in
which the same is payable hereunder or thereunder into another
currency (the "second currency") for the purpose of (A) making or
filing a claim or proof against such Borrower with any
Governmental Authority, (B) obtaining an order or judgment in any
court or other tribunal or (C) enforcing any order or judgment
given or made in relation hereto, such Borrower shall, to the
fullest extent permitted by law, indemnify and hold harmless each
of the Persons to whom such amounts are payable from and against
any loss suffered as a result of any discrepancy between (1) the
rate of exchange used for such purpose to convert the amounts in
question from the first currency into the second currency and (2)
the rate or rates of exchange at which such Person may, using
reasonable efforts in the ordinary course of business, purchase
the first currency with the second currency upon receipt of a sum
paid to it in satisfaction, in whole or in part, of any such
order, judgment, claim or proof. The foregoing indemnity shall
constitute a separate obligation of each Borrower distinct from
their other respective obligations hereunder and shall survive
the giving or making of any judgment or order in relation to all
or any of such obligations. The respective obligations of
Borrowers under this Subparagraph 2.06(c) shall survive the
payment and performance of their respective Obligations and the
termination of this Agreement.
(d) Late Payments. If any amount required to be paid by either
Borrower under this Agreement or the other Credit Documents (including,
without limitation, principal or interest payable on any Loan, any fees
or any other amount) remains unpaid after such amount is due and after
the expiration of any applicable grace period, such Borrower shall pay
interest on the aggregate, outstanding balance of such amount from the
date due until such amount is paid in full at a per annum rate equal to
(i) in the case any amount payable in Dollars, the Base Rate plus two
percent (2.00%), such rate to change from time to time as the Base Rate
shall change, and (ii) in the case of any amount payable in Yen, the
Overnight Rate for such amount plus three percent (3.00%), such rate to
change from time to time as the Overnight Rate shall change.
(e) Application of Payments. All payments hereunder shall be
applied first to unpaid fees, costs and expenses then due and payable
under this Agreement or the other Credit Documents, second to accrued
interest then due and payable under this Agreement
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or the other Credit Documents and finally to reduce the principal amount
of outstanding Loans. Upon an Event of Default or if the applicable
Borrower does not specify the Borrowing to which any payment relates, a
payment in Dollars to be applied to accrued interest or principal shall
be applied to all accrued interest or principal then due and payable on
all outstanding U.S. Loans and a payment in Yen to be applied to accrued
interest or principal shall be applied to all accrued interest or
principal then due and payable on all outstanding Japanese Loans.
(f) Failure to Pay Agent. Unless Agent shall have received notice
from a Borrower at least one (1) Business Day prior to the date on which
any payment is due to Lenders hereunder that such Borrower will not make
such payment in full, Agent shall be entitled to assume that such
Borrower has made or will make such payment in full to Agent on such
date and Agent may, in reliance upon such assumption, cause to be paid
to the applicable Lenders on such due date an amount equal to the amount
then due such Lenders. If and to the extent such Borrower shall not have
so made such payment in full to Agent, each such Lender shall repay to
Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount
is distributed to such Lender until the date such Lender repays such
amount to Agent, at a per annum rate equal to (i) the Federal Funds Rate
for the first three (3) days and the Base Rate thereafter for any amount
in Dollars or (ii) the Overnight Rate plus one percent (1%) for any
amount in Yen. A certificate of Agent submitted to any Lender with
respect to any amount owing by such Lender under this Subparagraph
2.06(f) shall constitute prima facie evidence of such amount.
2.07. Loan Accounts; Notes.
(a) Loan Accounts. The obligation of each Borrower to repay the
Loans made to it by each Lender and to pay interest thereon at the rates
provided herein shall be evidenced by an account or accounts maintained
by such Lender on its books (individually, a "Loan Account"), except
that any Lender may request that its U.S. Loans be evidenced by a note
or notes pursuant to Subparagraph 2.07(b). Each Lender shall record in
its Loan Accounts (i) the date and amount of each Loan made by such
Lender, (ii) the interest rates applicable to each such Loan and the
effective dates of all changes thereto, (iii) the Interest Period for
each LIBOR Loan and each Japanese Loan, (iv) the date and amount of each
principal and interest payment on each Loan and (v) such other
information as such Lender may determine is necessary for the
computation of principal and interest payable to it by each Borrower
hereunder; provided, however, that any failure by a Lender to make, or
any error by any Lender in making, any such notation shall not affect
Borrowers' Obligations hereunder. The Loan Accounts shall constitute
prima facie evidence of the matters noted therein.
(b) Notes. If any Lender so requests, such Lender's U.S. Loans
shall be evidenced by one or more promissory notes in the form of
Exhibit F (individually, a "Note"), each of which shall be (i) payable
to the order of such Lender, (ii) in the amount of such Lender's U.S.
Revolving Commitment or U.S. 364 Day Commitment, as the case may be,
(iii) dated the U.S. Closing Date, and (iv) otherwise appropriately
completed.
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2.08. Loan Funding.
(a) Lender Funding and Disbursements to Borrowers.
(i) Each U.S. Lender shall, before 11:00 a.m. (New York
time) on the date of each U.S. Borrowing, make available to Agent
at Agent's New York office specified in Paragraph 8.01, in
immediately available funds, such Lender's Proportionate Share of
such U.S. Borrowing. After Agent's receipt of such funds and upon
satisfaction of the applicable conditions set forth in Section
III, Agent shall promptly disburse such funds to LSI no later
than 1:00 p.m. (New York time) in immediately available funds.
Agent shall disburse the proceeds of such U.S. Borrowing to the
account or accounts specified by LSI in the applicable Notice of
U.S. Borrowing.
(ii) Each Japanese Lender shall, before 10:00 a.m. (Tokyo
time) on the date of each Japanese Borrowing, make available to
Agent at Agent's Tokyo office specified in Paragraph 8.01, in
immediately available funds, such Lender's Proportionate Share of
such Japanese Borrowing. After Agent's receipt of such funds and
upon satisfaction of the applicable conditions set forth in
Section III, Agent shall promptly disburse such funds to LLJS no
later than 1:00 p.m. (Tokyo time) in immediately available funds.
Agent shall disburse the proceeds of such Japanese Borrowing to
the account or accounts specified by LLJS in the applicable
Notice of Japanese Borrowing.
(b) Lender Failure to Fund. Unless Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Lender
will not make available to Agent such Lender's Proportionate Share of
such Borrowing, Agent shall be entitled to assume that such Lender has
made or will make such portion available to Agent on the date of such
Borrowing in accordance with Subparagraph 2.08(a), and Agent may on such
date, in reliance upon such assumption, disburse or otherwise credit to
the applicable Borrower a corresponding amount. If any Lender does not
make the amount of its Proportionate Share of such Borrowing available
to Agent on or prior to the date of such Borrowing, such Lender shall
pay to Agent, on demand, interest which shall accrue on such amount from
the date of such Borrowing until such amount is paid to Agent at rates
equal to (i) the Federal Funds Rate for the first three (3) days and the
Base Rate thereafter for any amount in Dollars or (ii) the Overnight
Rate plus one percent (1%) for any amount in Yen. A certificate of Agent
submitted to any Lender with respect to any amount owing by such Lender
under this Subparagraph 2.08(b) shall constitute prima facie evidence of
such amount. If the amount of any Lender's Proportionate Share of any
Borrowing is not paid to Agent by such Lender within three (3) Business
Days after the date of such Borrowing, the applicable Borrower shall
repay such amount to Agent, on demand, together with interest thereon,
for each day from the date such amount was disbursed to such Borrower
until the date such amount is repaid to Agent, at the interest rate
applicable at the time to the Loans comprising such Borrowing.
(c) Lenders' Obligations Several. The failure of any Lender to
make a Loan to be made by it as part of any Borrowing shall not relieve
any other Lender of its
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obligation hereunder to make its Loan as part of such Borrowing, but no
Lender shall be obligated in any way to make any Loan which another
Lender has failed or refused to make or otherwise be in any way
responsible for the failure or refusal of any other Lender to make any
Loan required to be made by such other Lender.
2.09. Pro Rata Treatment.
(a) Borrowings, Commitment Reductions, Etc. Except as otherwise
provided herein:
(i) Each U.S. Revolving Borrowing and reduction in the
Total U.S. Revolving Commitment shall be made or shared by U.S.
Lenders with U.S. Revolving Commitments pro rata according to
their applicable respective U.S. Revolving Commitments, each U.S.
364 Day Borrowing and reduction in the Total U.S. 364 Day
Commitment shall be made or shared by U.S. Lenders with U.S. 364
Day Commitments pro rata according to their applicable respective
U.S. 364 Day Commitments, and each Japanese Borrowing and
reduction in the Total Japanese Commitment shall be made or
shared by Japanese Lenders pro rata according to their applicable
respective Japanese Commitments;
(ii) Each payment of principal on Loans in any Borrowing
shall be shared among Lenders which made or funded the Loans in
such Borrowing pro rata according to the respective unpaid
principal amounts of such Loans then owed to such Lenders;
(iii) Each payment of interest on Loans in any Borrowing
shall be shared among Lenders which made or funded the Loans in
such Borrowing pro rata according to (A) the respective unpaid
principal amounts of such Loans so made or funded by such Lenders
and (B) the dates on which such Lenders so made or funded such
Loans;
(iv) Each payment of U.S. Revolving Commitment Fees shall
be shared among U.S. Lenders with U.S. Revolving Commitments
(except for Defaulting Lenders) pro rata according to (A) their
respective Proportionate Shares of the Total U.S. Revolving
Commitment and (B) in the case of each U.S. Lender which becomes
a U.S. Lender with a U.S. Revolving Commitment hereunder after
the date hereof and before the Revolving Termination Date, the
date upon which such U.S. Lender so became a U.S. Lender with a
U.S. Revolving Commitment;
(v) Each payment of U.S. 364 Day Commitment Fees shall be
shared among U.S. Lenders with U.S. 364 Day Commitments (except
for Defaulting Lenders) pro rata according to (A) their
respective Proportionate Shares of the Total U.S. 364 Day
Commitment and (B) in the case of each U.S. Lender which becomes
a U.S. Lender with a U.S. 364 Day Commitment hereunder after the
date hereof and before the U.S. 364 Day Termination Date, the
date upon which such U.S. Lender so became a U.S. Lender with a
U.S. 364 Day Commitment;
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(vi) Each payment of Japanese Commitment Fees shall be
shared among Japanese Lenders (except for Defaulting Lenders) pro
rata according to (A) their respective Proportionate Shares of
the Total Japanese Commitment and (B) in the case of each
Japanese Lender which becomes a Japanese Lender hereunder after
the date hereof and before the Revolving Termination Date, the
date upon which such Japanese Lender so became a Japanese Lender;
(vii) Each payment of interest (other than interest on
Loans) shall be shared among Lenders and Agent owed the amount
upon which such interest accrues pro rata according to (A) the
respective amounts so owed such Lenders and Agent and (B) the
dates on which such amounts became owing to such Lenders and
Agent; and
(viii) All other payments under this Agreement and the
other Credit Documents shall be for the benefit of the Person or
Persons specified.
(b) Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any
right of setoff, or otherwise) on account of Loans owed to it as part of
any Borrowing in excess of its ratable share of payments on account of
all Loans in such Borrowing obtained by all applicable Lenders entitled
to such payments, such Lender shall forthwith purchase from such other
Lenders such participations in their Loans as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with
each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase shall be rescinded and each other applicable Lender shall repay
to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such other Lender's ratable
share (according to the proportion of (i) the amount of such other
Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable
by the purchasing Lender in respect of the total amount so recovered.
Each Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this Subparagraph 2.09(b) may, to the fullest
extent permitted by law, exercise all its rights of payment (including
the right of setoff) with respect to such participation as fully as if
such Lender were the direct creditor of such Borrower in the amount of
such participation.
2.10. Change of Circumstances.
(a) Inability to Determine Rates. If, on or before the first day
of any Interest Period for any LIBOR Loan or any Japanese Loan, (i) any
U.S. Lender or Japanese Lender, as the case may be, shall advise Agent
that the LIBO Rate or TIBO Rate, as the case may be, for such Interest
Period cannot be adequately and reasonably determined due to the
unavailability of funds in or other circumstances affecting the London
interbank market or the Tokyo interbank market, as the case may be, or
(ii) any U.S. Lender or Japanese Lender, as the case may be, shall
advise Agent that the rate of interest for such Loan does not adequately
and fairly reflect the cost to such Lender of making or maintaining such
Loan, Agent shall immediately give notice of such condition to the
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applicable Borrower and the other U.S. Lenders or Japanese Lenders, as
the case may be. After the giving of any such notice and until Agent
shall otherwise notify the applicable Borrower that the circumstances
giving rise to such condition no longer exist, such Borrower's right to
obtain, continue or convert to LIBOR Loans or Japanese Loans, as the
case may be, shall be suspended. Any LIBOR Loans outstanding at the
commencement of any such suspension affecting the LIBO Rate shall be
converted at the end of the then current Interest Period for such LIBOR
Loans into Base Rate Loans unless such suspension has then ended. All
Japanese Loans outstanding at the commencement of any such suspension
affecting the TIBO Rate shall after the end of the then current Interest
Period for such Japanese Loans bear interest at the Overnight Rate plus
one percent (1.0%), such rate to change from time to time as the
Overnight Rate shall change, until such suspension has ended.
(b) Illegality. If, after the date of this Agreement, the
adoption of any Governmental Rule, any change in any Governmental Rule
or the application or requirements thereof (whether such change occurs
in accordance with the terms of such Governmental Rule as enacted, as a
result of amendment or otherwise), any change in the interpretation or
administration of any Governmental Rule by any Governmental Authority,
or compliance by any Lender with any request or directive (whether or
not having the force of law) of any Governmental Authority (a "Change of
Law") shall make it unlawful or impossible for any U.S. Lender to make
or maintain any LIBOR Loans or any Japanese Lender to make or maintain
any Japanese Loans, such Lender shall immediately notify Agent and the
applicable Borrower of such Change of Law. Upon receipt of such notice,
(i) such Borrower's right to obtain, continue or convert to LIBOR Loans
or Japanese Loans, as the case may be, shall be suspended until such
time as Agent shall notify such Borrower and the applicable Lenders that
the circumstances giving rise to such suspension no longer exist, and
(ii) such Borrower shall, if so requested by such Lender, immediately
repay such Loans if such Lender shall notify such Borrower that such
Lender may not lawfully continue to fund and maintain such Loans. Any
conversion or prepayment of LIBOR Loans or Japanese Loans made pursuant
to the preceding sentence prior to the last day of an Interest Period
for such Loans shall be deemed a prepayment thereof for purposes of
Paragraph 2.12. After any Lender notifies Agent and the applicable
Borrower of such a Change in Law and until such Lender notifies Agent
and such Borrower that it is no longer unlawful or impossible for such
Lender to make or maintain a LIBOR Loan, all U.S. Loans of such Lender
shall be Base Rate Loans.
(c) Increased Costs. If, after the date of this Agreement, any
Change of Law:
(i) Shall subject any U.S. Lender or Japanese Lender to
any tax, duty or other charge with respect to any LIBOR Loan or
Japanese Loan, as the case may be, or shall change the basis of
taxation of payments by either Borrower to any such Lender on or
in respect to such LIBOR Loan or Japanese Loan, as the case may
be, under this Agreement (except for changes in the rate of
taxation on the overall net income of such Lender imposed by its
jurisdiction of incorporation or the jurisdiction of its
Applicable Lending Office); or
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(ii) Shall impose, modify or hold applicable any reserve
(excluding any Reserve Requirement or other reserve to the extent
included in the calculation of the LIBO Rate or TIBO Rate for any
Loans), special deposit or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances or loans by, or any other acquisition of funds by any
Lender for any LIBOR Loans or Japanese Loans, as the case may be;
or
(iii) Shall impose on any Lender any other condition
related to any LIBOR Loans or Japanese Loans or such Lender's
Commitments;
And the effect of any of the foregoing is to increase the cost to such
Lender of making, continuing or maintaining any such LIBOR Loans,
Japanese Loans or its Commitments or to reduce any amount receivable by
such Lender hereunder; then the applicable Borrower shall from time to
time, within twenty (20) days after written demand by such Lender, pay
to such Lender additional amounts sufficient to reimburse such Lender
for such increased costs or to compensate such Lender for such reduced
amounts; provided, however, that such Borrower shall have no obligation
to make any payment to any demanding party under this Subparagraph
2.10(c) on account of any such increased costs or reduced amounts unless
such Borrower receives notice of such increased costs or reduced amounts
from the demanding party within six (6) months after they are incurred
or realized. A certificate setting forth in reasonable detail the amount
of such increased costs or reduced amounts, submitted by such Lender to
such Borrower, shall constitute prima facie evidence of such costs or
amounts. The obligations of Borrowers under this Subparagraph 2.10(c)
shall survive the payment and performance of the Obligations and the
termination of this Agreement.
(d) Capital Requirements. If, after the date of this Agreement,
any Lender determines that (i) any Change of Law affects the amount of
capital required or expected to be maintained by such Lender or any
Person controlling such Lender (a "Capital Adequacy Requirement") and
(ii) the amount of capital maintained by such Lender or such Person
which is attributable to or based upon the Loans, the Commitments or
this Agreement must be increased as a result of such Capital Adequacy
Requirement (taking into account such Lender's or such Person's policies
with respect to capital adequacy), the applicable Borrower shall pay to
such Lender or such Person, within twenty (20) days after written demand
of such Lender, such amounts as such Lender or such Person shall
determine are necessary to compensate such Lender or such Person for the
increased costs to such Lender or such Person of such increased capital;
provided, however, that such Borrower shall have no obligation to make
any payment to any demanding party under this Subparagraph 2.10(d) on
account of any such increased costs unless such Borrower receives notice
of such increased costs from the demanding party within twelve (12)
months after they are incurred or realized. A certificate setting forth
in reasonable detail the amount of such increased costs, submitted by
any Lender to such Borrower, shall constitute prima facie evidence of
such costs. The obligations of Borrowers under this Subparagraph 2.10(d)
shall survive the payment and performance of the Obligations and the
termination of this Agreement.
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(e) Mitigation. Any Lender which becomes aware of (i) any Change
of Law which will make it unlawful or impossible for such Lender to make
or maintain any LIBOR Loan or Japanese Loan or (ii) any Change of Law or
other event or condition which will obligate either Borrower to pay any
amount pursuant to Subparagraph 2.10(c) or Subparagraph 2.10(d) shall
notify such Borrower and Agent thereof as promptly as practical. If any
Lender has given notice of any such Change of Law or other event or
condition and thereafter becomes aware that such Change of Law or other
event or condition has ceased to exist, such Lender shall notify such
Borrower and Agent thereof as promptly as practical. Each Lender
affected by any Change of Law which makes it unlawful or impossible for
such Lender to make or maintain any LIBOR Loan or Japanese Loan or to
which either Borrower is obligated to pay any amount pursuant to
Subparagraph 2.10(c) or Subparagraph 2.10(d) shall use reasonable
commercial efforts (including changing the jurisdiction of its
Applicable Lending Offices) to avoid the effect of such Change of Law or
to avoid or materially reduce any amounts which either Borrower is
obligated to pay pursuant to Subparagraph 2.10(c) or Subparagraph
2.10(d) if, in the reasonable opinion of such Lender, such efforts would
not be disadvantageous to such Lender or contrary to such Lender's
normal banking practices.
2.11. Taxes on Payments.
(a) Payments Free of Taxes. All payments made by Borrowers under
this Agreement and the other Credit Documents shall be made free and
clear of, and without deduction or withholding for or on account of, all
present and future income, stamp, documentary and other taxes and
duties, and all other levies, imposts, charges, fees, deductions and
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority (except net income taxes and
franchise taxes in lieu of net income taxes imposed on Agent or any
Lender by its jurisdiction of incorporation or the jurisdiction in which
its Applicable Lending Office is located) (all such non-excluded taxes,
duties, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"). If any Taxes are
required to be withheld from any amounts payable to Agent or any Lender
hereunder or under the other Credit Documents, the amounts so payable to
Agent or such Lender shall be increased to the extent necessary to yield
to Agent or such Lender (after payment of all Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement and the other Credit Documents. Whenever any
Taxes are payable by either Borrower, as promptly as possible
thereafter, such Borrower shall send to Agent for its own account or for
the account of such Lender, as the case may be, a certified copy of an
original official receipt received by such Borrower showing payment
thereof. If either Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to Agent the required
receipts or other required documentary evidence, such Borrower shall
indemnify Agent and Lenders for any Taxes (including interest or
penalties) that may become payable by Agent or any Lender as a result of
any such failure. The obligations of Borrowers under this Subparagraph
2.11(a) shall survive the payment and performance of the Obligations and
the termination of this Agreement.
(b) Withholding Exemption Certificates. On or prior to the
applicable Closing Date, each U.S. Lender which is not organized under
the laws of the United
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States of America or a state thereof and each Japanese Lender which is
not organized under the laws of Japan shall deliver to LSI or LLJS,
respectively, and Agent such certificates and other evidence as such
Borrower or Agent may reasonably request to establish that such Lender
is entitled to receive payments under this Agreement on account of any
U.S. Borrowing or Japanese Borrowing, as the case may be, without
deduction or withholding of any United States federal income taxes or
Japanese income taxes, respectively. Each such Lender further agrees (i)
promptly to notify the applicable Borrower and Agent of any change of
circumstances (including any change in any treaty, law or regulation)
which would prevent such Lender from receiving payments hereunder
without any deduction or withholding of such taxes and (ii) on or before
the date that any certificate or other form delivered by such Lender
under this Subparagraph 2.11(b) expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent such
certificate or form previously delivered by such Lender, to deliver to
the applicable Borrower and Agent a new certificate or form, certifying
that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of such taxes. If any Lender fails to
provide to Borrowers or Agent pursuant to this Subparagraph 2.11(b) (or,
in the case of an Assignee Lender, Subparagraph 8.05(c)) any
certificates or other evidence required by such provision to establish
that such Lender is, at the time it becomes a Lender hereunder, entitled
to receive payments under this Agreement on account of any U.S.
Borrowing or Japanese Borrowing, as the case may be, without deduction
or withholding of any United States federal income taxes or Japanese
income taxes, respectively, such Lender shall not be entitled to any
indemnification under Subparagraph 2.11(a) for any Taxes imposed on such
Lender primarily as a result of such failure.
(c) Mitigation. If Agent or any Lender claims any additional
amounts to be payable to it pursuant to this Paragraph 2.11, such Person
shall use reasonable commercial efforts to file any certificate or
document requested in writing by the applicable Borrower reflecting a
reduced rate of withholding or to change the jurisdiction of its
Applicable Lending Office if the making of such a filing or such change
in the jurisdiction of its Applicable Lending Office would avoid the
need for or materially reduce the amount of any such additional amounts
which may thereafter accrue and if, in the reasonable opinion of such
Person, in the case of a change in the jurisdiction of its Applicable
Lending Office, such change would not be disadvantageous to such Person
or contrary to such Person's normal banking practices.
(d) Tax Returns. Nothing contained in this Paragraph 2.11 shall
require Agent or any Lender to make available any of its tax returns (or
any other information relating to its taxes which it deems to be
confidential).
(e) Lender Rate Contracts. Nothing contained in this Paragraph
2.11 shall override or supercede any term or provision of any Lender
Rate Contract regarding withholding taxes relating to Rate Contracts.
2.12. Funding Loss Indemnification. If either Borrower shall (a) repay
or prepay any LIBOR Loan or Japanese Loan, or convert any LIBOR Loan, on any day
other than the last day of an Interest Period therefor (whether a scheduled
payment, an optional prepayment or
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conversion, a mandatory prepayment or conversion, a payment upon acceleration or
otherwise), (b) fail to borrow any LIBOR Loan or Japanese Loan after delivering
the applicable Notice of Borrowing therefor to Agent (whether as a result of the
failure to satisfy any applicable conditions or otherwise) or (c) fail to
convert any U.S. Borrowing into LIBOR Loans in accordance with a Notice of U.S.
Borrowing Conversion delivered to Agent (whether as a result of the failure to
satisfy any applicable conditions or otherwise), such Borrower shall, within
twenty (20) days after written demand of such Lender, reimburse such Lender for
and hold such Lender harmless from all reasonable costs and losses incurred by
such Lender as a result of such repayment, prepayment, conversion or failure;
provided, however, that such Borrower shall have no obligation to make any
payment to any demanding party under this Paragraph 2.12 on account of any such
costs or losses unless such Borrower receives notice of such costs or losses
from the demanding party within six (6) months after they are incurred or
realized. Borrowers understand that such costs and losses may include, without
limitation, losses incurred by a Lender as a result of funding and other
contracts entered into by such Lender to fund a LIBOR Loan or Japanese Loan.
Each Lender demanding payment under this Paragraph 2.12 shall deliver to the
applicable Borrower, with a copy to Agent, a certificate setting forth the
amount of costs and losses for which demand is made, which certificate shall set
forth in reasonable detail the calculation of the amount demanded. Such a
certificate so delivered to such Borrower shall constitute prima facie evidence
of such costs and losses. The obligations of Borrowers under this Paragraph 2.12
shall survive the payment and performance of the Obligations and the termination
of this Agreement.
2.13. Security.
(a) The Obligations of LLJS shall be secured by a guaranty duly
executed by LSI in the form of Exhibit G (the "LSI Guaranty").
(b) Further Assurances. Each Borrower shall deliver to Agent such
other instruments, agreements, certificates, opinions and documents
(including Uniform Commercial Code financing statements) as Agent may
reasonably request to implement the provisions of Subparagraph 2.13(a)
and otherwise to establish, maintain, protect and evidence the rights
provided to Agent, for the benefit of Agents and Lenders, pursuant to
the Security Documents. Each Borrower shall fully cooperate with Agent
and Lenders and perform all additional acts reasonably requested by
Agent or any Lender to effect the purposes of this Paragraph 2.13.
2.14. Replacement of Lenders. If any Lender shall (a) become a
Defaulting Lender more than one (1) time in a period of twelve (12) consecutive
months, (b) continue as a Defaulting Lender for more than five (5) Business Days
at any time, (c) suspend its obligation to make or maintain LIBOR Loans or
Japanese Loans pursuant to Subparagraph 2.10(b) for a reason which is not
applicable to any other Lender or (d) demand any payment under Subparagraph
2.10(c), 2.10(d) or 2.11(a) for a reason which is not applicable to any other
Lender, then Agent may (or upon the written request of Borrowers, shall) replace
such Lender (the "affected Lender"), or cause such affected Lender to be
replaced, with another lender (the "replacement Lender") satisfying the
requirements of an Assignee Lender under Subparagraph 8.05(c), by having the
affected Lender sell and assign all of its rights and obligations under this
Agreement and the other Credit Documents to the replacement Lender pursuant to
Subparagraph 8.05(c); provided, however, that if Borrowers seek to exercise such
right, they must do so within
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sixty (60) days after either Borrower first knows or should have known of the
occurrence of the event or events giving rise to such right, and neither Agent
nor any Lender shall have any obligation to identify or locate a replacement
Lender for Borrowers. Upon receipt by any affected Lender of a written notice
from Agent stating that Agent is exercising the replacement right set forth in
this Paragraph 2.14, such affected Lender shall sell and assign all of its
rights and obligations under this Agreement and the other Credit Documents to
the replacement Lender pursuant to an Assignment Agreement and Subparagraph
8.05(c) for a purchase price equal to the sum of the principal amount of the
affected Lender's Loans so sold and assigned, all accrued and unpaid interest
thereon and its ratable share of all fees to which it is entitled.
SECTION III. CONDITIONS.
3.01. Initial Closing Date Conditions. The obligations of the applicable
Lenders to make the Loans to be made on the Initial Closing Date are subject to
(a) receipt by Agent, on or prior to the Initial Closing Date, of each item
listed in Part I of Schedule 3.01, each in form and substance satisfactory to
Agent and each Lender, and with sufficient copies for, Agent and each Lender,
(b) the termination of the Outstanding U.S. Loan Facility and payment by LSI in
full of all amounts payable thereunder, (c) either confirmation in form and
substance satisfactory to Agent and each Lender that the transactions
contemplated by this Agreement do not contravene the provisions of the
Outstanding Japanese Loan Facility, if the Initial Closing Date is the U.S.
Closing Date, or the termination of the Outstanding Japanese Loan Facility and
payment by LLJS in full of all amounts payable thereunder, if the Initial
Closing Date is the Japanese Closing Date, and (d) confirmation in form and
substance satisfactory to Agent and each Lender that the transactions
contemplated by this Agreement do not contravene the provisions of the
Outstanding Japanese Lease Facility. The obligations of the applicable Lenders
to maintain the Loans made on the Initial Closing Date are subject to receipt by
Agent within ten (10) Business Days after the Initial Closing Date of each item
listed in Part II of Schedule 3.01, each in form and substance satisfactory to
Agent and each Lender, and with sufficient copies for, Agent and each Lender.
3.02. Second Closing Date Conditions Precedent. The obligations of the
applicable Lenders to make the Loans to be made on the Second Closing Date are
subject to (a) the satisfaction of the conditions set forth in Paragraph 3.01,
(b) if such Loans are U.S. Loans, the receipt by Agent, on or prior to the
Second Closing Date, of each Note requested by a U.S. Lender, each duly executed
by LSI, and (c) if such Loans are Japanese Loans, the receipt by Agent of
written notice from LLJS specifying the Total Japanese Commitment on the day
four (4) Business Days prior to the Second Closing Date and the receipt by Agent
of the LSI Guaranty duly executed by LSI and the termination of the Outstanding
Japanese Loan Facility and payment by LLJS in full of all amounts payable
thereunder on or prior to the Second Closing Date.
3.03. Conditions Precedent to Each Credit Event. The occurrence of each
Credit Event (including the initial Borrowing) is subject to the further
conditions that:
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(a) Borrowers shall have delivered to Agent the Notice of
Borrowing, Notice of U.S. Borrowing Conversion or Notice of Interest
Period Selection, as the case may be, for such Credit Event in
accordance with this Agreement; and
(b) On the date such Credit Event is to occur and after giving
effect to such Credit Event, the following shall be true and correct:
(i) The representations and warranties of Borrowers and
their Subsidiaries set forth in Paragraph 4.01 and in the other
Credit Documents are true and correct in all material respects as
if made on such date (except for representations and warranties
expressly made as of a specified date, which shall be true as of
such date);
(ii) No Default has occurred and is continuing or will
result from such Credit Event; and
(iii) All of the Credit Documents are in full force and
effect.
The submission by either Borrower to Agent of each Notice of Borrowing, each
Notice of U.S. Borrowing Conversion (other than a notice for a conversion to
Base Rate Loans) and each Notice of Interest Period Selection (other than a
notice selecting an Interest Period of one (1) month for any Japanese Borrowing)
shall be deemed to be a representation and warranty by such Borrower that each
of the statements set forth above in this Subparagraph 3.03(b) is true and
correct as of the date of such notice.
3.04. Covenant to Deliver. Borrowers agree (not as a condition but as a
covenant) to deliver to Agent each item required to be delivered to Agent as a
condition to the occurrence of any Credit Event if such Credit Event occurs.
Borrowers expressly agree that the occurrence of any such Credit Event prior to
the receipt by Agent of any such item shall not constitute a waiver by Agent or
any Lender of Borrowers' obligation to deliver such item.
SECTION IV. REPRESENTATIONS AND WARRANTIES.
4.01. Borrowers' Representations and Warranties. In order to induce
Agent and Lenders to enter into this Agreement, Borrowers hereby represent and
warrant to Agent and Lenders as follows:
(a) Organization and Powers. Each of Borrowers and the
Significant Subsidiaries is a corporation or partnership duly organized
or formed, as the case may be, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation, is
qualified to do business and is in good standing in each jurisdiction in
which the failure so to qualify or be in good standing would result in a
Material Adverse Effect and has all requisite power and authority to own
its assets and carry on its business and, with respect to each Borrower,
to execute, deliver and perform its obligations under the Credit
Documents and the Symbios Acquisition Documents to which it is a party.
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(b) Authorization; No Conflict. The execution, delivery and
performance by each Borrower of the Credit Documents and the Symbios
Acquisition Documents to which it is a party have been duly authorized
by all necessary corporate action of each Borrower and do not and will
not (i) contravene the terms of the certificate or articles, as the case
may be, of incorporation and the bylaws of either Borrower or result in
a breach of or constitute a default under any material Contractual
Obligation to which either Borrower is a party or by which it or its
properties may be bound or affected; or (ii) violate any provision of
Governmental Rule binding on or affecting either Borrower.
(c) Binding Obligation. The Credit Documents and the Symbios
Acquisition Documents constitute, or when delivered will constitute,
legal, valid and binding obligations of each Borrower which is a party
thereto, enforceable against such Borrower in accordance with their
respective terms, except to the extent the enforceability thereof would
be subject to bankruptcy, insolvency, receivership or similar laws
providing relief from creditors, or principles of equity generally.
(d) Governmental Consents. No authorization, consent, approval,
license, exemption of, or filing or registration with, any Governmental
Authority, or approval or consent of any other Person, is required for
the due execution, delivery or performance by either Borrower of any of
the Credit Documents or the Symbios Acquisition Documents except those
set forth on Schedule 4.01(d) which have been obtained or made and are
in full force and effect.
(e) No Defaults. None of Borrowers and their Significant
Subsidiaries is in default under any material Contractual Obligation or
Governmental Rule to which it is a party or by which it or its
properties may be bound which, individually or together with all such
defaults, could reasonably be expected to have a Material Adverse
Effect.
(f) Title to Properties. Each Borrower and each Significant
Subsidiary has good record and marketable title in fee simple to, or
valid leasehold interests in, all real property necessary or used in the
ordinary conduct of their respective businesses, except for such defects
in title as could not, individually or in the aggregate, have a Material
Adverse Effect. The property of Borrowers and their Significant
Subsidiaries is subject to no Liens, other than Liens permitted under
Subparagraph 5.02(a).
(g) Litigation. Except as set forth in Schedule 4.01(g), there
are no actions, suits or proceedings pending or, to the best of either
Borrower's knowledge, threatened against or affecting such Borrower or
any of its Significant Subsidiaries or the properties of such Borrower
or any of its Significant Subsidiaries before any Governmental Authority
or arbitrator which if determined adversely to such Borrower or any such
Significant Subsidiary would be reasonably likely to result in a
Material Adverse Effect.
(h) Compliance with Consents and Licenses. Every consent required
by either Borrower or any of its Significant Subsidiaries (including
those required under or pursuant to any Environmental Law) in connection
with the conduct of its business and the ownership, use, exploitation or
occupation of its property and assets has been obtained and is in full
force and effect and there has not been any default in the
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observance of the conditions and restrictions (if any) imposed in, or in
connection with, any of the same, except where the failure to obtain any
of the foregoing would not reasonably be expected to have a Material
Adverse Effect.
(i) Compliance with Environmental Law. Except as set forth in
Schedule 4.01(i), to the best of each Borrower's knowledge after due
investigation, (i) the properties of each Borrower and its Subsidiaries
do not contain and have not previously contained (at, under, or about
any such property) any Hazardous Substances or other contamination (A)
in amounts or concentrations that constitute or constituted a violation
of, or could give rise to liability under, any Environmental Laws, in
either case where such violation or liability could reasonably be
expected to result in a Material Adverse Effect, (B) which could
interfere with the continued operation of such property, or (C) which
could materially impair the fair market value thereof; and (ii) there
has been no transportation or disposal of Hazardous Substances from, nor
any release or threatened release of Hazardous Substances at or from,
any property of either Borrower or any of its Subsidiaries in violation
of or in any manner which could give rise to liability under any
Environmental Laws, where such violation or liability, individually or
in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.
(j) Governmental Regulation. None of Borrowers and their
Significant Subsidiaries is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940, the Interstate Commerce Act, any state
public utilities code or any other Governmental Rule limiting its
ability to incur Indebtedness.
(k) Employment Benefit Plans.
(i) Except as specifically disclosed to Agent and Lenders
in writing prior to the date of this Agreement: (A) each Plan is
in compliance in all material respects with the applicable
provisions of ERISA, the IRC and other Governmental Rules; (B)
there are no pending, or to the best knowledge of either
Borrower, threatened, claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan which has
resulted or could reasonably be expected to result in a Material
Adverse Effect; (C) there has been no prohibited transaction or
other violation of the fiduciary responsibility rule with respect
to any Plan which could reasonably result in a Material Adverse
Effect; (D) no ERISA Event has occurred or is reasonably expected
to occur with respect to any Pension Plan; (E) no Pension Plan
has any Unfunded Pension Liability; (F) neither Borrower has
incurred, nor does it reasonably expect to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of
ERISA); (G) no trade or business (whether or not incorporated
under common control with either Borrower within the meaning of
Section 414(b), (c), (m) or (a) of the IRC) maintains or
contributes to any Pension Plan or other Plan subject to Section
412 of the IRC; and (H) none of Borrowers and any entity under
common control with either Borrower in the preceding sentence has
ever contributed to any Multiemployer Plan.
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(ii) All employer and employee contributions required by
any applicable Governmental Rule in connection with all Foreign
Plans have been made, or, if applicable, accrued, in accordance
with the country-specific accounting practices. The fair market
value of the assets of each funded Foreign Plan, the liability of
each insurer for any Foreign Plan funded through insurance or the
book reserve established for any Foreign Plan, together with any
accrued contributions, is sufficient to procure or provide for
the accrued benefit obligations, as of the date hereof, with
respect to all current and former participants in such Foreign
Plan according to the actuarial assumptions and valuations most
recently used to determine employer contributions to such Foreign
Plan, which actuarial assumptions are commercially reasonable.
Each Foreign Plan required to be registered has been registered
and has been maintained in good standing with applicable
Governmental Authorities. Each Foreign Plan reasonably complies
in all material respects with all applicable Governmental Rules.
(l) Significant Subsidiaries. The name and ownership of each
Significant Subsidiary on the date of this Agreement is as set forth in
Schedule 4.01(l). All of the outstanding capital stock of, or any other
interest in, each such Significant Subsidiary has been validly issued,
and is fully paid and nonassessable.
(m) Margin Regulations. Neither Borrower is engaged in the
business of extending credit for the purpose of purchasing or carrying
"margin stock" (within the meaning of Regulation U of the FRB). No part
of the proceeds of the Loans will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing
or carrying any margin stock, except in compliance with said Regulation
U.
(n) Taxes. Borrowers and their Significant Subsidiaries have
filed all federal and other material tax returns and reports required to
be filed, and have paid all federal and other material taxes,
assessments, fees and other Governmental Charges levied or imposed upon
them or their properties, income or assets otherwise due and payable,
except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against either
Borrower or any of its Significant Subsidiaries that would, if made,
have a Material Adverse Effect.
(o) Patents and Other Rights. Each Borrower and each Significant
Subsidiary possesses all permits, franchises, licenses, patents,
trademarks, trade names, service marks, copyrights and all rights with
respect thereto, free from maintenance and operation of its business,
except where the failure to obtain any of the foregoing would not
reasonably be expected to have a Material Adverse Effect.
(p) Insurance. The properties of each Borrower and its
Significant Subsidiaries are insured against losses and damages of the
kinds and in amounts which are deemed prudent by such Borrower in its
reasonable business judgment and within the general parameters customary
among similarly situated businesses in the industry, and such insurance
is maintained with financially sound and reputable insurance companies
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or pursuant to a plan or plans of self-insurance to such extent as is
usual for companies of similar size engaged in the same or similar
businesses and owning similar properties.
(q) Financial Statements. The audited Financial Statements of LSI
and its Subsidiaries for the fiscal year ended December 31, 1997 and the
unaudited Financial Statements of LSI and its Subsidiaries for the
fiscal quarter ended March 31, 1998 are complete and correct and fairly
present the financial condition of LSI and its Subsidiaries as at such
dates and the results of operations of LSI and its Subsidiaries for the
periods covered by such statements, in each case in accordance with GAAP
consistently applied, subject, in the case of the March 31, 1998
Financial Statements, to normal year-end adjustments and the absence of
notes. Since December 31, 1997, there has been no Material Adverse
Effect.
(r) Liabilities. None of Borrowers and their Significant
Subsidiaries has any material liabilities, fixed or contingent, that are
not reflected in the Financial Statements referred to in Subparagraph
4.01(q), in the notes thereto or otherwise disclosed in writing to the
Agent and Lenders, other than liabilities arising in the ordinary course
of business since March 31, 1998.
(s) Labor Disputes. Etc. There are no strikes, lockouts or other
labor disputes against either Borrower or any of its Significant
Subsidiaries, or, to the best of either Borrower's knowledge, threatened
against or affecting either Borrower or any of its Significant
Subsidiaries, which may result in a Material Adverse Effect.
(t) Solvency. Each Borrower and its Subsidiaries on a
consolidated basis are Solvent.
(u) Year 2000 Compatibility. Borrowers and their Significant
Subsidiaries have reviewed the areas within their business and
operations which could be adversely affected by, and have developed or
are developing a program to address on a timely basis, the "Year 2000
Problem" (that is, the risk that computer applications used by Borrowers
and their Significant Subsidiaries may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior
to and any date on or after December 31, 1999), and have made related
appropriate inquiry of material suppliers and vendors. Based on such
review and program, each Borrower reasonably believes that the "Year
2000 Problem" will not have a Material Adverse Effect.
(v) Disclosure. None of the representations or warranties made by
either Borrower in the Credit Documents as of the date of such
representations and warranties, and none of the statements contained in
any exhibit, report, statement or certificate furnished by or on behalf
of either Borrower or any of its Significant Subsidiaries to Agent or
any Lender in connection with the Credit Documents, contains any untrue
statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in
light of the circumstances under which they are made, not misleading in
any material respect as of the time when made or delivered.
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4.02. Reaffirmation. Each Borrower shall be deemed to have reaffirmed,
for the benefit of Lenders and Agent, each representation and warranty contained
in Paragraph 4.01 on and as of the date of each Credit Event (except for
representations and warranties expressly made as of a specified date, which
shall be true as of such date).
SECTION V. COVENANTS.
5.01. Affirmative Covenants. Until the termination of this Agreement and
the satisfaction in full by each Borrower of all of their respective
Obligations, each Borrower will comply, and will cause compliance, with the
following affirmative covenants, unless Required Lenders shall otherwise consent
in writing:
(a) Financial Statements and Other Reports. LSI, on behalf of
Borrowers, will furnish to Agent in sufficient copies for distribution
to Lenders:
(i) As soon as available and in any event within fifty
(50) days after the end of each of the first three fiscal
quarters of each fiscal year, the consolidated Financial
Statements of LSI and its Subsidiaries for such fiscal quarter,
prepared in accordance with GAAP consistently applied, all in
reasonable detail;
(ii) As soon as available and in any event within one
hundred (100) days after the end of each fiscal year, the
consolidated Financial Statements of LSI and its Subsidiaries for
such fiscal year, prepared in accordance with GAAP consistently
applied, all in reasonable detail, and accompanied by a report
thereon of Ernst & Young LLP or another firm of independent
certified public accountants of recognized national standing,
which report shall be unqualified as to scope of audit or the
status of LSI and its Subsidiaries as a going concern;
(iii) Together with the Financial Statements required
pursuant to clauses (i) and (ii) of this Subparagraph 5.01(a), a
compliance certificate of a Responsible Officer of LSI (a
"Compliance Certificate") which (A) states that such Financial
Statements fairly present the financial condition of LSI and its
Subsidiaries as at the last day of the fiscal quarter or fiscal
year covered by such Financial Statements and the results of
operations of LSI and its Subsidiaries for such quarter or year
and have been prepared in accordance with GAAP consistently
applied, subject to normal, year-end audit adjustments in the
case of the Financial Statements for any fiscal quarter; (B)
states that no Default has occurred and is continuing, or, if any
such Default has occurred and is continuing, a statement as to
the nature thereof and what action LSI or LLJS proposes to take
with respect thereto; (C) sets forth, for the fiscal quarter or
fiscal year covered by such Financial Statements or as of the
last day of such quarter or year, the calculation of the
financial ratios and tests provided in Paragraph 5.03; and (D)
states that the Year 2000 remediation efforts of Borrowers and
their Subsidiaries are proceeding as scheduled;
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(iv) As soon as available and in any event within fifty
(50) days after the end of each fiscal quarter, a certificate of
a Responsible Officer of LSI which sets forth the calculation of
the Pricing Ratio as of the last day of such quarter;
(v) Promptly after the giving, sending or filing thereof,
copies of all reports, if any, which each Borrower or any of its
Subsidiaries sends generally to any class of holders of its
respective capital stock or other securities and of all reports
or filings, if any, by each Borrower or any of its Subsidiaries
with the SEC or any national securities exchange;
(vi) Promptly after either Borrower has knowledge or
becomes aware thereof, notice of the occurrence or existence of
any Default;
(vii) Prompt written notice of any action, event or
occurrence that could reasonably be expected to result in a
Material Adverse Effect due to environmental liability under
Environmental Laws;
(viii) Prompt written notice of all actions, suits and
proceedings before any Governmental Authority or arbitrator
pending, or to the best of either Borrower's knowledge,
threatened against or affecting either Borrower or any of its
Subsidiaries which (A) if adversely determined would involve an
aggregate liability of $25,000,000 or more in excess of amounts
covered by third-party insurance, or (B) otherwise may have a
Material Adverse Effect;
(ix) Promptly after either Borrower has knowledge or
becomes aware thereof, (A) notice of the occurrence of any ERISA
Event, together with a copy of any notice of such ERISA Event to
the PBGC, and (B) the details concerning any action taken or
proposed to be taken by the IRS, PBGC, Department of Labor or
other Person with respect thereto;
(x) Promptly upon the commencement or increase of
contributions to, the adoption of, or an amendment to, a Plan by
LSI or an ERISA Affiliate, if such commencement or increase of
contributions, adoption, or amendment could reasonably be
expected to result in a net increase in unfunded liability to LSI
or an ERISA Affiliate in excess of $10,000,000, a calculation of
the net increase in unfunded liability;
(xi) Promptly after filing or receipt thereof by LSI or
any ERISA Affiliate, copies of the following:
(A) Any notice received from the PBGC of intent to
terminate or have a trustee appointed to administer any
Pension Plan;
(B) Any notice received from the sponsor of a
Multiemployer Plan concerning the imposition, delinquent
payment, or amount of withdrawal liability;
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(C) Any demand by the PBGC under Subtitle D of
Title IV of ERISA; and
(D) Any notice received from the IRS regarding the
disqualification of a Plan intended to qualify under
Section 401(a) of the IRC;
(xii) Within forty-five (45) days of the date thereof, or,
if earlier, on the date of delivery of any Financial Statements
pursuant to clause (i) or (ii) of this Subparagraph 5.01(a),
notice of any change in accounting policies or financial
reporting practices by either Borrower or any of the Significant
Subsidiaries that is expected to affect (or has affected)
materially under U.S. GAAP the consolidated financial condition
of LSI and its Subsidiaries;
(xiii) Promptly after the occurrence thereof, notice of
any labor controversy resulting in or threatening to result in
any strike, work stoppage, boycott, shutdown or other material
labor disruption against or involving either Borrower or any of
its Subsidiaries which could result in a Material Adverse Effect;
(xiv) Upon the request from time to time of Agent or any
Lender (through Agent), the Swap Termination Values, together
with a description of the method by which such values were
determined, relating to any then-outstanding Rate Contracts to
which either Borrower or any of its Subsidiaries is party;
(xv) Prompt written notice of any change in either
Borrower's fiscal year;
(xvi) Prompt written notice of any Person or Subsidiary
not identified on Schedule 4.01(l) that becomes a Significant
Subsidiary after the date of this Agreement;
(xvii) Prompt written notice of any other condition or
event which has resulted, or that could reasonably be expected to
result, in a Material Adverse Effect;
(xviii) Prior written notice of any sale of assets other
than in the ordinary course of business (including any sale of
assets to be leased back in connection with a "synthetic" lease
of such assets) or any sale or issuance of Indebtedness for
borrowed money (including Indebtedness evidenced by notes, bonds,
debentures or other similar instruments) for Net Proceeds which
exceed $50,000,000 for any single transaction or series of
related transactions; and
(xix) Such other information respecting the operations,
properties, business or condition (financial or otherwise) of
either Borrower or the Significant Subsidiaries as Agent or any
Lender (through Agent) may from time to time reasonably request.
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Each notice pursuant to clauses (vi) - (xix) of this Subparagraph
5.01(a) shall be accompanied by a written statement by a Responsible
Officer of LSI setting forth details of the occurrence referred to
therein, and stating what action LSI or LLJS proposes to take with
respect thereto.
(b) Preservation of Corporate Existence. Etc. Each Borrower shall
and shall cause each of its Significant Subsidiaries to:
(i) Preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state
or jurisdiction of incorporation or formation, except in
connection with transactions permitted by Paragraph 5.02 and (B)
in the case of any Significant Subsidiary (other than LLJS) to
the extent that failure to obtain or maintain the foregoing would
not reasonably be expected to have a Material Adverse Effect;
(ii) Preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits,
licenses and franchises necessary or desirable in the normal
conduct of its business, except to the extent that the failure to
obtain or maintain the foregoing would not reasonably be expected
to have a Material Adverse Effect;
(iii) Use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill,
except in the case of any Significant Subsidiary (other than
LLJS) to the extent that the failure to obtain or maintain the
foregoing would not reasonably be expected to have a Material
Adverse Effect; and
(iv) Preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation
of which could reasonably be expected to have a Material Adverse
Effect.
(c) Payment of Taxes. Etc. Each Borrower will, and will cause
each of its Significant Subsidiaries to, pay and discharge all taxes,
fees, assessments, levies and other Governmental Charges imposed upon it
or upon its properties or assets prior to the date on which penalties
attach thereto, and all lawful claims for labor, materials and supplies
which, if unpaid, might become a Lien upon any properties or assets of
such Borrower or any of its Significant Subsidiaries, except to the
extent such taxes, fees, assessments, levies or other Governmental
Charges, or such claims, are being contested in good faith by
appropriate proceedings and are adequately reserved against in
accordance with GAAP.
(d) Licenses. Each Borrower will, and will cause each of its
Significant Subsidiaries to, obtain and maintain all licenses,
authorizations, consents, filings, exemptions, registrations and other
governmental approvals necessary in connection with the execution,
delivery and performance of the Credit Documents, the consummation of
the transactions therein contemplated or the operation and conduct of
its business and
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ownership of its properties, except to the extent that the failure to
obtain or maintain the foregoing would not reasonably be expected to
have a Material Adverse Effect.
(e) Maintenance of Property. Except as otherwise permitted under
Subparagraph 5.02(c) or Subparagraph 5.02(d), each Borrower shall, and
shall cause each of its Subsidiaries to, maintain and preserve all its
property which is used in its business in good working order and
condition, ordinary wear and tear excepted.
(f) Insurance. Each Borrower shall maintain, and shall cause each
of its Significant Subsidiaries to maintain, with financially sound and
reputable independent insurers, insurance with respect to its properties
and business against losses and damages of the kinds and in amounts
which are deemed prudent by such Borrower in its reasonable business
judgment and within the general parameters customary among similarly
situated businesses in the industry.
(g) Payment of Indebtedness. Each Borrower shall, and shall cause
each of its Significant Subsidiaries to, pay and discharge as the same
shall become due and payable, all Indebtedness as and when due and
payable or within any grace periods applicable thereto, but subject to
any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.
(h) Compliance with Laws. Each Borrower shall comply, and shall
cause each of its Significant Subsidiaries to comply, in all material
respects with the requirements of all Environmental Laws and all other
Governmental Rules applicable to it or its business.
(i) Employment Benefit Plans.
(i) LSI shall, and shall cause each of its ERISA
Affiliates to: (A) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the
IRC and other federal or state law; (B) cause each Plan which is
qualified under Section 401(a) of the IRC to maintain such
qualification; and (C) make all required contributions to any
Plan subject to Section 412 of the IRC.
(ii) None of Borrowers and their Significant Subsidiaries
shall (A) engage in any transaction prohibited by any
Governmental Rule applicable to any Foreign Plan, (B) fail to
make full payment when due of all amounts due as contributions to
any Foreign Plan or (C) otherwise fail to comply with the
requirements of any Governmental Rule applicable to any Foreign
Plan, where singly or cumulatively, the above would be reasonably
likely to have a Material Adverse Effect.
(j) Inspection of Property and Books and Records. Each Borrower
shall maintain and shall cause each of its Significant Subsidiaries to
maintain proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied shall be
made of all financial transactions and matters involving the assets and
business of such Borrower or such Significant Subsidiary. Each Borrower
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shall permit, and shall cause each of its Significant Subsidiaries to
permit, representatives and independent contractors of Agent or any
Lender to visit and inspect any of their respective properties, to
examine its respective corporate, financial and operating records, and
make copies thereof or abstracts therefrom, and to discuss its
respective affairs, finances and accounts with its respective directors,
officers, and independent public accountants, all at the expense of such
Borrower and at such reasonable times during normal business hours and
as often as may be reasonably desired, upon reasonable advance notice to
such Borrower; provided, however, that (i) unless an Event of Default
shall have occurred and be continuing, (A) Borrowers shall be
responsible under this Subparagraph 5.01(j) for the reasonable costs and
expenses of Agent only, (B) all inspections, visits, examinations and
other actions permitted or authorized hereunder shall be coordinated
only through Borrowers, and (C) physical inspections of either
Borrower's or any such Significant Subsidiary's facilities in Japan
shall be made on two weeks' prior notice and shall occur no more
frequently than semiannually in the case of inspections by Agent and no
more frequently than annually otherwise, and (ii) when an Event of
Default exists Agent or any Lender may make any visit, inspection or
examination or take any other action authorized hereunder at the expense
of Borrowers at any time during normal business hours, without advance
notice and without being subject to any of the other restrictions
described in clause (i).
(k) Use of Proceeds. Except as otherwise expressly provided in
Subparagraph 2.01(h) or Subparagraph 2.02(f), each Borrower will use the
proceeds of the Loans solely for general corporate purposes, including
for working capital, capital expenditures, Permitted Investments and
Permitted Acquisitions. If either Borrower uses the proceeds of the
Loans to purchase or carry "margin stock" (within the meaning of
Regulation U of the FRB) or extend credit to others for the purpose of
purchasing or carrying margin stock, such Borrower will do so only in
compliance with said Regulation U and only if not more than twenty
percent (20%) of the value of the assets of such Borrower and its
Subsidiaries on a consolidated basis consists of margin stock.
(l) Further Assurances and Additional Acts. Each Borrower will
execute, acknowledge, deliver, file, notarize and register at its own
expense all such further agreements, instruments, certificates,
documents and assurances and perform such acts as Agent or Required
Lenders shall deem necessary or appropriate to effectuate the purposes
of the Credit Documents, and promptly provide Agent with evidence of the
foregoing satisfactory in form and substance to Agent or Required
Lenders.
(m) Year 2000 Compatibility. Each of Borrower and its Significant
Subsidiaries shall take all acts reasonably necessary to ensure that all
software, hardware, firmware, equipment, goods and systems utilized by
or material to its business operations or financial condition will
properly perform date sensitive functions before, during and after the
year 2000. At the request of Agent, each Borrower shall provide to Agent
such reasonable certifications or other evidence of compliance with this
Subparagraph 5.01(m) as Agent may from time to time reasonably require.
5.02. Negative Covenants. Until the termination of this Agreement and
the satisfaction in full by each Borrower of all of their respective
Obligations, each Borrower will comply, and
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will cause compliance, with the following negative covenants, unless Required
Lenders shall otherwise consent in writing:
(a) Liens. Neither Borrowers nor any of its Significant
Subsidiaries will create, incur, assume or suffer to exist any Lien upon
or with respect to any of their properties, revenues or assets, whether
now owned or hereafter acquired, other than (i) Permitted Liens and (ii)
other Liens that, in the aggregate at any time, secure obligations in an
amount not in excess of ten percent (10%) of Consolidated Total Assets
determined as of the last day of the immediately preceding fiscal
quarter (or fiscal year, as the case may be).
(b) Change in Nature of Business. None of Borrowers and their
Significant Subsidiaries will engage in any material line of business
other than the electronics business and other businesses incidental or
reasonably related thereto.
(c) Restrictions on Fundamental Changes. None of Borrowers and
their Significant Subsidiaries will merge with or consolidate into, or
acquire all or substantially all of the assets of, any Person, or sell,
transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets,
except that:
(i) Any of LSI's Significant Subsidiaries may merge with,
consolidate into or transfer all or substantially all of its
assets to another of LSI's Significant Subsidiaries or to LSI and
in connection therewith such Significant Subsidiary (other than
LSI) may be liquidated or dissolved, provided that (A) if the
transaction involves either Borrower, such Borrower shall be the
surviving Person, and (B) if any transaction shall be between a
non-wholly owned Significant Subsidiary and a wholly owned
Significant Subsidiary, the wholly owned Significant Subsidiary
shall be the continuing or surviving Person, and provided further
that no Material Adverse Effect or Default shall result
therefrom;
(ii) Either Borrower or any of its Significant
Subsidiaries may sell or dispose of assets in accordance with the
provisions of Subparagraph 5.02(d);
(iii) Either Borrower or any of its Significant
Subsidiaries may make any investment permitted by Subparagraph
5.02(e); and
(iv) Either Borrower may merge with or consolidate into
any other Person pursuant to an Acquisition permitted by
Subparagraph 5.02(e), provided that (A) such Borrower is the
surviving Person, (B) no such merger or consolidation shall be
made while there exists a Default or if a Default or Material
Adverse Effect would occur as a result thereof, and (C) such
Borrower shall have complied with the notice and other
requirements of Subparagraph 5.02(e) with respect to any
Acquisition.
(d) Sales of Assets. None of Borrowers and their Significant
Subsidiaries will convey, sell, lease, transfer, or otherwise dispose
of, or part with control of (whether in
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one transaction or a series of transactions) any assets (including any
shares of stock in any Subsidiary or other Person), except:
(i) Sales or other dispositions of inventory in the
ordinary course of business;
(ii) Sales or other dispositions of assets in the ordinary
course of business which have become worn out or obsolete or
which are promptly being replaced;
(iii) Sales of accounts receivable to financial
institutions not affiliated with either Borrower; provided that
(A) the discount rate shall not at any time exceed ten percent
(10%), (B) the amount of all accounts receivable permitted to be
sold in any fiscal quarter shall not exceed twenty percent (20%)
of the consolidated accounts receivable of LSI and its
Subsidiaries, determined as of the last day of the immediately
preceding fiscal quarter (or fiscal year, as the case may be),
and (C) the sole consideration received for such sales shall be
cash;
(iv) Sales of equipment to be leased back to LSI in
conjunction with a "synthetic" lease financing of such equipment,
provided that the "principal" amount of such financing does not
exceed $250,000,000;
(v) Sales or other dispositions of assets outside the
ordinary course of business which do not constitute Substantial
Assets (as defined below);
(vi) Sales of assets which yield Net Proceeds which are
applied to prepay the U.S. Loans pursuant to clause (iv) of
Subparagraph 2.05(c); and
(vii) Sales or other dispositions of Permitted
Investments.
For purposes of clause (v) above, a sale, lease, transfer or other
disposition of assets shall be deemed to be of "Substantial Assets" if
such assets, when added to all other assets conveyed, sold, leased,
transferred or otherwise disposed of by LSI and its Subsidiaries in any
period of four consecutive fiscal quarters (other than assets sold in
the ordinary course of business or pursuant to clause (iii) above),
shall exceed ten percent (10%) of Consolidated Total Assets as
determined as of the last day of the fiscal quarter of LSI immediately
preceding the date of determination.
(e) Loans and Investments. None of Borrowers and their
Significant Subsidiaries will enter into any Acquisition or otherwise
extend any credit to, guarantee the obligations of or make any
additional investments in or acquire any interest in, any Person, other
than in connection with:
(i) Extensions of credit in the nature of accounts
receivable or notes receivable arising from the sales of goods or
services in the ordinary course of business;
(ii) Permitted Investments;
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(iii) Additional purchases of or investments in the stock
of, or guarantees of the obligations of, Subsidiaries;
(iv) Permitted Acquisitions;
(v) Employee loans and guarantees in accordance with LSI's
usual and customary practices with respect thereto; or
(vi) Additional investments not exceeding, in the
aggregate with all such investments and all Acquisitions,
$300,000,000 during the period from the date of this Agreement
through the Revolving Termination Date;
Provided that in the case of an Acquisition or an investment referred to
in clause (vi) above, (A) no such Acquisition or investment shall be
made while there exists a Default or if a Default or Material Adverse
Effect would occur as a result thereof, and (B) the acquired or other
Person in which any such Acquisition or investment is made shall be in
the electronics business or other business incidental or reasonably
related thereto.
(f) Distributions. Neither Borrower will declare or pay any
dividends in respect of its capital stock, or purchase, redeem, retire
or otherwise acquire for value any of its capital stock now or hereafter
outstanding, return any capital to its shareholders as such, or make any
distribution of assets to its shareholders as such, or permit any of its
Subsidiaries to purchase, redeem, retire, or otherwise acquire for value
any stock of either Borrower, except that LLJS may declare and pay
dividends and distributions to LSI and either Borrower may:
(i) Declare and deliver dividends and distributions
payable only in common stock of such Borrower;
(ii) Purchase shares of its capital stock from time to
time in connection with the issuance of shares under such
Borrower's employee stock option plans;
(iii) Purchase, redeem, retire, or otherwise acquire
shares of its capital stock with the proceeds received from a
substantially concurrent issue of new shares of its capital
stock; and
(iv) In addition to the dividends, purchases, redemptions,
retirements and other acquisitions permitted by the foregoing
clauses (i) through (iii) above, declare and deliver dividends
and distributions, and purchase, redeem, retire, or otherwise
acquire shares of its capital stock, in an aggregate amount not
exceeding $100,000,000 in any period of four consecutive fiscal
quarters.
(g) Transactions with Related Parties. None of Borrowers and
their Significant Subsidiaries will enter into any transaction,
including the purchase, sale or exchange of property or the rendering of
any services, with any Affiliate, any officer or director thereof or any
Person which beneficially owns or holds twenty percent (20%) or more of
the equity securities, or twenty percent (20%) or more of the equity
interest, thereof (a "Related Party"), or enter into, assume or suffer
to exist, or permit any such
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Significant Subsidiary to enter into, assume or suffer to exist, any
employment or consulting contract with any Related Party, except (i) a
transaction or contract which is in the ordinary course of such
Borrower's or Significant Subsidiary's business, including a transaction
in the ordinary course of business between or among such Borrower and
one or more of its Subsidiaries, and (ii) any other transaction which is
upon fair and reasonable terms not less favorable to such Borrower or
Significant Subsidiary than it would obtain in a comparable arm's length
transaction with a Person not a Related Party. For purposes of this
Subparagraph 5.02(g), the sale, transfer or disposition of more than
thirty percent (30%) of its assets (in any transaction or a series of
related transactions) by a Borrower or any of its Significant
Subsidiaries shall be deemed to be outside the ordinary course of
business.
(h) Accounting Changes. None of Borrowers and their Significant
Subsidiaries will make any significant change in accounting treatment or
reporting practices, except as required or permitted by GAAP (or, in the
case of any such Significant Subsidiary domiciled in a jurisdiction
other than the United States, in accordance with generally accepted
accounting principles and practices in such jurisdiction).
5.03. Financial Covenants. Until the termination of this Agreement and
the satisfaction in full by each Borrower of all of their respective
Obligations, LSI will comply, and will cause compliance, with the following
financial covenants, unless Required Lenders shall otherwise consent in writing:
(a) Senior Debt to Total Capital. LSI will maintain a ratio of
Senior Debt to Total Capital as of each date set forth below that is not
more than the ratio set forth opposite such date:
September 30, 1998 0.40 to 1.00;
December 31, 1998 0.40 to 1.00;
March 31, 1999 0.40 to 1.00;
June 30, 1999 0.40 to 1.00;
The last day of each
quarter thereafter 0.35 to 1.00.
(b) Quick Ratio. Commencing with the fiscal quarter ending
December 31, 1998, LSI will maintain a ratio of Consolidated Quick
Assets to Consolidated Current Liabilities as of each date set forth
below that is not less than the ratio set forth opposite such date:
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December 31, 1998 0.70 to 1.00;
March 31, 1999 0.75 to 1.00;
June 30, 1999 0.80 to 1.00;
September 30, 1999 0.85 to 1.00;
December 31, 1999 0.90 to 1.00;
The last day of each
quarter thereafter 1.00 to 1.00;
Provided, however, that, if LSI sells assets other than in the ordinary
course of business for Net Proceeds which exceed $125,000,000 on or
prior to June 30, 1999, LSI will maintain a ratio of Consolidated Quick
Assets to Consolidated Current Liabilities that is not less than 1.00 to
1.00 on the last day of the fiscal quarter in which such sale occurs and
on the last day of each fiscal quarter thereafter.
(c) Minimum Consolidated Tangible Net Worth. LSI will maintain a
Consolidated Tangible Net Worth (exclusive of the cumulative translation
adjustment account as reported in the consolidated balance sheet of LSI
and its Subsidiaries as of such date) as of the end of each fiscal
quarter of not less than (i) $1,050,000,000 plus (ii) one hundred
percent (100%) of the Net Proceeds received by LSI or any of its
Subsidiaries from the sale or issuance of equity securities (including
equity securities issued upon the conversion of Subordinated Debt) to
any Person other than LSI or any of its Subsidiaries after June 30,
1998, plus (iii) eighty percent (80%) of the sum of Consolidated Net
Income plus the charges described below in clauses (iv) and (vi) to the
extent deducted in determining Consolidated Net Income, if such sum is
positive, for each fiscal quarter elapsed after June 30, 1998, minus
(iv) one hundred percent (100%) of preproduction engineering charges not
exceeding $135,000,000 taken by LSI during 1999 as a result of the
Financial Accounting Standards Executive Committee Statement of Position
regarding capitalization of preproduction charges, minus (v) the net
value of LSI stock not exceeding $250,000,000 in aggregate amount
repurchased by LSI pursuant to employee stock ownership and purchase
plans (provided that LSI shall not so repurchase stock in an aggregate
amount which exceeds five percent (5%) of its stock outstanding as of
the last day of such fiscal quarter), minus (vi) the aggregate amount of
asset write-downs not exceeding $100,000,000 taken by LSI during the
quarter ending September 30, 1998.
(d) Debt Service Coverage Ratio. LSI will maintain a ratio of:
(i) Consolidated EBITDA, plus, to the extent deducted in
calculating such Consolidated EBITDA, the sum of (A)
preproduction engineering charges not exceeding $135,000,000
taken by LSI during 1999 as a result of the Financial Accounting
Standards Executive Committee Statement of Position regarding
capitalization of preproduction
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charges, plus (B) the aggregate amount of asset write-downs not
exceeding $100,000,000 taken by LSI during the quarter ending
September 30, 1998;
to
(ii) The sum of Consolidated CMLTD, plus Consolidated
Interest Expense, plus Capitalized Interest;
for each period of four consecutive fiscal quarters ending as of the
date set forth below, calculated as of the end of such period, that is
not less than the ratio set forth opposite such date:
September 30, 1998 1.50 to 1.00;
December 31, 1998 1.50 to 1.00;
March 31, 1999 1.50 to 1.00;
June 30, 1999 1.50 to 1.00;
The last day of each
quarter thereafter 2.00 to 1.00.
(e) Subordinated Debt. LSI will not permit Subordinated Debt of
LSI and its consolidated Subsidiaries to exceed $750,000,000 at any
time; and LSI will not, and will not permit any of its Subsidiaries to,
make any voluntary or optional payment or repayment on, redemption,
exchange or acquisition for value of, or any sinking fund or similar
payment with respect to, any Subordinated Debt if a Default shall then
exist or would occur as a result thereof.
SECTION VI. DEFAULT.
6.01. Events of Default. The occurrence or existence of any one or more
of the following shall constitute an "Event of Default" hereunder:
(a) Non-Payment. Either Borrower shall (i) fail to pay when due
any principal of any Loan or fail to make any payment or transfer when
due under any Lender Rate Contract or (ii) fail to pay within five (5)
Business Days after the same becomes due any interest, fee or other
payment required under the terms of this Agreement or any of the other
Credit Documents; or
(b) Specific Defaults. Either Borrower or any of its Significant
Subsidiaries shall fail to observe or perform any covenant, obligation,
condition or agreement set forth in Paragraph 5.02 or Paragraph 5.03; or
(c) Other Defaults. Either Borrower or any of its Significant
Subsidiaries shall fail to observe or perform any other covenant,
obligation, condition or agreement contained in this Agreement or the
other Credit Documents and such failure shall continue for thirty (30)
days after the earlier of (i) either Borrower's written acknowledgement
of such failure and (ii) Agent's or any Lender's written notice to
Borrowers of such failure; or
(d) Representations and Warranties. Any representation, warranty,
certificate, information or other statement (financial or otherwise)
made or furnished by or on behalf of either Borrower to Agent or any
Lender in or in connection with this Agreement or any of the other
Credit Documents, or as an inducement to Agent or any Lender to enter
into this Agreement, shall be false, incorrect, incomplete or misleading
in any material respect when made (or deemed made) or furnished; or
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(e) Cross-Default. (i) Either Borrower or any of its Significant
Subsidiaries shall fail to make any payment on account of any
Indebtedness of such Person (other than the Obligations) when due
(whether at scheduled maturity, by required prepayment, upon
acceleration or otherwise) and such failure shall continue beyond any
period of grace provided with respect thereto, if the aggregate amount
of such Indebtedness exceeds $10,000,000 or the effect of such failure
is to cause, or permit the holder or holders thereof to cause,
Indebtedness of either Borrower or any of its Significant Subsidiaries
(other than the Obligations) in an aggregate amount exceeding
$10,000,000 to become due (whether at scheduled maturity, by required
prepayment, upon acceleration or otherwise) or (ii) either Borrower or
any of its Significant Subsidiaries shall otherwise fail to observe or
perform any agreement, term or condition contained in any agreement or
instrument relating to any Indebtedness of such Person (other than the
Obligations), or any other event shall occur or condition shall exist,
and such failure, event or condition shall continue beyond any period of
grace provided with respect thereto, if the effect of such failure,
event or condition is to cause, or permit the holder or holders thereof
to cause, Indebtedness of either Borrower or any of its Significant
Subsidiaries (other than the Obligations) in an aggregate amount
exceeding $10,000,000 to become due (and/or to be secured by cash
collateral); or
(f) Insolvency, Voluntary Proceedings. Either Borrower or any of
its Significant Subsidiaries shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian of itself or
of all or a substantial part of its property, (ii) be unable, or admit
in writing its inability, to pay its debts generally as they mature,
(iii) make a general assignment for the benefit of its or any of its
creditors, (iv) be dissolved or liquidated in full or in part, (v)
become insolvent (as such term may be defined or interpreted under any
applicable statute), (vi) commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or consent to any such relief or to the
appointment of or taking possession of its property by any official in
an involuntary case or other proceeding commenced against it, or (vi)
take any action for the purpose of effecting any of the foregoing; or
(g) Involuntary Proceedings. Proceedings for the appointment of a
receiver, trustee, liquidator or custodian of either Borrower or any of
its Significant Subsidiaries or of all or a substantial part of the
property thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to either
Borrower or any of its Significant Subsidiaries or the debts thereof
under any bankruptcy, insolvency or other similar law now or hereafter
in effect shall be commenced and an order for relief entered or such
proceeding shall not be dismissed or discharged within sixty (60) days
of commencement; or
(h) Judgments. (i) A final nonappealable judgment or order for
the payment of money against either Borrower or any of its Significant
Subsidiaries in an amount of $25,000,000 or more in excess of amounts
covered by third-party insurance shall remain unpaid for ninety (90)
days following the due date for such payment; or (ii) any non-monetary
judgment or order shall be rendered against either Borrower or any of
its Significant Subsidiaries which has or would reasonably be expected
to have a Material
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Adverse Effect; or
(i) Process Issued. A warrant of attachment, execution,
distraint, or similar process against any substantial part of the assets
of either Borrower or any of its Significant Subsidiaries is issued
which remains undismissed or undischarged for a period of thirty (30)
days, if as a result thereof there is reasonably expected to occur a
Material Adverse Effect; or
(j) Seizure. All or a material part of the undertaking, assets,
rights or revenues of either Borrower or any of its Significant
Subsidiaries are seized, nationalized, expropriated or compulsorily
acquired by or under the authority of any Governmental Authority; or
(k) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan which has resulted or could reasonably be expected to
result in liability of either Borrower or any of its Subsidiaries under
Title IV of ERISA to the Pension Plan or PBGC in an aggregate amount in
excess of $10,000,000; (ii) the commencement or increase of
contributions to, or the adoption of or the amendment of a Pension Plan
by either Borrower or any of its Subsidiaries which has resulted or
could reasonably be expected to result in an increase in Unfunded
Pension Liability among all Pension Plans in an aggregate amount in
excess of $10,000,000; or (iii) any of the representations and
warranties contained in Subparagraph 4.01(k) shall cease to be true and
correct which, individually or in combination, has resulted or could
reasonably be expected to result in a Material Adverse Effect; or
(l) Credit Documents. Any Credit Document or any material term
thereof shall cease to be, or be asserted by either Borrower or any of
its Significant Subsidiaries not to be, a legal, valid and binding
obligation of such Borrower or such Significant Subsidiary enforceable
in accordance with its terms; or
(m) Dissolution. Etc. Either Borrower or any of its Significant
Subsidiaries shall (i) liquidate, wind up or dissolve (or suffer any
liquidation, wind-up or dissolution), except to the extent expressly
permitted by clause (i) of Subparagraph 5.02(c), (ii) suspend its
operations other than in the ordinary course of business, or (iii) take
any corporate action to authorize any of the actions or events set forth
above in this Subparagraph; or
(n) Change of Control. Any Change of Control shall occur; or
(o) Material Adverse Effect. Any event(s) or condition(s) which
is (are) reasonably likely to have a Material Adverse Effect shall occur
or exist.
6.02. Remedies. At any time after the occurrence and during the
continuance of any Event of Default (other than an Event of Default referred to
in Subparagraph 6.01(f) or 6.01(g) or any Event of Default which has been cured
by LSI under the LSI Guaranty), Agent may, with the consent of the Required
Lenders, or shall, upon instructions from the Required Lenders, by written
notice to Borrowers, (a) terminate the Commitments and the obligations of
Lenders to make Loans and/or (b) declare all outstanding Obligations payable by
Borrowers to be
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immediately due and payable without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived, anything contained
herein or in the Notes to the contrary notwithstanding. Upon the occurrence or
existence of any Event of Default described in Subparagraph 6.01(f) or 6.01(g),
immediately and without notice, (1) the Commitments and the obligations of
Lenders to make Loans shall automatically terminate and (2) all outstanding
Obligations payable by Borrowers hereunder shall automatically become
immediately due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived, anything contained
herein or in the Notes to the contrary notwithstanding. In addition to the
foregoing remedies, upon the occurrence or existence of any Event of Default,
Agent may exercise any other right, power or remedy available to it under any of
the Credit Documents or otherwise by law, either by suit in equity or by action
at law, or both.
6.03. Lender Rate Contract Remedies. Notwithstanding any other provision
of this Section VI, each Lender or its Affiliate which has entered into a Lender
Rate Contract shall have the right, with prior notice to Agent, but without the
approval or consent of Agent or any other Lender, (a) to declare an event of
default, termination event or other similar event thereunder which will result
in the early termination of such Lender Rate Contract, (b) to determine Swap
Termination Values in accordance with the terms of such Lender Rate Contract and
to set-off amounts between Lender Rate Contracts of such Lender, and (c) to
prosecute any legal action against either Borrower or its Subsidiaries to
enforce Swap Termination Values owing to such Lender or its Affiliate under such
Lender Rate Contracts.
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SECTION VII. THE AGENT AND RELATIONS AMONG LENDERS.
7.01. Appointment, Powers and Immunities. Each Lender hereby appoints
and authorizes Agent to act as its agent hereunder and under the other Credit
Documents with such powers as are expressly delegated to Agent by the terms of
this Agreement and the other Credit Documents, together with such other powers
as are reasonably incidental thereto. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in any
other Credit Document, be a trustee for any Lender or have any fiduciary duty to
any Lender. Notwithstanding anything to the contrary contained herein Agent
shall not be required to take any action which is contrary to this Agreement or
any other Credit Document or any applicable Governmental Rule. Neither Agent nor
any Lender shall be responsible to any other Lender for any recitals,
statements, representations or warranties made by either Borrower or any of its
Subsidiaries contained in this Agreement or in any other Credit Document, for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any other Credit Document or for any failure by either
Borrower or any of its Subsidiaries to perform its respective obligations
hereunder or thereunder. Agent may employ agents and attorneys-in-fact and shall
not be responsible to any Lender for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it with reasonable care. Neither Agent
nor any of its directors, officers, employees, agents or advisors shall be
responsible to any Lender for any action taken or omitted to be taken by it or
them hereunder or under any other Credit Document or in connection herewith or
therewith, except for its or their own gross negligence or willful misconduct.
Except as otherwise provided under this Agreement, Agent shall take such action
with respect to the Credit Documents as shall be directed by the Required
Lenders.
7.02. Reliance by Agent. Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, facsimile
or telex) believed by it in good faith to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Agent with reasonable care. As to any other matters not
expressly provided for by this Agreement, Agent shall not be required to take
any action or exercise any discretion, but shall be required to act or to
refrain from acting upon instructions of the Required Lenders and shall in all
cases be fully protected by Lenders in acting, or in refraining from acting,
hereunder or under any other Credit Document in accordance with the instructions
of the Required Lenders, and such instructions of the Required Lenders and any
action taken or failure to act pursuant thereto shall be binding on all of
Lenders.
7.03. Defaults. Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default unless Agent has received a written notice from a
Lender or either Borrower, referring to this Agreement, describing such Default
and stating that such notice is a "Notice of Default". If Agent receives such a
notice of the occurrence of a Default, Agent shall give prompt notice thereof to
Lenders. Agent shall take such action with respect to such Default as shall be
reasonably directed by the Required Lenders; provided, however, that until Agent
shall have received such directions, Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interest of Lenders.
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7.04. Indemnification. Without limiting the Obligations of Borrowers
hereunder, each Lender agrees to indemnify Agent, ratably in accordance with
their Proportionate Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against Agent in any way relating to or arising out of this
Agreement or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof; provided, however, that no Lender shall be liable for
any of the foregoing to the extent they arise from Agent's gross negligence or
willful misconduct. Agent shall be fully justified in refusing to take or in
continuing to take any action hereunder unless it shall first be indemnified to
its satisfaction by Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
obligations of each Lender under this Paragraph 7.04 shall survive the payment
and performance of the Obligations, the termination of this Agreement and any
Lender ceasing to be a party to this Agreement (with respect to events which
occurred prior to the time such Lender ceased to be a Lender hereunder).
7.05. Non-Reliance. Each Lender represents that it has, independently
and without reliance on Agent, or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of the
business, prospects, management, financial condition and affairs of Borrowers
and their Subsidiaries and its own decision to enter into this Agreement and
agrees that it will, independently and without reliance upon Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own appraisals and decisions in taking or not
taking action under this Agreement. Neither Agent nor any of its affiliates nor
any of their respective directors, officers, employees, agents or advisors shall
(a) be required to keep any Lender informed as to the performance or observance
by either Borrower or any of its Subsidiaries of the obligations under this
Agreement or any other document referred to or provided for herein or to make
inquiry of, or to inspect the properties or books of either Borrower or any of
its Subsidiaries; (b) have any duty or responsibility to provide any Lender with
any credit or other information concerning either Borrower or any of its
Subsidiaries which may come into the possession of Agent, except for notices,
reports and other documents and information expressly required to be furnished
to Lenders by Agent hereunder; or (c) be responsible to any Lender for (i) any
recital, statement, representation or warranty made by either Borrower or any
officer, employee or agent of either Borrower in this Agreement or in any of the
other Credit Documents, (ii) the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any Credit Document, (iii)
the value or sufficiency of any collateral or the validity or perfection of any
of the liens or security interests intended to be created by the Credit
Documents, or (iv) any failure by either Borrower to perform its obligations
under this Agreement or any other Credit Document.
7.06. Resignation or Removal of Agent. Agent may resign at any time by
giving thirty (30) days prior written notice thereof to Borrowers and Lenders,
and Agent may be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Agent, which Agent, if not a Lender, shall be
reasonably acceptable to Borrowers; provided, however, that Borrowers shall have
no right to approve a successor Agent if a Default has occurred and is
continuing. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent
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shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from the duties and obligations thereafter arising hereunder. After
any retiring Agent's resignation or removal hereunder as Agent, the provisions
of this Section VII shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
7.07. Agent in its Individual Capacity. Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of banking
or other business with Borrowers and their Subsidiaries and affiliates as though
Agent were not Agent hereunder. With respect to Loans, if any, made by Agent in
its capacity as a Lender, Agent in its capacity as a Lender shall have the same
rights and powers under this Agreement and the other Credit Documents as any
other Lender and may exercise the same as though it were not Agent, and the
terms "Lender" or "Lenders" shall include Agent in its capacity as a Lender.
SECTION VIII. MISCELLANEOUS.
8.01. Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
either Borrower, any Lender or Agent under this Agreement or the other Credit
Documents shall be in writing and faxed, mailed or delivered, if to either
Borrower or Agent, at its respective facsimile number or address set forth below
or, if to any Lender, at the address or facsimile number specified for such
Lender in Part B of Schedule I (or to such other facsimile number or address for
any party as indicated in any notice given by that party to the other parties).
All such notices and communications shall be effective (a) when sent by an
overnight courier service of recognized standing, on the second Business Day
following the deposit with such service; (b) when mailed, first class postage
prepaid and addressed as aforesaid through the United States Postal Service or
registered mail through the Japanese Post Office, upon receipt; (c) when
delivered by hand, upon delivery; and (d) when faxed, upon confirmation of
receipt; provided, however, that any notice delivered to Agent under Section II
shall not be effective until received by Agent.
Agent: For notices related to any Japanese Borrowing:
ABN AMRO Bank N.V.
Tokyo Branch
13F, Shiroyama JT Mori Building
4-3-1, Toranomon, Minato-ku
Tokyo 105
Japan
Attn: Kiyoharu Michiwaki or Takamasa Marito
Tel. No: 81-3-5405-6575 or 6565
Fax No: 81-3-5405-6902 or 6903
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For notices related to any U.S. Borrowing, all
other notices and copies of notices related to the
Japanese Borrowing:
ABN AMRO Bank N.V.
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
U.S.A.
Attn: Linda Boardman
Tel. No: (212) 314-1724
Fax. No: (212) 314-1712
With a copy in each case to:
ABN AMRO Bank N.V.
101 California Street, Suite 4550
San Francisco, CA 94111-5812
Attn: Thomas R. Wagner
Tel: (415) 984-3734
Fax: (415) 362-3524
LSI: LSI Logic Corporation
1551 McCarthy Boulevard
Milpitas, CA 95035
Attn: Mark R. Kent, Treasurer
Mail Stop D106
Tel: (408) 433-7189
Fax: (408) 433-6896
LLJS: LSI Logic Japan Semiconductor, Inc.
10, Kitahara
Tsukuba-shi
Ibaraki, Japan
Attn: Makoto Kaneda
Tel: (81) ###-##-####
Fax: (81) ###-##-####
with a copy to LSI as provided above.
Each Notice of U.S. Borrowing, Notice of U.S. Borrowing Conversion and Notice of
U.S. Borrowing Interest Period Selection shall be given by LSI to Agent's New
York office located at the address referred to above during such office's normal
business hours; provided, however, that any such notice received by Agent after
11:00 a.m. (New York time) on any Business Day shall be deemed received by Agent
on the next Business Day. Each Notice of Japanese Borrowing and Notice of
Japanese Borrowing Interest Period Selection shall be given by LLJS to Agent's
Tokyo office at the address referred to above during such office's normal
business hours;
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provided, however, that any such notice received by Agent after 10:00 a.m.
(Tokyo time) on any Business Day shall be deemed received by Agent on the next
Business Day. In any case where this Agreement authorizes notices, requests,
demands or other communications by Borrowers to Agent or any Lender to be made
by telephone or facsimile, Agent or any Lender may conclusively presume that
anyone purporting to be a Person designated in any incumbency certificate or
other similar document received by Agent or a Lender is such a Person.
8.02. Expenses. LSI agrees to pay promptly upon receipt of an invoice
therefor, whether or not any Loan is made hereunder, (a) all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by Agent
in connection with the syndication of the credit facilities provided hereunder,
the preparation, negotiation, execution and delivery of, and the exercise of its
duties under, this Agreement and the other Credit Documents, and the
preparation, negotiation, execution and delivery of amendments and waivers
hereunder and thereunder and (b) all reasonable fees and expenses, including
reasonable attorneys' fees and expenses, incurred by Agent and Lenders in the
enforcement or attempted enforcement of any of the Obligations or in preserving
any of Agent's or Lenders' rights and remedies (including, without limitation,
all such fees and expenses incurred in connection with any "workout" or
restructuring affecting the Credit Documents or the Obligations or any
bankruptcy or similar proceeding involving either Borrower or any of its
Subsidiaries). As used herein, the term "reasonable attorneys' fees and
expenses" shall include, without limitation, allocable costs and expenses of
Agent's and Lenders' in-house legal counsel and staff. The obligations of LSI
under this Paragraph 8.02 shall survive the payment and performance of the
Obligations and the termination of this Agreement.
8.03. Indemnification. To the fullest extent permitted by law, LSI
agrees to protect, indemnify, defend and hold harmless Agent, Lenders and their
Affiliates and their respective directors, officers, employees, agents and
advisors ("Indemnitees") from and against any and all liabilities, losses,
damages or expenses of any kind or nature and from any suits, claims or demands
(including in respect of or for reasonable attorney's fees and other expenses)
arising on account of or in connection with any matter or thing or action or
failure to act by Indemnitees, or any of them, arising out of or relating to the
Credit Documents or any transaction contemplated thereby, including without
limitation any use by either Borrower of any proceeds of the Loans, except to
the extent such liability arises from the willful misconduct or gross negligence
of such Indemnitee. Upon receiving knowledge of any suit, claim or demand
asserted by a third party that Agent or any Lender believes is covered by this
indemnity, Agent or such Lender shall give LSI notice of the matter and an
opportunity to defend it, at LSI's sole cost and expense, with legal counsel
satisfactory to Agent or such Lender, as the case may be. Agent or such Lender
may also require LSI to defend the matter. Any failure or delay of Agent or any
Lender to notify LSI of any such suit, claim or demand shall not relieve LSI of
its obligations under this Paragraph 8.03 but shall reduce such obligations to
the extent of any increase in those obligations caused solely by any such
failure or delay which is unreasonable. The obligations of LSI under this
Paragraph 8.03 shall survive the payment and performance of the Obligations and
the termination of this Agreement.
8.04. Waivers; Amendments. Any term, covenant, agreement or condition of
this Agreement or any other Credit Document may be amended or waived, and any
consent under this Agreement or any other Credit Document may be given, if such
amendment, waiver or
71
<PAGE> 76
consent is in writing and is signed by Borrowers and the Required Lenders (or
Agent on behalf of the Required Lenders with the written approval of the
Required Lenders); provided, however that:
(a) Any amendment, waiver or consent which would (i) reduce any
fees or other amounts payable for the account of all Lenders hereunder
or extend the scheduled date for payment of any such fees or amounts,
(ii) amend this Paragraph 8.04, (iii) amend the definition of Required
Lenders or (iv) release the LSI Guaranty or any substantial part of any
other guaranty or collateral which may be granted under the Security
Documents, must be in writing and signed or approved in writing by all
Lenders;
(b) Any amendment, waiver or consent which would (i) extend the
Revolving Termination Date with respect to the U.S. Revolving
Borrowings, (ii) increase the Total U.S. Revolving Commitment or (iii)
reduce the principal of or interest on the U.S. Revolving Loans or the
U.S. Revolving Commitment Fees or any other fees or amounts payable for
the account of all U.S. Lenders with U.S. Revolving Commitments or
extend the scheduled date for payment of any such principal, interest,
fees or amounts, must be in writing and signed or approved in writing by
all U.S. Lenders with U.S. Revolving Commitments or U.S. Revolving
Loans;
(c) Any amendment, waiver or consent which would (i) extend the
U.S. 364 Day Termination Date, (ii) increase the Total U.S. 364 Day
Commitment or (iii) reduce the principal of or interest on the U.S. 364
Day Loans or the U.S. 364 Day Commitment Fees or any other fees or
amounts payable for the account of all U.S. Lenders with U.S. 364 Day
Commitments or extend the scheduled date for payment of any such
principal, interest, fees or amounts, must be in writing and signed or
approved in writing by all U.S. Lenders with U.S. 364 Day Commitments or
U.S. 364 Day Loans;
(d) Any amendment, waiver or consent which would (i) extend the
Revolving Termination Date with respect to the Japanese Borrowings, (ii)
increase the Total Japanese Commitment or (iii) reduce the principal of
or interest on the Japanese Loans or the Japanese Commitment Fees or any
other fees or amounts payable for the account of all Japanese Lenders
hereunder or extend the scheduled date for payment of any such
principal, interest, fees or amounts, must be in writing and signed or
approved in writing by all Japanese Lenders;
(e) Any amendment, waiver or consent which would increase or
decrease the Commitment of any Lender (except for a pro rata decrease in
the Commitments of all Lenders with the same type of Commitment) must be
in writing and signed by such Lender; and
(f) Any amendment, waiver or consent which affects the rights or
obligations of Agent must be in writing and signed by Agent.
No failure or delay by Agent or any Lender in exercising any right under this
Agreement or any other Credit Document shall operate as a waiver thereof or of
any other right hereunder or thereunder nor shall any single or partial exercise
of any such right preclude any other further
72
<PAGE> 77
exercise thereof or of any other right hereunder or thereunder. Unless otherwise
specified in such waiver or consent, a waiver or consent given hereunder shall
be effective only in the specific instance and for the specific purpose for
which given.
8.05. Successors and Assigns.
(a) Binding Effect. This Agreement and the other Credit Documents
shall be binding upon and inure to the benefit of Borrowers, Lenders,
Agent, all future holders of the Notes and their respective successors
and permitted assigns, except that neither Borrower may assign or
transfer any of its rights or obligations under any Credit Document
without the prior written consent of Agent and each Lender.
(b) Participations. Any Lender may at any time sell to one or
more banks or other financial institutions ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of
such Lender under this Agreement and the other Credit Documents. In the
event of any such sale by a Lender of participating interests, such
Lender's obligations under this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such
Lender shall remain the holder of its Notes for all purposes under this
Agreement and Borrowers and Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement pursuant to which any
such sale is effected may require the selling Lender to obtain the
consent of the Participant in order for such Lender to agree in writing
to any amendment, waiver or consent of a type specified in clause
(a)(iv), (b)(i), (b)(iii), (c)(i), (c)(iii), (d)(i), (d)(iii) or
Subparagraph (e) of Paragraph 8.04 but may not otherwise require the
selling Lender to obtain the consent of such Participant to any other
amendment, waiver or consent hereunder. Borrowers also agree that any
Lender which has transferred any participating interest in its
Commitments or Loans shall, notwithstanding any such transfer, be
entitled to the full benefits accorded such Lender under Paragraph 2.10,
Paragraph 2.11, and Paragraph 2.12, as if such Lender had not made such
transfer.
(c) Assignments. Any Lender may, at any time, sell and assign to
any other Lender or any Eligible Assignee (individually, an "Assignee
Lender") all or a portion of its rights and obligations under this
Agreement and the other Credit Documents (such a sale and assignment to
be referred to herein as an "Assignment") pursuant to an assignment
agreement in the form of Exhibit H (an "Assignment Agreement"), executed
by each Assignee Lender and such assignor Lender (an "Assignor Lender")
and delivered to Agent for its acceptance and recording in the Register;
provided, however, that:
(i) Without the written consent of Agent and, if no
Default has occurred and is continuing, LSI (which consent of
Agent and LSI shall not be unreasonably withheld), no U.S. Lender
may make any Assignment of its U.S. Revolving Commitment, U.S.
364 Day Commitment or U.S. Loans to any Assignee Lender which is
not, immediately prior to such Assignment, a U.S. Lender
hereunder or an Affiliate thereof acting through an office or
branch located in the United States;
73
<PAGE> 78
(ii) Without the written consent of Agent and, if no
Default has occurred and is continuing, LLJS (which consent of
Agent and LLJS shall not be unreasonably withheld), no Japanese
Lender may make any Assignment of its Japanese Commitment or
Japanese Loans to any Assignee Lender which is not, immediately
prior to such Assignment, a Japanese Lender hereunder or an
Affiliate thereof acting through an office or branch located in
Japan;
(iii) Without the written consent of Agent and, if no
Default has occurred and is continuing, LSI (which consent of
Agent and LSI shall not be unreasonably withheld), no U.S. Lender
may make any Assignment of its U.S. Revolving Commitment, U.S.
364 Day Commitment or U.S. Loans to any Assignee Lender if, after
giving effect to such Assignment, the U.S. Revolving Commitment,
the U.S. 364 Day Commitment or the U.S. Loans of such Lender or
such Assignee Lender would in the aggregate be less than Ten
Million Dollars ($10,000,000) (except that a U.S. Lender may make
an Assignment which reduces its U.S. Revolving Commitment, U.S.
364 Day Commitment and U.S. Loans to zero without the written
consent of LSI and Agent);
(iv) Without the written consent of Agent and, if no
Default has occurred and is continuing, LLJS (which consent of
Agent and LLJS shall not be unreasonably withheld), no Japanese
Lender may make any Assignment of its Japanese Commitment or
Japanese Loans to any Assignee Lender if, after giving effect to
such Assignment, the Japanese Commitment or Japanese Loans of
such Lender or such Assignee Lender would in the aggregate be
less than One Billion Yen (Yen 1,000,000,000) (except that a
Japanese Lender may make an Assignment which reduces its Japanese
Commitment and Japanese Loans to zero without the written consent
of LSI and Agent);
(v) Without the written consent of Agent and, if no
Default has occurred and is continuing, LSI (which consent of
Agent and LSI shall not be unreasonably withheld), no U.S. Lender
with a U.S. Revolving Commitment may make any Assignment of its
U.S. Revolving Commitment or U.S. Revolving Loans which does not
assign and delegate an equal pro rata interest in all rights,
duties and obligations of such Lender under this Agreement and
the other Credit Documents (except for its rights and duties, if
any, relating to its U.S. 364 Day Commitment or U.S. 364 Day
Loans or its Japanese Commitment or Japanese Loans);
(vi) Without the written consent of Agent and, if no
Default has occurred and is continuing, LSI (which consent of
Agent and LSI shall not be unreasonably withheld), no U.S. Lender
with a U.S. 364 Day Commitment may make any Assignment of its
U.S. 364 Day Commitment or U.S. 364 Day Loans which does not
assign and delegate an equal pro rata interest in all rights,
duties and obligations of such Lender under this Agreement and
the other Credit Documents (except for its rights and duties, if
any, relating to its U.S. Revolving Commitment or U.S. Revolving
Loans or its Japanese Commitment or Japanese Loans);
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<PAGE> 79
(vii) Without the written consent of Agent and, if no
Default has occurred and is continuing, LLJS (which consent of
Agent and LLJS shall not be unreasonably withheld), no Japanese
Lender may make any Assignment of its Japanese Commitment or
Japanese Loan which does not assign and delegate an equal pro
rata interest in all rights, duties and obligations of such
Lender under this Agreement and the other Credit Documents
(except for its rights and duties, if any, relating to its U.S.
Revolving Commitment or U.S. Revolving Loans or its U.S. 364 Day
Commitment or U.S. 364 Day Loans); and
(viii) Any Assignor Lender which is, or which has an
Affiliate which is, a party to a Lender Rate Contract may not
make an Assignment of all of its Commitment or all of its Loans
to an Assignee Lender unless such Assignee Lender or its
Affiliate shall also assume all obligations of such Assignor
Lender or its Affiliate with respect to such Lender Rate
Contract.
Upon such execution, delivery, acceptance and recording of each
Assignment Agreement, from and after the Assignment Effective Date
determined pursuant to such Assignment Agreement, (A) each Assignee
Lender thereunder shall be a Lender hereunder with Commitments or Loans
as set forth on Attachment 1 to such Assignment Agreement (under the
caption "Commitments or Loans After Assignment") and shall have the
rights, duties and obligations of such a Lender under this Agreement and
the other Credit Documents, and (B) the Assignor Lender thereunder shall
be a Lender with Commitments or Loans as set forth on Attachment 1 to
such Assignment Agreement (under the caption "Commitments or Loans After
Assignment"), or, if the Commitments or Loans of the Assignor Lender
have been reduced to zero, the Assignor Lender shall cease to be a
Lender and to have any obligation to make any Loan; provided, however,
that any such Assignor Lender which ceases to be a Lender shall continue
to be entitled to the benefits of any provision of this Agreement which
by its terms survives the termination of this Agreement. Each Assignment
Agreement shall be deemed to amend Schedule I to the extent, and only to
the extent, necessary to reflect the addition of each Assignee Lender,
the deletion of each Assignor Lender which reduces its Commitments or
Loans to zero, and the resulting adjustment of Commitments or Loans
arising from the purchase by each Assignee Lender of all or a portion of
the rights and obligations of an Assignor Lender under this Agreement
and the other Credit Documents. On or prior to the Assignment Effective
Date determined pursuant to each Assignment Agreement, LSI, at its own
expense, shall, if requested by Assignee Lenders, execute and deliver to
Agent, in exchange for the surrendered Notes, if any, of the Assignor
Lender thereunder, new Notes to the order of each Assignee Lender
thereunder and, if the Assignor Lender is continuing as a Lender
hereunder, new Notes to the order of the Assignor Lender. The Notes
surrendered by the Assignor Lender shall be returned by Agent to LSI
marked "Replaced". Each Assignee Lender which becomes a U.S. Lender and
was not previously a U.S. Lender hereunder and which is not incorporated
under the laws of the United States of America or a state thereof shall,
within three (3) Business Days of becoming a U.S. Lender, deliver to LSI
and Agent such certificates and other evidence as LSI or Agent may
reasonably request to establish that such Lender is entitled to receive
payments under this Agreement on account of its U.S. Loans without
deduction or withholding of any United States federal income taxes. Each
Assignee Lender which
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<PAGE> 80
becomes a Japanese Lender and was not previously a Japanese Lender
hereunder and which is not incorporated under the laws of Japan shall,
within three (3) Business Days of becoming a Japanese Lender, deliver to
LLJS and Agent such certificates and other evidence as LLJS or Agent may
reasonably request to establish that such Lender is entitled to receive
payments under this Agreement on account of its Japanese Loans without
deduction or withholding of any Japanese income taxes.
(d) Register. Agent shall maintain at its address referred to in
Paragraph 8.01 a copy of each Assignment Agreement delivered to it and a
register (the "Register") for the recordation of the names and addresses
of Lenders and the Commitments or Loans of each Lender from time to
time. The entries in the Register shall be conclusive in the absence of
manifest error, and Borrowers, Agent and Lenders may treat each Person
whose name is recorded in the Register as the owner of the Commitments
or Loans recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by either Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(e) Registration. Upon its receipt of an Assignment Agreement
executed by an Assignor Lender and an Assignee Lender (and, to the
extent required by Subparagraph 8.05(c), by Borrowers and Agent)
together with payment to Agent by Assignor Lender of a registration and
processing fee of $3,000, Agent shall (i) promptly accept such
Assignment Agreement and (ii) on the Assignment Effective Date
determined pursuant thereto record the information contained therein in
the Register and give notice of such acceptance and recordation to
Lenders and Borrowers. Agent may, from time to time at its election,
prepare and deliver to Lenders and Borrowers a revised Schedule I
reflecting the names, addresses and respective Commitments or Loans of
all Lenders then parties hereto.
(f) Confidentiality. Subject to Paragraph 8.12, Agent and Lenders
may disclose the Credit Documents and any financial or other information
relating to Borrowers or any of their Subsidiaries to each other or to
any potential Participant or Assignee Lender.
(g) Pledges to Federal Reserve Banks. Notwithstanding any other
provision of this Agreement, any Lender may at any time assign all or a
portion of its rights under this Agreement and the other Credit
Documents to a Federal Reserve Bank. No such assignment shall relieve
the assigning Lender from its obligations under this Agreement and the
other Credit Documents.
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<PAGE> 81
8.06. Setoff; Security Interest.
(a) Setoff. In addition to any rights and remedies of Lenders
provided by law, each Lender shall have the right, with the prior
consent of Agent but without prior notice to or consent of Borrowers,
any such notice and consent being expressly waived by Borrowers to the
extent permitted by applicable law, upon the occurrence and during the
continuance of an Event of Default, to set-off and apply against the
Obligations of either Borrower any amount owing from such Lender to such
Borrower. The aforesaid right of set-off may be exercised by such Lender
against a Borrower or against any trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver or
execution, judgment or attachment creditor of such Borrower or against
anyone else claiming through or against such Borrower or such trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor, notwithstanding
the fact that such right of set-off may not have been exercised by such
Lender at any prior time. Each Lender agrees promptly to notify the
applicable Borrower after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not affect
the validity of such set-off and application.
(b) Security Interest. As security for the Obligations, each
Borrower hereby grants to Agent and each Lender, for the benefit of all
Lenders, a continuing security interest in any and all deposit accounts
or moneys of such Borrower now or hereafter maintained with such Lender.
Each Lender shall have all of the rights of a secured party with respect
to such security interest.
8.07. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the parties hereto and their permitted successors and assigns
hereunder, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
8.08. Partial Invalidity. If at any time any provision of this Agreement
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 Agreement 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.
8.09. Jury Trial. EACH OF BORROWERS, LENDERS AND AGENT, 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 ANY CREDIT DOCUMENT.
8.10. Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.
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<PAGE> 82
8.11. Borrowers' Liabilities. LSI is individually liable for the payment
of the U.S. Revolving Commitment Fees, the U.S. 364 Day Commitment Fees and the
principal of, interest on and all other amounts related to the U.S. Loans and
all expenses and indemnification payable under Paragraphs 8.02 and 8.03, and
LLJS is individually liable for the payment of the Japanese Commitment Fees and
the principal of, interest on and all other amounts related to the Japanese
Loans. LSI also is liable for the payment and performance of all Obligations of
LLJS under this Agreement and the other Credit Documents as provided in the LSI
Guaranty.
8.12. Confidentiality. Neither any Lender nor Agent shall disclose to
any Person any information with respect to Borrowers or any of their
Subsidiaries which is furnished pursuant to this Agreement or under the other
Credit Documents, except that any Lender or Agent may disclose any such
information (a) to its own directors, officers, employees, auditors, counsel and
other advisors and to its Affiliates to the extent reasonably determined by such
Lender or Agent to be necessary for the administration or enforcement of the
Credit Documents; (b) to any other Lender or Agent; (c) which is otherwise
available to the public; (d) if required or appropriate in any report, statement
or testimony submitted to any Governmental Authority having or claiming to have
jurisdiction over such Lender or Agent; (e) if required in response to any
summons or subpoena; (f) in connection with any enforcement by Lenders and Agent
of their rights under this Agreement or the other Credit Documents or any
litigation among the parties relating to the Credit Documents or the
transactions contemplated thereby; (g) to comply with any requirement of law
applicable to such Lender or Agent; (h) to any Assignee Lender or Participant or
any prospective Assignee Lender or Participant, provided that such Assignee
Lender or Participant or prospective Assignee Lender or Participant agrees to be
bound by this Paragraph 8.12; or (i) otherwise with the prior consent of
Borrowers; provided, however, that (i) any Lender or Agent served with any
summons or subpoena demanding the disclosure of any such information shall use
reasonable efforts to notify Borrowers promptly of such summons or subpoena if
not prohibited by any requirement of law and, if requested by Borrowers and not
disadvantageous to such Lender or Agent, to cooperate with Borrowers in
obtaining a protective order restricting such disclosure, and (ii) any
disclosure made in violation of this Agreement shall not affect the obligations
of Borrowers and their Subsidiaries under this Agreement and the other Credit
Documents.
8.13. Consent to Jurisdiction. Each Borrower irrevocably submits to the
non-exclusive jurisdiction of the courts of the State of California and the
courts of the United States of America located in the Northern District of
California and agrees that any legal action, suit or proceeding arising out of
or relating to this Agreement or any of the other Credit Documents may be
brought against such party in any such courts. Final judgment against either
Borrower in any such action, suit or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment, a certified or
exemplified copy of which shall be conclusive evidence of the judgment, or in
any other manner provided by law. Nothing in this Paragraph 8.13 shall affect
the right of Agent or any Lender to commence legal proceedings or otherwise sue
either Borrower in any other appropriate jurisdiction, or concurrently in more
than one jurisdiction, or to serve process, pleadings and other papers upon
either Borrower in any manner authorized by the laws of any such jurisdiction.
Each Borrower agrees that process served either personally or by registered mail
shall, to the extent permitted by law, constitute adequate service of process in
any such suit. Without limiting the foregoing, each Borrower hereby appoints, in
the case of any such action or proceeding brought in the courts of or in the
State of California, CT Corporation,
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<PAGE> 83
with offices on the date hereof at 818 West Seventh Street, Los Angeles,
California 90017, to receive for it and on its behalf, service of
process in the State of California with respect thereto, provided
Guarantor may appoint any other Person, reasonably acceptable to Agent,
with offices in the State of California to replace such agent for
service of process upon delivery to Agent of a reasonably acceptable
agreement of such new agent agreeing so to act. Guarantor irrevocably
waives to the fullest extent permitted by applicable law (a) any
objection which it may have now or in the future to the laying of the
venue of any such action, suit or proceeding in any court referred to in
the first sentence above; (b) any claim that any such action, suit or
proceeding has been brought in an inconvenient forum; (c) its right of
removal of any matter commenced by any other party in the courts of the
State of California to any court of the United States of America; (d)
any immunity which it or its assets may have in respect of its
obligations under this Agreement or any other Credit Document from any
suit, execution, attachment (whether provisional or final, in aid of
execution, before judgment or otherwise) or other legal process; and (e)
any right it may have to require the moving party in any suit, action or
proceeding brought in any of the courts referred to above arising out of
or in connection with this Agreement or any other Credit Document to
post security for the costs of Guarantor or to post a bond or to take
similar action.
[The first signature page follows]
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<PAGE> 84
IN WITNESS WHEREOF, Borrowers, Lenders and Agent have caused this
Agreement to be executed as of the day and year first above written.
BORROWERS: LSI LOGIC CORPORATION
By: /s/ MARK R. KENT
------------------------------------
Name: Mark R. Kent
------------------------------
Title: Treasurer
-----------------------------
LSI LOGIC JAPAN SEMICONDUCTOR, INC.
By: /s/ R. D. NORBY
------------------------------------
Name: R. Douglas Norby
------------------------------
Title: Representative Director
-----------------------------
AGENT: ABN AMRO BANK N.V.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
LENDERS: ABN AMRO BANK N.V.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
S-1
<PAGE> 85
IN WITNESS WHEREOF, Borrowers, Lenders and Agent have caused this
Agreement to be executed as of the day and year first above written.
BORROWERS: LSI LOGIC CORPORATION
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
LSI LOGIC JAPAN SEMICONDUCTOR, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
AGENT: ABN AMRO BANK N.V.
By: /s/ THOMAS R. WAGNER
------------------------------------
Name: Thomas R. Wagner
------------------------------
Title: Group Vice President
-----------------------------
By: /s/ ROBERT N. HARTINGER
------------------------------------
Name: Robert N. Hartinger
------------------------------
Title: Senior Vice President
-----------------------------
LENDERS: ABN AMRO BANK N.V.
By: /s/ THOMAS R. WAGNER
------------------------------------
Name: Thomas R. Wagner
------------------------------
Title: Group Vice President
-----------------------------
By: /s/ ROBERT N. HARTINGER
------------------------------------
Name: Robert N. Hartinger
------------------------------
Title: Senior Vice President
-----------------------------
S-1
<PAGE> 86
SCHEDULE I
LENDERS
PART A - COMMITMENTS
<TABLE>
<CAPTION>
U.S. JAPANESE
LENDER REVOLVING U.S 364 DAY COMMITMENT
COMMITMENT COMMITMENT (DOLLAR EQUIVALENT)
- ---------------------- ----------------------------------------------------------------
<S> <C> <C> <C>
ABN AMRO Bank N.V. $575,000,000, less $150,000,000 Total Japanese
amount of Total Commitment not to
Japanese Commitment exceed $100,000,000
</TABLE>
I-1
<PAGE> 87
PART B - ADDRESSES FOR NOTICES, ETC.
ABN AMRO BANK N.V.
Domestic Lending Office and Euro-Dollar Lending Office:
ABN AMRO Bank N.V.
135 South LaSalle Street
Chicago, IL 60603
Japanese Lending Office:
ABN AMRO Bank N.V.
Tokyo Branch
13F, Shiroyama JT Mori Building
4-3-1, Toranomon, Minato-ku
Tokyo 105
Japan
Address for Notices related to U.S. Borrowings:
ABN AMRO Bank N.V.
San Francisco International Branch
101 California Street, Suite 4550
San Francisco, CA 94111
Attn: Thomas R. Wagner
Tel. No: (415) 984-3734
Fax No: (415) 362-3524
Address for Notices related to Japanese Borrowings:
ABN AMRO Bank N.V.
Tokyo Branch
13F, Shiroyama JT Mori Building
4-3-1, Toranomon, Minato-ku
Tokyo 105
Japan
Attn: Kiyoharu Michiwaki or Takamasa Marito
Tel. No: 81-3-5405-6575 or 6565
Fax No: 81-3-5405-6902 or 6903
I-2
<PAGE> 88
With a copy of all notices to:
ABN AMRO North America, Inc.
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn: Linda Boardman
Tel. No: (212) 314-1724
Fax No: (212) 314-1712
Wiring Instructions for U.S. Borrowings:
ABN AMRO Bank N.V.
New York, New York
RT/ABA No.: 026009580
Account Name: ABN AMRO Bank N.V. - Chicago CPU
Account No.: 650-001-1789-41
Reference: LSI Logic Corporation
Wiring Instructions for Japanese Borrowings:
Paying Bank: Sakura Bank, Tokyo Eigyo-bu
Beneficiary: Oranda Ginko Tokyo Shiten
(Japanese Account Name for ABN AMRO Bank Tokyo Branch)
Type of Account: Current
Account No.: 1008000
Reference: LSI Logic Japan 1998 Credit Facility
-or-
BOJ Net (Bank of Japan Financial Network System)
Tohzo Yokin Furikae
Account No.: 0422-001
Settlement: Kokan Jiri
I-3
<PAGE> 89
SCHEDULE II
PRICING GRID
<TABLE>
<CAPTION>
APPLICABLE APPLICABLE APPLICABLE
U.S. REVOLVING MARGIN MARGIN MARGIN
PRICING COMMITMENT FEES AND FOR FOR FOR
PRICING PERIOD JAPANESE COMMITMENT BASE RATE LIBOR JAPANESE
RATIO LEVEL FEES LOANS LOANS LOANS
------- ------- ------------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
*0.75 1 0.250% 0% 0.750% 0.750%
>0.75,
*1.50 2 0.300% 0% 1.000% 1.000%
>1.50 3 0.325% 0% 1.250% 1.250%
</TABLE>
EXPLANATION
1. The U.S. Revolving Commitment Fees and the Japanese Commitment Fees and
the Applicable Margin For Base Rate Loans, LIBOR Loans and Japanese
Loans will be set for each Pricing Period and will vary depending upon
whether such period is a Level 1 Period, a Level 2 Period or a Level 3
Period.
2. The first Pricing Period, which commences on the date of this Agreement
and ends on September 30, 1998, will be a Level 2 Period.
3. Each Pricing Period thereafter will be a Level 1 Period, a Level 2
Period, or a Level 3 Period depending upon the Senior Debt to Pricing
Ratio calculated on an annualized basis for the most recent consecutive
two-quarter period ending on the last day of the quarter that ended
prior to the first day of such Pricing Period.
4. If on the date any interest is payable with respect to any Loans the
Applicable Margin for such Loans has not yet been determined for such
Pricing Period, the applicable Borrower shall pay an estimated amount of
interest with respect to such Loans calculated on the basis of the
Applicable Margin for the applicable category of Loans during the prior
Pricing Period. When the Applicable Margin and the final amount of
interest payable with respect to such Loans are determined, the
applicable Borrower shall pay to Agent any positive difference between
such final amount and the estimated amount of interest paid by such
Borrower with respect to such Loans and any negative difference between
such amounts shall be applied by Agent against any amounts then or
thereafter owing by such Borrower to Lenders holding the Loans on which
such excess interest was paid.
5. Examples:
(a) Pricing Ratio is 1.55 on an annualized basis for the
consecutive two-quarter period ending on September 30, 1998. The Pricing
Period of October 1, 1998 through December 31, 1998 will be a Level 1
Period.
(b) Pricing Ratio is 1.10 on an annualized basis for the
consecutive two-quarter period ending on December 31, 1998. The Pricing
Period of January 1, 1999 through March 31, 1999 will be a Level 2
Period.
* less than or equal to.
II-1
<PAGE> 90
SCHEDULE 3.01
I. INITIAL CLOSING DATE CONDITIONS PRECEDENT
A. PRINCIPAL CREDIT DOCUMENTS.
(1) The Credit Agreement, duly executed by each Borrower, each
Lender and Agent;
(2) Agent's Syndication Letter, duly executed by each Borrower;
(3) If the Initial Closing Date is the U.S. Closing Date, a Note
payable to each applicable U.S. Lender requesting such a Note for its
U.S. Revolving Loans or U.S. 364 Day Loans, each duly executed by LSI;
and
(4) If the Initial Closing Date is the Japanese Closing Date, the
LSI Guaranty, duly executed by LSI.
B. LSI CORPORATE DOCUMENTS.
(1) The Certificate of Incorporation of LSI, certified as of a
recent date prior to the Initial Closing Date by the Secretary of State
of Delaware;
(2) A Certificate of Good Standing (or comparable certificate)
for LSI, certified as of a recent date prior to the Initial Closing Date
by the Secretary of State of Delaware;
(3) A certificate of the Secretary or an Assistant Secretary of
LSI, dated the Initial Closing Date, certifying (a) that attached
thereto is a true and correct copy of the Bylaws of LSI as in effect on
the Initial Closing Date; (b) that attached thereto are true and correct
copies of resolutions duly adopted by the Board of Directors of LSI and
continuing in effect, which (i) authorize the execution, delivery and
performance by LSI of this Agreement and the other Credit Documents
executed or to be executed by LSI and the consummation of the
transactions contemplated hereby and thereby and (ii) designate the
officers authorized so to execute, deliver and perform on behalf of LSI;
and (c) that there are no proceedings for the dissolution or liquidation
of LSI;
(4) A certificate of the Secretary or an Assistant Secretary of
LSI, dated the Initial Closing Date, certifying the incumbency,
signatures and authority of the officers of LSI authorized to execute,
deliver and perform this Agreement, the other Credit Documents and all
other documents, instruments or agreements related thereto executed or
to be executed by LSI;
(5) Certificates of Good Standing (or comparable certificates)
for LSI, certified as of a recent date prior to the Initial Closing Date
by the Secretaries of State (or comparable official) of California and
each other jurisdiction in which LSI is qualified to do business and has
assets with a net book value in excess of $10,000,000 (exclusive of
intercompany assets and liabilities); and
3.01-1
<PAGE> 91
(6) Acceptance of appointment as agent for service of process on
LSI relating to the Credit Documents, executed by CT Corporation prior
to the Initial Closing Date.
C. LLJS CORPORATE DOCUMENTS.
(1) The Articles of Association (Teikan) of LLJS, certified as of
a recent date prior to the Initial Closing Date by a Representative
Director of LLJS;
(2) A copy of the commercial registry (Syougyou Tookibotoohon)
for LLJS, issued as of a recent date prior to the Initial Closing Date
by the registrar of the Tokyo Legal Affairs Bureau of the Ministry of
Justice;
(3) A certificate of a Representative Director of LLJS, dated the
Initial Closing Date, certifying (a) that attached thereto are true and
correct copies of resolutions duly adopted by the Board of Directors of
LLJS and continuing in effect, which (i) authorize the execution,
delivery and performance by LLJS of this Agreement and the other Credit
Documents executed or to be executed by LLJS and the consummation of the
transactions contemplated hereby and (ii) designate the officers,
directors and attorneys authorized so to execute, deliver and perform on
behalf of LLJS; and (b) that there are no proceedings for the
dissolution or liquidation of LLJS, together with an English translation
thereof (if appropriate);
(4) A certificate of a Representative Director of LLJS, dated the
Initial Closing Date, certifying the incumbency, signatures and
authority of the officers, directors or attorneys of LLJS authorized to
execute, deliver and perform this Agreement, the other Credit Documents
and all other documents, instruments or agreements related thereto
executed or to be executed by LLJS, together with an English translation
thereof (if appropriate); and
(5) Acceptance of appointment as agent for service of process on
LLJS relating to the Credit Documents, executed by CT Corporation prior
to the Initial Closing Date.
D. FINANCIAL STATEMENTS, FINANCIAL CONDITION, ETC.
(1) A copy of the unaudited Financial Statements of LSI and its
Subsidiaries for the fiscal quarter ended March 31, 1998, and for the
fiscal year to such date (prepared on a consolidated and consolidating
basis), certified by the Chief Financial Officer or Treasurer of LSI to
present fairly the financial condition, results of operations and other
information reflected therein and to have been prepared in accordance
with GAAP (subject to normal year-end audit adjustments);
(2) A copy of the audited consolidated Financial Statements of
LSI for the fiscal year ended December 31, 1997, prepared by Ernst &
Young LLP, together with a copy of the unqualified opinion and
management letter delivered by such accountants in connection with such
Financial Statements;
3.01-2
<PAGE> 92
(3) A copy of the 10-Q report filed by LSI with the SEC for the
quarter ended March 31, 1998;
(4) A copy of the 10-K report filed by LSI with the SEC for the
fiscal year ended December 31, 1997;
(5) A final sources and uses statement for the Symbios
Acquisition (including transaction costs);
(6) A pro forma balance sheet of LSI prepared as of June 30,
1998, but incorporating all preclosing adjustments and reflecting the
consummation of the Symbios Acquisition, the Loans to be made in
connection therewith and the other transactions contemplated by the
Symbios Acquisition Documents, certified by the Chief Financial Officer
or Treasurer of LSI as having been prepared based upon reasonable
assumptions and in good faith; and
(7) Such other financial, business and other information
regarding Borrowers or any of their Subsidiaries as Agent or any Lender
may reasonably request, including information as to the Symbios
Acquisition and possible contingent liabilities, tax matters,
environmental matters and obligations for employee benefits and
compensation.
E. OPINIONS.
A favorable written opinion from Wilson, Sonsini, Goodrich &
Rosati, counsel for Borrowers and LSI as guarantor under the LSI
Guaranty, in the form of Exhibit I, dated the Initial Closing Date,
addressed to Agent for the benefit of Agent and Lenders, covering such
legal matters as Agent may reasonably request and otherwise in form and
substance satisfactory to Agent:
F. OTHER ITEMS.
(1) A duly completed and timely delivered Notice of Borrowing for
the applicable Borrowing and, if the Initial Closing Date is the
Japanese Closing Date, the receipt by Agent of written notice from LLJS
specifying the Total Japanese Commitment on the day four (4) Business
Days prior to the Initial Closing Date;
(2) Copies of the principal Symbios Acquisition Documents;
(3) Copies of all filings made by LSI with the SEC in connection
with the Symbios Acquisition, together with all exhibits and all
amendments thereto through the Initial Closing Date;
(4) A certificate from each of the Chief Financial Officer or
Treasurer of LSI and a Representative Director of LLJS, respectively,
addressed to Agent and dated the Initial Closing Date, certifying that:
(a) The representations and warranties set forth in
Paragraph 4.01 and in the other Credit Documents are true and
correct in all material respects as of
3.01-3
<PAGE> 93
such date (except for such representations and warranties made as
of a specified date, which shall be true as of such date); and
(b) No Default has occurred and is continuing as of such
date.
(5) All fees and expenses payable to Agent and Lenders on or
prior to the Initial Closing Date (including all fees payable to Agent
pursuant to the Agent's Fee Letter);
(6) All fees and expenses of Agent's counsels through the Initial
Closing Date;
(7) Such other evidence as Agent or any Lender may reasonably
request to establish the accuracy and completeness of the
representations and warranties and the compliance with the terms and
conditions contained in this Agreement and the other Credit Documents;
(8) Copies of the irrevocable notices delivered by LLJS pursuant
to the Outstanding Japanese Loan Facility of its intention to cancel all
commitments and prepay all amounts outstanding thereunder by no later
than August 31, 1998;
(9) Copies of the form of LSI's 5 1/2% Subordinated Notes due
2001 and the indenture relating thereto;
(10) Such documentation as ABN AMRO may require in order for LLJS
to open an account with its Tokyo branch, including, without limitation,
an Agreement on Bank Transactions and an Agreement on Overdraft in
Current Account.
II. POST-CLOSING CONDITIONS SUBSEQUENT
A. English translations of the Articles of Association (Teikan) and
commercial registry (Syougyou Tookibotoohon) for LLJS delivered pursuant to
Items C(1) and C(2) of Part I of this Schedule 3.01.
B. A favorable written opinion from Nagashima & Ohno, , Japanese counsel
for LLJS, in the form of Exhibit J, addressed to Agent for the benefit of Agent
and Lenders, covering such legal matters as Agent may reasonably request and
otherwise in form and substance satisfactory to Agent:
3.01-4
<PAGE> 94
SCHEDULE 4.01(d)
GOVERNMENTAL CONSENTS
(1) Pursuant to the Hart, Scott, Rodino Act, LSI Logic Corporation was granted
early termination from the Federal Trade Commission (FTC) on July 21, 1998 with
respect to its proposed acquisition of Symbios, Inc.
<PAGE> 95
DISCLOSURE SCHEDULE
SECTION 4.01(g)
Ethel Taylor v. LSI Logic Corporation.
Case #13915 in Court of Chancery of the State of Delaware in and for New
Castle County. The matter is described in the Form 10-K of LSI Logic
Corporation at Item 3, Legal Proceedings therein. Plaintiff's appeal of the
court of Chancery's dismissal upon LSI Logic's motion is still pending.
In the Matter of LSI Logic Corporation of Canada and its Shareholders.
Action #9501-15628 in the Court of Queen's Bench of Alberta, Judicial
District of Calgary. This matter is described in the form 10-K of LSI Logic
Corporation at Item 3, Legal Proceedings therein.
<PAGE> 96
SCHEDULE 4.01(i)
None
<PAGE> 97
SCHEDULE 4.01(1)
SIGNIFICANT SUBSIDIARIES
<TABLE>
- --------------------------------------------------------------------------------
%
NAME OF SUBSIDIARY SHAREHOLDER(S) OWNERSHIP
- ------------------ ---------------------- ---------
<S> <C> <C>
- --------------------------------------------------------------------------------
LSI Logic Corporation of LSI Logic Corporation 100%
Canada, Inc.
- --------------------------------------------------------------------------------
Mint Technology, Inc. LSI Logic Corporation 100%
- --------------------------------------------------------------------------------
LSI Logic Netherlands B.V. LSI Logic Corporation 100%
- --------------------------------------------------------------------------------
LSI Logic Europe LTD LSI Logic Netherlands B.V. 100%
- --------------------------------------------------------------------------------
LSI Logic Hong Kong LSI Logic Netherlands B.V. 100%
- --------------------------------------------------------------------------------
LSI Logic HK Holdings LSI Logic Netherlands 100%
Antilles B.V.
- --------------------------------------------------------------------------------
LSI Logic KK LSI Logic Netherlands B.V. 91%
- --------------------------------------------------------------------------------
LSI Logic Japan LSI Logic Netherlands B.V. 100%
Semiconductor, Inc.
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 98
DISCLOSURE SCHEDULE
SECTION 5.02(a)
LIENS OF LSI LOGIC CORPORATION
See Attached Schedule "Lease Base Report", 07/98.
LIENS OF SUBSIDIARIES
1. Nippon Life Insurance Company: The outstanding balance as of July 31,
1998 is Y150,000,000. The security for the loans is the land, building
and equipment of the Borrower which constitute a Kojo-Zeiden-Teito
(factory mortgage) (located at 10-banchi, Kitahara, Tsukuba-shi).
2. Kawasaki Leasing Co.
Miscellaneous lease agreements involving automobiles, office computer,
testing instruments and so on. Those leased items are owned by Kawasaki
Leasing Co.
3. The Industrial Bank of Japan Leasing
Master Lease Agreement and Master Purchase Agreement dated June 16, 1995
and leasing transactions thereunder in connection with Y15 billion
synthetic lease. The net present value of the remaining lease payments,
including the equipment purchase option, is approximately Y8,279,048,000
as of July 31, 1998.
<PAGE> 99
LEASE BASE REPORT
07/98
<TABLE>
- -------------------------------------------------------------------------------------------------------
Original
Equity Purchase Lease
Schedule 1 Description Price Maturity
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
??????:
CE 18-00 5IIN SS1D M5I WFIGB CLD SN 034F200] 16,987 09/30/ 98
CE 18-00 SUN 4/20 3,214 09/30/ 98
CE 18-00 NS 5000 NETWORK SERVER AND UPGRADE 331,707 09/30/ 98
CE 18-00 19" COLOR MONITOR OLD SN 524F2484 1,797 09/30/ 98
CE 18-00 SUN 4/20 3,214 09/30/ 98
CE 18-00 SUN 5S90 M51 WF1GB OLD SN 034F2052 16,967 09/30/ 98
CE 18-00 SUN 5S90 M51 WF1GB OLD SN 046F1778 16,967 09/30/ 98
CE 18-00 SUN 4/20 3,214 09/30/ 98
CE 18-00 SUN SPARC SS 10/30 10,097 09/30/ 98
CE 18-00 SUN 4/20 3,214 09/30/ 98
CE 18-00 SUN 5S10 M51 WF1GB OLD SN038F109] 16,967 09/30/ 98
CE 18-00 SUN SPARC SS10/30 16,097 09/30/ 98
CE 18-00 SUN 4M70 SPARCSTATION 55,341 09/30/ 98
CE 18-00 SUN SPARC SS 10/30 16,097 09/30/ 98
CE 18-00 SUN SS10 M51 WF1GB OLD SN034F2043 16,987 09/30/ 98
CE 21-01 SUNSPARC 10-40 WF1GB 13,298 03/31/ 99
CE 21-01 SUN OMB 19" COLOR WORKSTATION 8,343 03/31/ 99
CE 21-01 SUN IPX S10-40 WF1GB 10,813 03/31/ 99
CE 21-01 SUN OMB 10" COLOR-GX WORKSTATION 9,875 03/31/ 99
CE 21-01 SUN SPARCSTATION LPG TO 4/75 4,197 03/31/ 99
CE 21-01 SUN SS10 M41 WF1GB, ??NTE ???AL SCSI DISK 8,745 03/31/ 99
CE 21-01 SUN SPARC 10-40 WF1GB 13,295 03/31/ 99
CE 21-01 SUN SPARCPRINTER LASERPRINTER 1,730 03/31/ 99
CE 21-01 SUN IPX S10-40 WF1GB 10,113 03/31/ 99
CE 21-01 3/200 UQ TO 4/300 W321/8 11,133 03/31/ 99
CE 21-01 SUNSPARC 10GX-40 WF1GB 13,797 03/31/ 99
CE 21-01 64MB SIMM 2,640 03/31/ 99
CE 21-01 SUN SPARC 10-40 WF1GB 12,300 03/31/ 99
CE 21-01 SUN 8MB 19" COLOR WORKSTATION 8,343 03/31/ 99
CE 21-01 SUN IPX S10-40 WF1GB 10,113 03/31/ 99
CE 21-01 64MB SIMM 2,640 03/31/ 99
CE 21-01 64MB SIMM 2,640 03/31/ 99
CE 24-00 SEAGATE 1.2GB IPI DISK, U/G #99282 6,365 12/31/ 99
CE 24-00 UG TO 4/75, OLD SN D18F0239 4,491 12/31/ 99
CE 24-00 128MB MEM SD, UG TO A99095 ICE-87) 28,890 12/31/ 99
CE 24-00 SEAGATE 1.2GB IPI DISK, U/G #97282 8,366 12/31/ 99
CE 24-00 SUN1PZ S10-40 WF1GB 19,170 12/31/ 99
CE 24-00 2 EA 32MB MEM 80, UG TO #90015 16,692 12/31/ 99
CE 24-00 2 EA 32MB MEM 80, UG TO #90035 16,692 12/31/ 99
CE 24-00 ADD GX TO U/G COLR SYS 1,620 12/31/ 99
CE 24-00 2 EA 32MB MEM 80, U/G TO 399033 16,892 12/31/ 99
CE 24-00 170MB MEM 8D, U/G TO #99032 (CE-15) 28,890 12/31/ 99
CE 24-00 128MB MEM 8D, U/G TO #99013 (CE-12) 28,890 12/31/ 99
CE 24-00 2 EA 32MB MEM 8D, U/G TO #90016 (CE-12) 16,892 12/31/ 99
CE 24-00 SUN NFS PRESTOSERVER ACCL FOR 4/430 4,810 12/31/ 99
CE EQ-01 MICROSCAN SVGL OUV EXPOSURE SYSTEM 4,150,571 09/27/ 99
CE EQ 07 Tokyo Electron limited Ocean Track Mark 8 1,478,420 05/12/ 00
</TABLE>
<TABLE>
- -------------------------------------------------------------------------------------------------------
Original
Equity Purchase Lease
Schedule 1 Description Price Maturity
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AT&T 002 CREDENCE LT1101 TEST SYSTEM 2,645,748 10/31/ 98
AT&T 003 CREDENCE LT1101 TEST SYSTEM 2,190,347 10/31/ 98
Capital Lease DANA THERMCO OXIDATION SERIES 7300 VTR 1,664,244 05/01/ 00
Capital Lse GE 22 IDS 3000 PROBE STATION 205,811 01/01/ 99
CIT 9-002 CREDENCE SYS 6266 VLSITEST SYSTEM 599,960 07/01/ 98
GE CITIZENS LEASING C-1 L?? Rainbow 4520 Oxide Etching System w/pum 1,006,408 04/01/ 02
GE CITIZENS LEASING C-2 NOVELLUS HDP 1,146,320 04/01/ 02
GE CITIZENS LEASING C-3 NOVELLUS HDP 1,146,320 04/01/ 02
GE CITIZENS LEASING C-4 NOVELLUS CONCEPT ONE 1,260,220 04/01/ 02
GE E-02 CANON FPA 2500 STEPPER 2,250,000 10/01/ 99
GE E-03 KLA WAFER INSPECTOR 1,746,000 10/01/ 99
GE E-04 CREDENCE SC212 TESTER W/UNIVERSAL LD 741,865 12/01/ 99
GE E-04 CREDENCE SC212 TESTER 212,773 12/01/ 99
GE E-05 ONTRACT FS/OS WAFER CLEANER 219,048 12/01/ 99
GE E-43 WESTECH CMP POLISHER 282,038 12/31/ 99
GE E-43 WESTECH CMP POLISHER 282,038 12/31/ 99
GE E-07 F????? Monitoring System for AMT 6500 210,090 12/31/ 99
GE E-07 Applied Material 6500 E???? System 3,280,324 12/31/ 99
GE E-08 Eston High Energy Ion Implanter 3,891,849 01/02/ 02
GE E-09 LAM 9600 METAL ETCHER 1,509,133 01/02/ 02
GE E-10 Mitachi S-882 CD/SEM for Jelda Wafer 1,383,305 01/02/ 02
GE E-11 ONS SPINCOAT DEVELOPER 1,041,239 01/02/ 02
GE KEYCORP K-1 ONS ANNEALING SYSTEM FOR ATP 821,100 04/01/ 02
GE PNC LEASING IP-1 (2) ONS TRACKS 1,522,007 01/02/ 02
GE PNC LEASING IP-2 LAN 5408 1,146,320 01/02/ 02
PITNEY BOWES 001 NIKON STEPPER 3,784,280 12/30/ 02
USL CAP. 022012 LAM #4500 RAINBOW OXIDE ETCHSYSTEM 738,102 12/10/ 98
USL CAP. 123845 Lam Research 9600 Metal Etcher w/pump 1,601,472 12/01/ 98
CIT 01 LAM 4528 OXIDE ETCH SYSTEM 828,203 07/01/ 98
</TABLE>
<PAGE> 100
EXHIBIT A
NOTICE OF U.S. BORROWING
[Date]
ABN AMRO Bank N.V.,
as Agent
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
U.S.A.
Attn: Linda Boardman
1. Reference is made to that certain Credit Agreement, dated as of
August 5, 1998 (the "Credit Agreement"), among LSI Logic Corporation ("LSI"),
LSI Logic Japan Semiconductor, Inc., the financial institutions listed in
Schedule I to the Credit Agreement (the "Lenders") and ABN AMRO Bank N.V., as
agent for Lenders (in such capacity, "Agent"). Unless otherwise indicated, all
terms defined in the Credit Agreement have the same respective meanings when
used herein.
2. Pursuant to Subparagraph 2.01(c) of the Credit Agreement, LSI hereby
irrevocably requests a U.S. Borrowing upon the following terms:
(a) The requested U.S. Borrowing is to be a [U.S. Revolving
Borrowing][U.S. 364 Day Borrowing];
(b) The principal amount of the requested U.S. Borrowing is to be
$__________;
(c) The requested U.S. Borrowing is to consist of [Base
Rate][LIBOR] Loans;
(d) If the requested U.S. Borrowing is to consist of LIBOR Loans,
the initial Interest Period for such Loans will be month[s]; and
(e) The date of the requested U.S. Borrowing is to be __________,
____.
3. LSI hereby certifies to Lenders and Agent that, on the date of this
Notice of U.S. Borrowing and after giving effect to the requested U.S.
Borrowing:
(a) The representations and warranties of Borrowers and their
Subsidiaries set forth in Paragraph 4.01 of the Credit Agreement and in
the other Credit Documents are true and correct in all material respects
as if made on such date (except for representations and warranties
expressly made as of a specified date, which shall be true as of such
date);
A-1
<PAGE> 101
(b) No Default has occurred and is continuing; and
(c) All of the Credit Documents are in full force and effect.
4. Please disburse the proceeds of the requested U.S. Borrowing to
________________________________________________________________________________
IN WITNESS WHEREOF, LSI has executed this Notice of U.S. Borrowing on
the date set forth above.
LSI LOGIC CORPORATION
By: ___________________________________
Name: _____________________________
Title: ____________________________
A-2
<PAGE> 102
EXHIBIT B
NOTICE OF U.S. BORROWING CONVERSION
[Date]
ABN AMRO Bank N.V.,
as Agent
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
U.S.A.
Attn: Linda Boardman
1. Reference is made to that certain Credit Agreement, dated as of
August 5, 1998 (the "Credit Agreement"), among LSI Logic Corporation ("LSI"),
LSI Logic Japan Semiconductor, Inc., the financial institutions listed in
Schedule I to the Credit Agreement (the "Lenders") and ABN AMRO Bank N.V., as
agent for Lenders (in such capacity, "Agent"). Unless otherwise indicated, all
terms defined in the Credit Agreement have the same respective meanings when
used herein.
2. Pursuant to Subparagraph 2.01(e) of the Credit Agreement, LSI hereby
irrevocably requests to convert a U.S. Borrowing as follows:
(a) The U.S. Borrowing to be converted consists of ["Base Rate"
or "LIBOR"] Loans in the aggregate principal amount of $__________ which
were initially advanced to LSI on , , as a [U.S. Revolving Borrowing or
U.S. 364 Day Borrowing][, and have a current Interest Period of ____
month[s] expiring on _________________, ____];
(b) The U.S. Loans in such U.S. Borrowing are to be converted
into ["Base Rate" or "LIBOR"] Loans;
(c) If such U.S. Loans are to be converted into LIBOR Loans, the
initial Interest Period for such U.S. Loans commencing upon conversion
will be month[s]; and
(d) The date of the requested conversion is to be __________,
____.
B-1
<PAGE> 103
3. LSI hereby certifies to Lenders and Agent that, on the date of this
Notice of U.S. Borrowing Conversion, and after giving effect to the requested
conversion:
(a) The representations and warranties of Borrowers and their
Subsidiaries set forth in Paragraph 4.01 of the Credit Agreement and in
the other Credit Documents are true and correct in all material respects
as if made on such date (except for representations and warranties
expressly made as of a specified date, which shall be true as of such
date);
(b) No Default has occurred and is continuing; and
(c) All of the Credit Documents are in full force and effect.
IN WITNESS WHEREOF, LSI has executed this Notice of U.S. Borrowing
Conversion on the date set forth above.
LSI LOGIC CORPORATION
By: ___________________________________
Name: _____________________________
Title: ____________________________
B-2
<PAGE> 104
EXHIBIT C
NOTICE OF U.S. BORROWING INTEREST PERIOD SELECTION
[Date]
ABN AMRO Bank N.V.,
as Agent
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
U.S.A.
Attn: Linda Boardman
1. Reference is made to that certain Credit Agreement, dated as of
August 5, 1998 (the "Credit Agreement"), among LSI Logic Corporation ("LSI"),
LSI Logic Japan Semiconductor, Inc., the financial institutions listed in
Schedule I to the Credit Agreement (the "Lenders") and ABN AMRO Bank N.V., as
agent for Lenders (in such capacity, "Agent"). Unless otherwise indicated, all
terms defined in the Credit Agreement have the same respective meanings when
used herein.
2. Pursuant to Subparagraph 2.01(f) of the Credit Agreement, LSI hereby
irrevocably selects a new Interest Period for a U.S. Borrowing as follows:
(a) The U.S. Borrowing for which a new Interest Period is to be
selected consists of LIBOR Loans in the aggregate principal amount of
$__________ which were initially advanced to LSI on , , as a [U.S.
Revolving Borrowing or U.S. 364 Day Borrowing];
(b) The last day of the current Interest Period for such LIBOR
Loans is ___________, ____; and
(c) The next Interest Period for such LIBOR Loans commencing upon
the last day of the current Interest Period is to be _________ month[s].
3. LSI hereby certifies to Lenders and Agent that, on the date of this
Notice of U.S. Borrowing Interest Period Selection, and after giving effect to
the requested selection:
(a) The representations and warranties of Borrowers and their
Subsidiaries set forth in Paragraph 4.01 of the Credit Agreement and in
the other Credit Documents are true and correct in all material respects
as if made on such date (except for representations and warranties
expressly made as of a specified date, which shall be true as of such
date);
(b) No Default has occurred and is continuing; and
C-1
<PAGE> 105
(c) All of the Credit Documents are in full force and effect.
IN WITNESS WHEREOF, LSI has executed this Notice of U.S. Borrowing
Interest Period Selection on the date set forth above.
LSI LOGIC CORPORATION
By: ___________________________________
Name: _____________________________
Title: ____________________________
C-2
<PAGE> 106
EXHIBIT D
NOTICE OF JAPANESE BORROWING
[Date]
ABN AMRO Bank N.V.,
as Agent
13F, Shiroyama JT Mori Building
4-3-1, Toranomon, Minato-ku
Tokyo 105, Japan
Attn: Kiyoharu Michiwaki
1. Reference is made to that certain Credit Agreement, dated as of
August 5, 1998 (the "Credit Agreement"), among LSI Logic Corporation, LSI Logic
Japan Semiconductor, Inc. ("LLJS"), the financial institutions listed in
Schedule I to the Credit Agreement (the "Lenders") and ABN AMRO Bank N.V., as
agent for Lenders (in such capacity, "Agent"). Unless otherwise indicated, all
terms defined in the Credit Agreement have the same respective meanings when
used herein.
2. Pursuant to Subparagraph 2.02(b) of the Credit Agreement, LLJS hereby
irrevocably requests a Japanese Borrowing upon the following terms:
(a) The principal amount of the requested Japanese Borrowing is
to be yen__________;
(b) The initial Interest Period of the requested Japanese
Borrowing will be month[s]; and
(c) The date of the requested Japanese Borrowing is to be
__________, ____.
3. LLJS hereby certifies to Lenders and Agent that, on the date of this
Notice of Japanese Borrowing and after giving effect to the requested Japanese
Borrowing:
(a) The representations and warranties of Borrowers and their
Subsidiaries set forth in Paragraph 4.01 of the Credit Agreement and in
the other Credit Documents are true and correct in all material respects
as if made on such date (except for representations and warranties
expressly made as of a specified date, which shall be true as of such
date);
(b) No Default has occurred and is continuing; and
(c) All of the Credit Documents are in full force and effect.
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4. Please disburse the proceeds of the requested Japanese Borrowing to
________________________________________________________________________________
IN WITNESS WHEREOF, LLJS has executed this Notice of Japanese Borrowing
on the date set forth above.
LSI LOGIC JAPAN SEMICONDUCTOR, INC.
By: ___________________________________
Name: _____________________________
Title: ____________________________
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EXHIBIT E
NOTICE OF JAPANESE BORROWING INTEREST PERIOD SELECTION
[Date]
ABN AMRO Bank N.V.,
as Agent
13F, Shiroyama JT Mori Building
4-3-1, Toranomon, Minato-ku
Tokyo 105, Japan
Attn: Kiyoharu Michiwaki
1. Reference is made to that certain Credit Agreement, dated as of
August 5, 1998 (the "Credit Agreement"), among LSI Logic Corporation, LSI Logic
Japan Semiconductor, Inc. ("LLJS"), the financial institutions listed in
Schedule I to the Credit Agreement (the "Lenders") and ABN AMRO Bank N.V., as
agent for Lenders (in such capacity, "Agent"). Unless otherwise indicated, all
terms defined in the Credit Agreement have the same respective meanings when
used herein.
2. Pursuant to Subparagraph 2.02(d) of the Credit Agreement, LLJS hereby
irrevocably selects a new Interest Period for a Japanese Borrowing as follows:
(a) The Japanese Borrowing for which a new Interest Period is to
be selected is in the aggregate principal amount of yen _________ which
was initially advanced to LLJS on _________, _____;
(b) The last day of the current Interest Period for such Japanese
Borrowing is ___________, ____; and
(c) The next Interest Period for such Japanese Borrowing
commencing upon the last day of the current Interest Period is to be
_________ month[s].
3. LLJS hereby certifies to Lenders and Agent that, on the date of this
Notice of Japanese Borrowing Interest Period Selection, and after giving effect
to the requested selection:
(a) The representations and warranties of Borrowers and their
Subsidiaries set forth in Paragraph 4.01 of the Credit Agreement and in
the other Credit Documents are true and correct in all material respects
as if made on such date (except for representations and warranties
expressly made as of a specified date, which shall be true as of such
date);
(b) No Default has occurred and is continuing; and
(c) All of the Credit Documents are in full force and effect.
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IN WITNESS WHEREOF, LLJS has executed this Notice of Japanese Borrowing
Interest Period Selection on the date set forth above.
LSI LOGIC JAPAN SEMICONDUCTOR, INC.
By: ___________________________________
Name: _____________________________
Title: ____________________________
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<PAGE> 110
EXHIBIT F
NOTE
$______________ ____________________, __________
________________, ____
FOR VALUE RECEIVED, LSI LOGIC CORPORATION, a Delaware corporation
("Borrower"), hereby promises to pay to the order of ____________________, a
____________________ ("Lender"), the principal sum of
______________________________ DOLLARS ($__________), or such lesser amount as
shall equal the aggregate outstanding principal balance of the [U.S. Revolving
Loans][U.S. 364 Day Loans] made by Lender to Borrower pursuant to the Credit
Agreement referred to below (as amended from time to time, the "Credit
Agreement"), on or before the [Revolving Termination Date][U.S. 364 Day
Termination Date] specified in the Credit Agreement; and to pay interest on the
outstanding amount of said sum, or such lesser amount, at the rates and on the
dates provided in the Credit Agreement.
Borrower shall make all payments hereunder, for the account of Lender's
Applicable Lending Office, to Agent as indicated in the Credit Agreement, in
lawful money of the United States and in same day or immediately available
funds.
Borrower hereby authorizes Lender to record on the schedule(s) annexed
to this note the date and amount of each [U.S. Revolving Loan][U.S. 364 Day
Loan] and of each payment or prepayment of principal made by Borrower and agrees
that all such notations shall constitute prima facie evidence of the matters
noted; provided, however, that the failure of Lender to make any such notation
shall not affect Borrower's obligations hereunder.
This note is one of the Notes referred to in the Credit Agreement, dated
as of August 5, 1998, among Borrower, LSI Logic Japan Semiconductor, Inc.,
Lender and the other financial institutions from time to time parties thereto
(collectively, the "Lenders") and ABN AMRO Bank N.V., as agent for Lenders. This
note is subject to the terms of the Credit Agreement, including the rights of
prepayment and the rights of acceleration of Maturity set forth therein. Terms
used herein have the meanings assigned to those terms in the Credit Agreement,
unless otherwise defined herein.
The transfer, sale or assignment of any rights under or interest in this
note is subject to certain restrictions contained in the Credit Agreement,
including Paragraph 8.05 thereof.
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Borrower shall pay all reasonable fees and expenses, including
reasonable attorneys' fees, incurred by Lender in the enforcement or attempt to
enforce any of Borrower's obligations hereunder not performed when due. Borrower
hereby waives notice of presentment, demand, protest or notice of any other
kind. This note shall be governed by and construed in accordance with the laws
of the State of California.
LSI LOGIC CORPORATION
By: ___________________________________
Name: _____________________________
Title: ____________________________
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LOANS AND PAYMENTS OF PRINCIPAL
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Date Loan Loan Period or Prepaid Balance Made By
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</TABLE>
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<PAGE> 113
EXHIBIT G
LSI GUARANTY
THIS GUARANTY, dated as of [ ], 1998, is executed by LSI LOGIC
CORPORATION, a Delaware corporation ("Guarantor"), in favor of ABN AMRO BANK
N.V., acting as agent (in such capacity, and each successor thereto in such
capacity, "Agent") for the financial institutions which are from time to time
parties to the Credit Agreement referred to in Recital A below (collectively,
"Lenders").
RECITALS
A. Pursuant to a Credit Agreement dated as of August 5, 1998 (as amended
from time to time, the "Credit Agreement"), among LSI Logic Japan Semiconductor,
Inc. ("Borrower"), Guarantor, Lenders and Agent, Lenders have agreed to extend
certain credit facilities to Borrower and Guarantor upon the terms and subject
to the conditions set forth therein. Borrower is a wholly-owned Subsidiary of
Guarantor.
B. Lenders' obligations to extend the credit facilities to Borrower and
Guarantor under the Credit Agreement are subject, among other conditions, to
receipt by Agent of this Guaranty, duly executed by Guarantor.
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, Guarantor hereby agrees with Agent, for the ratable benefit of
Lenders and Agent, as follows:
1. DEFINITIONS AND INTERPRETATION.
(a) Definitions. When used in this Guaranty, the following terms
shall have the following respective meanings:
"Agent" shall have the meaning given to that term in the
introductory paragraph hereof.
"Borrower" shall have the meaning given to that term in
the Recital A hereof.
"Credit Agreement" shall have the meaning given to that
term in the Recital A hereof.
"Debtor Relief Proceeding" shall mean any suit, action,
case or other proceeding commenced by, against or for Borrower or
Guarantor or its property
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seeking the dissolution, liquidation, reorganization,
rearrangement or other relief of Borrower or Guarantor or its
debts under any applicable bankruptcy, insolvency or debtor
relief law or other similar Governmental Rule now or hereafter in
effect or seeking the appointment of a receiver, trustee,
liquidator, custodian or other similar official for Borrower or
Guarantor or any substantial part of its property or any general
assignment by Borrower or Guarantor for the benefit of its
creditors, whether or not any such suit, action, case or other
proceeding is voluntary or involuntary.
"Disallowed Post-Commencement Interest and Expenses" shall
mean interest computed at the rate provided in the Credit
Agreement and claims for reimbursement, costs, expenses or
indemnities under the terms of any of the Credit Documents
accruing or claimed at any time after the commencement of any
Debtor Relief Proceeding, if the claim for such interest,
reimbursement, costs, expenses or indemnities is not allowable,
allowed or enforceable against Borrower in such Debtor Relief
Proceeding.
"Guaranteed Obligations" shall mean and include all loans,
advances, debts, liabilities, and obligations, howsoever arising,
owed by Borrower to Agent or any Lender of every kind and
description (whether or not evidenced by any note or instrument
and whether or not for the payment of money), direct or indirect,
absolute or contingent, due or to become due, now existing or
hereafter arising pursuant to the terms of the Credit Documents,
including all interest, fees, charges, expenses, attorneys' fees
and accountants' fees chargeable to Borrower or payable by
Borrower thereunder.
"Guarantor" shall have the meaning given to that term in
the introductory paragraph hereof.
"Lenders" shall have the meaning given to that term in the
introductory paragraph hereof.
"Subordinated Obligations" shall have the meaning given to
that term in Paragraph 4 hereof.
"Taxes" shall have the meaning given to such term in
Subparagraph 5(h).
Unless otherwise defined herein, all other capitalized terms used herein
and defined in the Credit Agreement shall have the respective meanings
given to those terms in the Credit Agreement.
(b) Other Interpretive Provisions. The rules of construction set
forth in Section I of the Credit Agreement shall, to the extent not
inconsistent with the terms of this Guaranty, apply to this Guaranty and
are hereby incorporated by reference.
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<PAGE> 115
2. GUARANTY.
(a) Payment Guaranty. Guarantor unconditionally guarantees and
promises to pay and perform as and when due, whether at stated maturity,
upon acceleration or otherwise, any and all of the Guaranteed
Obligations. If any Debtor Relief Proceeding relating to Borrower is
commenced, Guarantor further unconditionally guarantees and promises to
pay and perform, upon the demand of Agent, any and all of the Guaranteed
Obligations (including any and all Disallowed Post-Commencement Interest
and Expenses) in accordance with the terms of the Credit Documents,
whether or not such obligations are then due and payable by Borrower and
whether or not such obligations are modified, reduced or discharged in
such Debtor Relief Proceeding. This Guaranty is a guaranty of payment
and not of collection.
(b) Continuing Guaranty. This Guaranty is an irrevocable
continuing guaranty of the Guaranteed Obligations which shall continue
in effect until all obligations of Lenders to extend credit to Borrower
have terminated and all of the Guaranteed Obligations have been fully
paid. If any payment on any Guaranteed Obligation is set aside, avoided
or rescinded or otherwise recovered from Agent or any Lender, such
recovered payment shall constitute a Guaranteed Obligation hereunder
and, if this Guaranty was previously released or terminated, it
automatically shall be fully reinstated, as if such payment was never
made.
(c) Independent Obligation. The liability of Guarantor hereunder
is independent of the Guaranteed Obligations, and a separate action or
actions may be brought and prosecuted against Guarantor irrespective of
whether action is brought against Borrower or any other guarantor of the
Guaranteed Obligations or whether Borrower or any other guarantor of the
Guaranteed Obligations is joined in any such action or actions.
(d) Fraudulent Transfer Limitation. If, in any action to enforce
this Guaranty, any court of competent jurisdiction determines that
enforcement against Guarantor for the full amount of the Guaranteed
Obligations is not lawful under or would be subject to avoidance under
Section 548 of the Bankruptcy Code or any applicable provision of any
comparable law of any state or other jurisdiction, the liability of
Guarantor under this Guaranty shall be limited to the maximum amount
lawful and not subject to such avoidance.
(e) Termination. Notwithstanding any termination of this Guaranty
in accordance with Paragraph 3 hereof, this Guaranty shall continue to
be in full force and effect and applicable to any Guaranteed Obligations
arising thereafter which arise because prior payments of Guaranteed
Obligations are rescinded or otherwise required to be surrendered by
Agent or any Lender after receipt.
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<PAGE> 116
3. AUTHORIZATIONS, WAIVERS, ETC.
(a) Authorizations. Guarantor authorizes Agent and Lenders, in
their discretion, without notice to Guarantor, irrespective of any
change in the financial condition of Borrower, Guarantor or any other
guarantor of the Guaranteed Obligations since the date hereof, and
without affecting or impairing in any way the liability of Guarantor
hereunder, from time to time to:
(i) Create new Guaranteed Obligations and renew,
compromise, extend, accelerate or otherwise change the time for
payment or performance of, or otherwise amend or modify the
Credit Documents or change the terms of the Guaranteed
Obligations or any part thereof, including increase or decrease
of the rate of interest thereon;
(ii) Take and hold security for the payment or performance
of the Guaranteed Obligations and exchange, enforce, waive or
release any such security; apply such security and direct the
order or manner of sale thereof; and purchase such security at
public or private sale;
(iii) Otherwise exercise any right or remedy they may have
against Borrower, Guarantor, any other guarantor of the
Guaranteed Obligations or any security, including, without
limitation, the right to foreclose upon any such security by
judicial or nonjudicial sale;
(iv) Settle, compromise with, release or substitute any
one or more makers, endorsers or guarantors of the Guaranteed
Obligations; and
(v) Assign the Guaranteed Obligations, this Guaranty or
the other Credit Documents in whole or in part to the extent
provided in the Credit Agreement and the other Credit Documents.
(b) Waivers. Guarantor hereby waives:
(i) Any right to require Agent or any Lender to (A)
proceed against Borrower or any other guarantor of the Guaranteed
Obligations, (B) proceed against or exhaust any security received
from Borrower, Guarantor or any other guarantor of the Guaranteed
Obligations or otherwise marshall the assets of Borrower,
Guarantor or any other guarantor of the Guaranteed Obligations or
(C) pursue any other remedy in Agent's or any Lender's power
whatsoever;
(ii) Any defense arising by reason of the application by
Borrower of the proceeds of any borrowing;
(iii) Any defense resulting from the absence, impairment
or loss of any right of reimbursement, subrogation, contribution
or other right or remedy of Guarantor against Borrower, any other
guarantor of the Guaranteed Obligations or any security, whether
resulting from an election by Agent or any Lender to foreclose
upon security by nonjudicial sale, or otherwise;
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(iv) Any setoff or counterclaim of Borrower or any defense
which results from any disability or other defense of Borrower or
the cessation or stay of enforcement from any cause whatsoever of
the liability of Borrower (including, without limitation, the
lack of validity or enforceability of any of the Credit
Documents);
(v) Any defense based upon any law, rule or regulation
which provides that the obligation of a surety must not be
greater or more burdensome than the obligation of the principal;
(vi) Until all obligations of Agent or any Lender to
extend credit to Borrower have terminated and all of the
Guaranteed Obligations have been fully paid, any right of
subrogation, reimbursement, indemnification or contribution and
other similar right to enforce any remedy which Agent, Lenders or
any other Person now has or may hereafter have against Borrower
on account of the Guaranteed Obligations, and any benefit of, and
any right to participate in, any security now or hereafter
received by Agent, any Lender or any other Person on account of
the Guaranteed Obligations;
(vii) All presentments, demands for performance, notices
of non-performance, notices delivered under the Credit Documents,
protests, notice of dishonor, and notices of acceptance of this
Guaranty and of the existence, creation or incurring of new or
additional Guaranteed Obligations and notices of any public or
private foreclosure sale;
(viii) The benefit of any statute of limitations to the
extent permitted by law;
(ix) Any appraisement, valuation, stay, extension,
moratorium redemption or similar law or similar rights for
marshalling;
(x) Any right to be informed by Agent or any Lender of the
financial condition of Borrower or any other guarantor of the
Guaranteed Obligations or any change therein or any other
circumstances bearing upon the risk of nonpayment or
nonperformance of the Guaranteed Obligations;
(xi) Until all obligations of Agent or any Lender to
extend credit to Borrower have terminated and all of the
Guaranteed Obligations have been fully paid, any right to revoke
this Guaranty;
(xii) Any defense arising from an election for the
application of Section 1111(b)(2) of the Bankruptcy Code which
applies to the Guaranteed Obligations;
(xiii) Any defense based upon any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code; and
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(xiv) Any right it may have to a fair value hearing to
determine the size of a deficiency judgment following any
foreclosure on any security for the Guaranteed Obligations.
Without limiting the scope of any of the foregoing provisions of this
Paragraph 3, Guarantor hereby further waives (A) all rights and defenses
arising out of an election of remedies by Agent or any Lender, even
though that election of remedies, such as a nonjudicial foreclosure with
respect to security for a Guaranteed Obligation, has destroyed
Guarantor's rights of subrogation and reimbursement against Borrower by
the operation of Section 580d of the California Code of Civil Procedure
or otherwise, (B) all rights and defenses Guarantor may have by reason
of protection afforded to Borrower with respect to the Guaranteed
Obligations pursuant to the antideficiency or other laws of California
limiting or discharging the Guaranteed Obligations, including, without
limitation, Section 580a, 580b, 580d, or 726 of the California Code of
Civil Procedure, and (C) all other rights and defenses available to
Guarantor by reason of Sections 2787 to 2855, inclusive, Section 2899 or
Section 3433 of the California Civil Code or Section 3605 of the
California Commercial Code.
(c) Financial Condition of Borrower, Etc. Guarantor is fully
aware of the financial condition and affairs of Borrower. Guarantor has
executed this Guaranty without reliance upon any representation,
warranty, statement or information concerning Borrower furnished to
Guarantor by Agent or any Lender and has, independently and without
reliance on Agent or any Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of the
financial condition and affairs of Borrower and of other circumstances
affecting the risk of nonpayment or nonperformance of the Guaranteed
Obligations. Guarantor is in a position to obtain, and assumes full
responsibility for obtaining, any additional information about the
financial condition and affairs of Borrower and of other circumstances
affecting the risk of nonpayment or nonperformance of the Guaranteed
Obligations and will, independently and without reliance upon Agent or
any Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own appraisals and
decisions in taking or not taking action in connection with this
Guaranty.
4. SUBORDINATION. Guarantor hereby subordinates any and all debts,
liabilities and obligations owed to Guarantor by Borrower (the "Subordinated
Obligations") to the Guaranteed Obligations as provided in this Paragraph 4.
(a) Prohibited Payments, Etc. Except during the continuance of a
Default (including the commencement and continuation of any Debtor
Relief Proceeding relating to Borrower), Guarantor may receive regularly
scheduled payments from Borrower on account of Subordinated Obligations.
After the occurrence and during the continuance of any Default
(including the commencement and continuation of any Debtor Relief
Proceeding relating to Borrower), however, unless Agent otherwise
agrees, Guarantor shall not demand, accept or take any action to collect
any payment on account of the Subordinated Obligations.
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(b) Prior Payment of Guaranteed Obligations. In any Debtor Relief
Proceeding relating to Borrower, Guarantor agrees that Agent and Lenders
shall be entitled to receive payment of all Guaranteed Obligations
(including any and all Disallowed Post-Commencement Interest and
Expenses) before Guarantor receives payment of any Subordinated
Obligations.
(c) Turn-Over. After the occurrence and during the continuance of
any Default (including the commencement and continuation of any Debtor
Relief Proceeding relating to Borrower), Guarantor shall, if Agent so
requests, collect, enforce and receive payments on account of the
Subordinated Obligations as trustee for Agent and Lenders and deliver
such payments to Agent on account of the Guaranteed Obligations
(including any and all Disallowed Post-Commencement Interest and
Expenses), together with any necessary endorsements or other instruments
of transfer, but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this Guaranty.
(d) Agent Authorization. After the occurrence and during the
continuance of any Default (including the commencement and continuation
of any Debtor Relief Proceeding relating to Borrower), Agent is
authorized and empowered (but without any obligation to so do), in its
discretion, (i) in the name of Guarantor to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and to apply any
amounts received thereon to the Guaranteed Obligations (including any
and all Disallowed Post-Commencement Interest and Expenses), and (ii) to
require Guarantor (A) to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and (B) to pay any amounts received
on such obligations to Agent for application to the Guaranteed
Obligations (including any and all Disallowed Post-Commencement Interest
and Expenses).
5. MISCELLANEOUS.
(a) Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or
upon Guarantor or Agent under this Agreement shall be given as provided
in Paragraph 8.01 of the Credit Agreement.
(b) Payments.
(i) Guarantor shall make all payments of the Guaranteed
Obligations to Agent, or its order, at the office of Agent and at
the times specified in the Credit Documents for the payment of
such Guaranteed Obligations. Guarantor shall make all other
payments hereunder at such office as Agent may designate. Each
payment shall be made in same day or immediately available funds
not later than 11:00 a.m.(local time of the office of Agent at
which such payment is to be made) on the date due.
(ii) Guarantor shall make all payments of the Guaranteed
Obligations hereunder in the currency in which such Guaranteed
Obligations are required to
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be paid by Borrower pursuant to the Credit Documents and shall
make all other payments hereunder in Dollars; provided, however,
that, if Agent shall request Guarantor to pay any amount
hereunder which would otherwise be payable in another currency in
the lawful currency of the United States, Guarantor shall pay to
Agent the Dollar Equivalent of such amount.
(iii) If any sum due from Guarantor under this Guaranty or
any other Credit Document to which Guarantor is a party or any
order, judgment or award given or rendered in relation hereto or
thereto has to be converted from the currency (the "first
currency") in which the same is payable hereunder or thereunder
into another currency (the "second currency") for the purpose of
(A) making or filing a claim or proof against Guarantor with any
Governmental Authority, (B) obtaining an order or judgment in any
court or other tribunal or (C) enforcing any order or judgment
given or made in relation hereto, Guarantor shall, to the fullest
extent permitted by law, indemnify and hold harmless each of the
Persons to whom such sum is due from and against any loss
suffered as a result of any discrepancy between (1) the rate of
exchange used for such purpose to convert the amounts in question
from the first currency into the second currency and (2) the rate
or rates of exchange at which such Person may, using reasonable
efforts in the ordinary course of business, purchase the first
currency with the second currency upon receipt of a sum paid to
it in satisfaction, in whole or in part, of any such order,
judgment, claim or proof. The foregoing indemnity shall
constitute a separate obligation of Guarantor distinct from its
other obligations hereunder and shall survive the giving or
making of any judgment or order in relation to all or any of such
obligations.
(iv) If any amounts required to be paid by Guarantor under
this Guaranty or any order, judgment or award given or rendered
in relation hereto remain unpaid after such amounts are due,
Guarantor shall pay interest on the aggregate, outstanding
balance of such amounts from the date due until those amounts are
paid in full at a per annum rate equal to:
(A) In the case of amounts payable in Dollars, the
Base Rate plus two percent (2.00%), such rate to change
from time to time as the Base Rate shall change.
(B) In the case of amounts payable in Yen, the
Overnight Rate plus three percent (3.00%), such rate to
change from time to time as the Overnight Rate shall
change.
(c) Expenses. Guarantor shall pay promptly upon receipt of an
invoice therefor, (i) all reasonable fees and expenses, including
reasonable attorneys' fees and expenses, incurred by Agent in connection
with the preparation, execution and delivery of, and the exercise of its
duties under, this Guaranty and the preparation, execution and delivery
of amendments and waivers hereunder and (ii) all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by
Agent and Lenders in connection with the enforcement or attempted
enforcement of this Guaranty or any of the
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Guaranteed Obligations or in preserving any of Agent's or Lenders'
rights and remedies (including, without limitation, all such fees and
expenses incurred in connection with any "workout" or restructuring
affecting the Credit Documents or the Guaranteed Obligations or any
bankruptcy or similar proceeding involving Guarantor, Borrower or any of
their affiliates).
(d) Waivers; Amendments. This Guaranty may not be amended or
modified, nor may any of its terms be waived, except by written
instruments signed by Guarantor and Agent. Each waiver or consent under
any provision hereof shall be effective only in the specific instances
for the purpose for which given. No failure or delay on Agent's or any
Lender'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.
(e) Successors and Assigns. This Guaranty shall be binding upon
and inure to the benefit of Agent, Lenders, Guarantor and their
respective successors and assigns; provided, however, that Guarantor may
not assign or transfer any of its rights and obligations under this
Guaranty without the prior written consent of Agent and Lenders, and,
provided, further, that Agent or any Lender may sell, assign and
delegate their respective rights and obligations hereunder only as
permitted by the Credit Agreement. All references in this Guaranty to
any Person shall be deemed to include all permitted successors and
assigns of such Person.
(f) Cumulative Rights, etc. The rights, powers and remedies of
Agent and Lenders under this Guaranty shall be in addition to all
rights, powers and remedies given to Agent and Lenders by virtue of any
applicable law, rule or regulation of any Governmental Authority, the
Credit Agreement, any other Credit Document or any other agreement, all
of which rights, powers, and remedies shall be cumulative and may be
exercised successively or concurrently without impairing Agent's or any
Lender's rights hereunder. Guarantor waives any right to require Agent
or any Lender to proceed against any Person or to exhaust any collateral
or to pursue any remedy in Agent's or such Lender's power.
(g) Setoff; Security Interest.
(i) In addition to any rights and remedies of Lenders
provided by law, each Lender shall have the right, with the prior
consent of Agent but without prior notice to or consent of
Guarantor, any such notice and consent being expressly waived by
Guarantor to the extent permitted by applicable law, upon the
occurrence and during the continuance of an Event of Default, to
set-off and apply against the obligations of Guarantor any amount
owing from such Lender to Guarantor. The aforesaid right of
set-off may be exercised by such Lender against Guarantor or
against any trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, receiver or execution, judgment or
attachment creditor of Guarantor or against anyone else claiming
through or against Guarantor or such trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor,
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notwithstanding the fact that such right of set-off may not have
been exercised by such Lender at any prior time. Each Lender
agrees promptly to notify Guarantor after any such set-off and
application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off
and application.
(ii) As security for the obligations of Guarantor
hereunder, Guarantor hereby grants to Agent and each Lender, for
the benefit of all Lenders, a continuing security interest in any
and all deposit accounts or moneys of Guarantor now or hereafter
maintained with such Lender. Each Lender shall have all of the
rights of a secured party with respect to such security interest.
(h) Payments Free of Taxes. All payments made by Guarantor under
this Guaranty shall be made free and clear of, and without deduction or
withholding for or on account of, all present and future income, stamp,
documentary and other taxes and duties, and all other levies, imposts,
charges, fees, deductions and withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority
(except net income taxes and franchise taxes in lieu of net income taxes
imposed on Agent or any Lender by its jurisdiction of incorporation or
the jurisdiction in which its Applicable Lending Office is located) (all
such non-excluded taxes, duties, levies, imposts, duties, charges, fees,
deductions and withholdings being hereinafter called "Taxes"). If any
Taxes are required to be withheld from any amounts payable to Agent or
any Lender hereunder, the amounts so payable to Agent or such Lender
shall be increased to the extent necessary to yield to Agent or such
Lender (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this
Guaranty or the other Credit Documents, as applicable. Whenever any
Taxes are payable by Guarantor, as promptly as possible thereafter,
Guarantor shall send to Agent for its own account or for the account of
such Lender, as the case may be, a certified copy of an original
official receipt received by Guarantor showing payment thereof. If
Guarantor fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to Agent the required receipts or other
required documentary evidence, Guarantor shall indemnify Agent and
Lenders for any taxes (including interest or penalties) that may become
payable by Agent or any Lender as a result of any such failure. The
obligations of Guarantor under this Subparagraph 5(h) shall survive the
payment and performance of the Guaranteed Obligations and the
termination of this Guaranty. Nothing contained in this Subparagraph
5(h) shall require Agent or any Lender to make available any of its tax
returns (or any other information relating to its taxes which it deems
to be confidential).
(i) 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.
(j) Jury Trial. EACH OF GUARANTOR, LENDERS AND AGENT, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE
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RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS GUARANTY.
(k) Governing Law, Consent to Jurisdiction, Etc.
(i) 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.
(ii) Guarantor irrevocably submits to the non-exclusive
jurisdiction of the courts of the State of California and the
courts of the United States of America located in the Northern
District of California and agrees that any legal action, suit or
proceeding arising out of or relating to this Guaranty or any of
the other Credit Documents may be brought against Guarantor in
any such courts. Final judgment against Guarantor in any such
action, suit or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment, a
certified or exemplified copy of which shall be conclusive
evidence of the judgment, or in any other manner provided by law.
Nothing in this Subparagraph 5(k) shall affect the right of Agent
or any Lender to commence legal proceedings or otherwise sue
Guarantor in any other appropriate jurisdiction, or concurrently
in more than one jurisdiction, or to serve process, pleadings and
other papers upon Guarantor in any manner authorized by the laws
of any such jurisdiction. Guarantor agrees that process served
either personally or by registered mail shall, to the extent
permitted by law, constitute adequate service of process in any
such suit. Without limiting the foregoing, Guarantor hereby
appoints, in the case of any such action or proceeding brought in
the courts of or in the State of California, CT Corporation, with
offices on the date hereof at 818 West Seventh Street, Los
Angeles, California 90017, to receive for it and on its behalf,
service of process in the State of California with respect
thereto, provided Guarantor may appoint any other Person,
reasonably acceptable to Agent, with offices in the State of
California to replace such agent for service of process upon
delivery to Agent of a reasonably acceptable agreement of such
new agent agreeing so to act. Guarantor irrevocably waives to the
fullest extent permitted by applicable law (A) any objection
which it may have now or in the future to the laying of the venue
of any such action, suit or proceeding in any court referred to
in the first sentence above; (B) any claim that any such action,
suit or proceeding has been brought in an inconvenient forum; (C)
its right of removal of any matter commenced by any other party
in the courts of the State of California to any court of the
United States of America; (D) any immunity which it or its assets
may have in respect of its obligations under this Agreement or
any other Credit Document from any suit, execution, attachment
(whether provisional or final, in aid of execution, before
judgment or otherwise) or other legal process; and (E) any right
it may have to require the moving party in any suit, action or
proceeding brought in any of the courts referred to above arising
out of or in connection with this Agreement or any other Credit
Document to post security for the costs of Guarantor or to post a
bond or to take similar action.
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<PAGE> 124
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed as
of the day and year first above written.
LSI LOGIC CORPORATION
By: ____________________________________
Name: ______________________________
Title: _____________________________
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<PAGE> 125
EXHIBIT H
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT, dated as of the Assignment Effective Date set
forth in Attachment 1 hereto, by and among:
(1) The bank designated in Attachment 1 hereto as the Assignor
Lender ("Assignor Lender"); and
(2) Each bank designated in Attachment 1 hereto as an Assignee
Lender (individually, an "Assignee Lender").
RECITALS
A. Assignor Lender is one of the Lenders which is a party to the Credit
Agreement dated as of August 5, 1998, by and among LSI Logic Corporation
("LSI"), LSI Logic Japan Semiconductor, Inc. ("LLJS"), Assignor Lender and the
other financial institutions parties thereto (collectively, the "Lenders") and
ABN AMRO Bank N.V., as agent for Lenders (in such capacity, "Agent"). (Such
credit agreement, as amended, supplemented or otherwise modified in accordance
with its terms from time to time to be referred to herein as the "Credit
Agreement").
B. Assignor Lender wishes to sell, and each Assignee Lender wishes to
purchase, all or a portion of Assignor Lender's rights under the Credit
Agreement pursuant to Subparagraph 8.05(c) of the Credit Agreement.
AGREEMENT
Now, therefore, the parties hereto hereby agree as follows:
1. Definitions. Except as otherwise defined in this Assignment
Agreement, all capitalized terms used herein and defined in the Credit Agreement
have the respective meanings given to those terms in the Credit Agreement.
2. Sale and Assignment. Subject to the terms and conditions of this
Assignment Agreement, Assignor Lender hereby agrees to sell, assign and delegate
to each Assignee Lender and each Assignee Lender hereby agrees to purchase,
accept and assume the rights, obligations and duties of a Lender under the
Credit Agreement and the other Credit Documents with Commitments or Loans equal
to the respective amounts set forth under the caption "Commitments or Loans
Assigned" opposite such Assignee Lender's name on Attachment 1 hereto. Such
sale, assignment and delegation shall become effective on the date designated in
Attachment 1 hereto (the "Assignment Effective Date"), which date shall be,
unless Agent shall otherwise consent, at least five (5) Business Days after the
date following the date counterparts of this Assignment Agreement are delivered
to Agent in accordance with Paragraph 3 hereof.
H-1
<PAGE> 126
3. Assignment Effective Notice. Upon (a) receipt by Agent of five (5)
counterparts of this Assignment Agreement (to each of which is attached a fully
completed Attachment 1), each of which has been executed by Assignor Lender and
each Assignee Lender (and, to the extent required by Subparagraph 8.05(c) of the
Credit Agreement, by Borrowers and Agent) and (b) payment to Agent of the
registration and processing fee specified in Subparagraph 8.05(e) of the Credit
Agreement by Assignor Lender, Agent will transmit to Borrowers, Assignor Lender
and each Assignee Lender an Assignment Effective Notice substantially in the
form of Attachment 2 hereto, fully completed (an "Assignment Effective Notice").
4. Assignment Effective Date. At or before 12:00 noon (New York time for
a U.S. Loan and Tokyo time for a Japanese Loan) on the Assignment Effective
Date, each Assignee Lender shall pay to Assignor Lender, in immediately
available or same day funds, an amount equal to the purchase price, as agreed
between Assignor Lender and such Assignee Lender (the "Purchase Price"), for
each portion of a Commitment or Loan purchased by such Assignee Lender
hereunder. Effective upon receipt by Assignor Lender of each Purchase Price
payable by each Assignee Lender, the sale, assignment and delegation to such
Assignee Lender of such Commitments or Loans as described in Paragraph 2 hereof
shall become effective.
5. Payments After the Assignment Effective Date. Assignor Lender and
each Assignee Lender hereby agree that Agent shall, and hereby authorize and
direct Agent to, allocate amounts payable under the Credit Agreement and the
other Credit Documents as follows:
(a) All principal payments made after the Assignment Effective
Date with respect to each portion of a Loan assigned to an Assignee
Lender pursuant to this Assignment Agreement shall be payable to such
Assignee Lender.
(b) All interest, fees and other amounts accrued after the
Assignment Effective Date with respect to each portion of a Loan
assigned to an Assignee Lender pursuant to this Assignment Agreement
shall be payable to such Assignee Lender.
Assignor Lender and each Assignee Lender shall make any separate arrangements
between themselves which they deem appropriate with respect to payments between
them of amounts paid under the Credit Documents on account of the Commitments or
Loans assigned to such Assignee Lender, and neither Agent nor Borrowers shall
have any responsibility to effect or carry out such separate arrangements.
6. Delivery of Notes. On or prior to the Assignment Effective Date,
Assignor Lender will deliver to Agent any Notes payable to Assignor Lender with
respect to its U.S. Loans. On or prior to the Assignment Effective Date, LSI
will deliver to Agent new Notes for each Assignee Lender and Assignor Lender, in
each case in principal amounts reflecting, in accordance with the Credit
Agreement, their respective U.S. Revolving Commitments or U.S. 364 Day
Commitments, as the case may be (as adjusted pursuant to this Assignment
Agreement). Promptly after the Assignment Effective Date, Agent will send to
each of Assignor Lender and the Assignee Lenders its new Notes and will send to
LSI the superseded Note payable to Assignor Lender, marked "Replaced."
H-2
<PAGE> 127
7. Delivery of Copies of Credit Documents. Concurrently with the
execution and delivery hereof, Assignor Lender will provide to each Assignee
Lender (if it is not already a Lender party to the Credit Agreement) conformed
copies of all documents delivered to Assignor Lender on or prior to the Closing
Date in satisfaction of the conditions precedent set forth in the Credit
Agreement.
8. Further Assurances. Each of the parties to this Assignment Agreement
agrees that at any time and from time to time upon the written request of any
other party, it will execute and deliver such further documents and do such
further acts and things as such other party may reasonably request in order to
effect the purposes of this Assignment Agreement.
9. Further Representations, Warranties and Covenants. Assignor Lender
and each Assignee Lender further represent and warrant to and covenant with each
other, Agent and Lenders as follows:
(a) Other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned hereby free
and clear of any adverse claim, Assignor Lender makes no representation
or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with
the Credit Agreement or the other Credit Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of
the Credit Agreement or the other Credit Documents furnished or any
collateral or any security interest therein.
(b) Assignor Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
Borrowers or any of their obligations under the Credit Agreement or any
other Credit Documents.
(c) Each Assignee Lender confirms that it has received a copy of
the Credit Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement.
(d) Each Assignee Lender will, independently and without reliance
upon Agent, Assignor Lender or any other Lender and based upon such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Credit Agreement and the other Credit Documents.
(e) Each Assignee Lender appoints and authorizes Agent to take
such action as Agent on its behalf and to exercise such powers under the
Credit Agreement and the other Credit Documents as Agent is authorized
to exercise by the terms thereof, together with such powers as are
reasonably incidental thereto, all in accordance with Section VII of the
Credit Agreement.
(f) Each Assignee Lender agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
the Credit Agreement and the other Credit Documents are required to be
performed by it as a Lender.
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<PAGE> 128
(g) Attachment 1 hereto sets forth administrative information
with respect to each Assignee Lender.
10. Effect of this Assignment Agreement. On and after the Assignment
Effective Date, (a) each Assignee Lender shall be a Lender with Commitments or
Loans as set forth under the caption "Commitments or Loans After Assignment"
opposite such Assignee Lender's name on Attachment 1 hereto and shall have the
rights, duties and obligations of such a Lender under the Credit Agreement and
the other Credit Documents and (b) Assignor Lender shall be a Lender with
Commitments or Loans as set forth under the caption "Commitments or Loans After
Assignment" opposite Assignor Lender's name on Attachment 1 hereto and shall
have the rights, duties and obligations of such a Lender under the Credit
Agreement and the other Credit Documents, or, if the Commitments and Loans of
Assignor Lender have been reduced to $0, Assignor Lender shall cease to be a
Lender and shall have no further obligation to make any Loans.
11. Miscellaneous. This Assignment Agreement shall be governed by, and
construed in accordance with, the laws of the State of California. Paragraph
headings in this Assignment Agreement are for convenience of reference only and
are not part of the substance hereof.
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<PAGE> 129
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective duly authorized officers as of the
date set forth in Attachment 1 hereto.
____________________________________, as
Assignor Lender
By: ____________________________________
Name: ______________________________
Title: _____________________________
_________________________________, as an
Assignor Lender
By: ____________________________________
Name: ______________________________
Title: _____________________________
_________________________________, as an
Assignor Lender
By: ____________________________________
Name: ______________________________
Title: _____________________________
_________________________________, as an
Assignor Lender
By: ____________________________________
Name: ______________________________
Title: _____________________________
H-5
<PAGE> 130
CONSENTED TO AND ACKNOWLEDGED BY:
______________________________________
By: __________________________________
Name: ____________________________
Title: ___________________________
ABN AMRO BANK N.V.,
as Agent
By: __________________________________
Name: ____________________________
Title: ___________________________
ACCEPTED FOR RECORDATION
IN REGISTER:
ABN AMRO BANK N.V.,
as Agent
By: __________________________________
Name: ____________________________
Title: ___________________________
H-6
<PAGE> 131
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A
<TABLE>
<CAPTION>
Commitments or Loans Commitments or Loans
Assigned After Assignment
------------------------------------------------ ---------------------------------------------------------
U.S.
U.S. Revolving 364 Day Japanese U.S. Revolving U.S. 364 Day Japanese
Commitment/ Commitment/ Commitment/ Commitment/ Commitment/ Commitment/
Loan Loan Loan Loan Loan Loan
--------------- ---------------- --------------- ----------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Assignor Lender:
-------------- $---------- $---------- (Y)---------- $------------ $----------- (Y)------------
Assignee Lenders:
-------------- $---------- $---------- (Y)---------- $------------ $----------- (Y)------------
-------------- $---------- $---------- (Y)---------- $------------ $----------- (Y)------------
-------------- $---------- $---------- (Y)---------- $------------ $----------- (Y)------------
-------------- $---------- $---------- (Y)---------- $------------ $----------- (Y)------------
</TABLE>
H(1)-1
<PAGE> 132
PART B
[ASSIGNEE PARTICIPANT]
Domestic Lending Office:
Euro-Dollar Lending Office:
Japanese Lending Office:
Address for Notices related to U.S. Borrowings:
Address for Notices related to Japanese Borrowings:
Wiring Instructions for U.S. Borrowings:
Wiring Instructions for Japanese Borrowings:
H(1)-2
<PAGE> 133
PART C
ASSIGNMENT EFFECTIVE DATE ________, ____
H(1)-3
<PAGE> 134
ATTACHMENT 2
TO ASSIGNMENT AGREEMENT
FORM OF
ASSIGNMENT EFFECTIVE NOTICE
Reference is made to the Credit Agreement, dated as of August 5, 1998,
among LSI Logic Corporation ("LSI"), LSI Logic Japan Semiconductor, Inc., the
financial institutions parties thereto (the "Lenders") and ABN AMRO Bank N.V.,
as agent for Lenders (in such capacity, "Agent"). Agent hereby acknowledges
receipt of five executed counterparts of a completed Assignment Agreement, a
copy of which is attached hereto. [Note: Attach copy of Assignment Agreement.]
Terms defined in such Assignment Agreement (whether directly or indirectly by
reference) are used herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that the
Assignment Effective Date will be __________.
[2. Pursuant to such Assignment Agreement, Assignor Lender is required
to deliver to Agent on or before the Assignment Effective Date the Notes payable
to Assignor Lender.]
[3. Pursuant to such Assignment Agreement, LSI is required to deliver to
Agent on or before the Assignment Effective Date the following Notes, each dated
_________________ [Insert appropriate date]:
[Describe each new Note for Assignor Lender and each Assignee Lender as
to principal amount.]]
4. Pursuant to such Assignment Agreement, each Assignee Lender is
required to pay its Purchase Price to Assignor Lender at or before 12:00 Noon [(
time)] on the Assignment Effective Date in immediately available funds.
Very truly yours,
ABN AMRO BANK N.V.,
as Agent
By: ____________________________________
Name: ______________________________
Title: _____________________________
H(2)-1
<PAGE> 135
EXHIBIT I
FORM OF OPINION OF WILSON, SONSINI, GOODRICH & ROSATI
(a) LSI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, is qualified to do business
and is in good standing in the State of California and has all requisite power
and authority to execute, deliver and perform its obligations under the Credit
Documents and the Symbios Acquisition Documents to which it is a party.
(b) The execution, delivery and performance by LSI of the Credit
Documents and the Symbios Acquisition Documents to which it is a party have been
duly authorized by all necessary corporate action of LSI and will not contravene
the terms of the certificate of incorporation and the bylaws of LSI.
(c) The execution, delivery and performance by each Borrower of the
Credit Documents and the Symbios Acquisition Documents to which it is a party
will not (i) to our knowledge, result in a breach of or constitute a default
under any material Contractual Obligation to which either Borrower is a party or
by which it or its properties may be bound or affected or (ii) violate any
provision of Governmental Rule binding on or affecting either Borrower.
(d) The Credit Documents and the Symbios Acquisition Documents
constitute legal, valid and binding obligations of each Borrower which is a
party thereto, enforceable against such Borrower in accordance with their
respective terms, except to the extent the enforceability thereof would be
subject to bankruptcy, insolvency, receivership or similar laws providing relief
from creditors, or principles of equity generally.
(e) No authorization, consent, approval, license, exemption of, or
filing or registration with, any Governmental Authority, or, to our knowledge,
approval or consent of any other Person, is required for the due execution,
delivery or performance by either Borrower of any of the Credit Documents or the
Symbios Acquisition Documents except those set forth on Schedule 4.01(d) which
have been obtained or made and are in full force and effect.
(f) To our knowledge, except as set forth in Schedule 4.01(g), there are
no actions, suits or proceedings pending or threatened against or affecting
either Borrower or any of its Significant Subsidiaries or the properties of such
Borrower or any of its Significant Subsidiaries before any Governmental
Authority or arbitrator which if determined adversely to such Borrower or any
such Significant Subsidiary would be reasonably likely to result in a Material
Adverse Effect.
(g) None of Borrowers and their Significant Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act of 1940, the Interstate Commerce Act, any
state public utilities code or any other Governmental Rule limiting its ability
to incur Indebtedness.
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<PAGE> 136
(h) The use of proceeds from the U.S. Borrowings to consummate the
Symbios Acquisition as provided in Subparagraph 2.01(h) of the Credit Agreement
will not violate Regulation U of the FRB.
I-2
<PAGE> 137
EXHIBIT J
FORM OF OPINION OF JAPANESE COUNSEL
(a) LLJS is a corporation duly organized, validly existing and in good
standing under the laws of Japan and has all requisite power and authority to
execute, deliver and perform its obligations under the Credit Documents to which
it is a party.
(b) The execution, delivery and performance by LLJS of the Credit
Documents to which it is a party have been duly authorized by all necessary
corporate action of LLJS and will not contravene the terms of the articles of
association of LLJS.
(c) The execution, delivery and performance by LLJS of the Credit
Documents to which it is a party will not (i) to our knowledge, result in a
breach of or constitute a default under any material Contractual Obligation to
which LLJS is a party or by which it or its properties may be bound or affected
or (ii) violate any provision of Governmental Rule binding on or affecting LLJS.
(d) The Credit Documents to which LLJS is a party constitute legal,
valid and binding obligations of LLJS, enforceable against LLJS in accordance
with their respective terms, except to the extent the enforceability thereof
would be subject to bankruptcy, insolvency, receivership or similar laws
providing relief from creditors, or principles of equity generally.
(e) No authorization, consent, approval, license, exemption of, or
filing or registration with, any Governmental Authority, or, to our knowledge,
approval or consent of any other Person, is required for the due execution,
delivery or performance by LLJS of any of the Credit Documents to which LLJS is
a party.
(f) To our knowledge, except as set forth in Schedule 4.01(g), there are
no actions, suits or proceedings pending or threatened against or affecting LLJS
or any of its Significant Subsidiaries or the properties of LLJS or any of its
Significant Subsidiaries before any Governmental Authority or arbitrator which
if determined adversely to LLJS or any such Significant Subsidiary would be
reasonably likely to result in a Material Adverse Effect.
(g) The execution and delivery by LLJS of the Credit Documents to which
it is a party are not subject to any stamp duty or other tax, and no deduction
or withholding on account of any taxes of any nature whatsoever is required to
be made from any payment by LLJS under the Credit Documents to which it is a
party.
(h) The obligations of LLJS under the Credit Documents to which it is a
party rank at least pari passu in order of priority with all its other unsecured
obligations.
(i) Neither LLJS nor any of its property has any right of immunity from
jurisdiction, attachment (before or after judgment) or judgment in the courts of
Japan in respect of any action or proceeding relating to the Credit Documents to
which LLJS is a party.
J-1
<PAGE> 138
(j) The courts of Japan will (i) give effect to the choice of the law of
the State of California as the governing law of the Credit Agreement and to
LLJS's submission to jurisdiction and the manner of service of process as
provided in the Credit Agreement and (ii) recognize and enforce any judgment on
or in respect of the Credit Agreement in Japan.
J-2
<PAGE> 1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Media Contact: Kevin Brett
408-433-7150
Investor Contact: Diana Matley August 7, 1998
408-433-4365
CC98-41
LSI LOGIC COMPLETES $760 MILLION SYMBIOS ACQUISITION
MILPITAS, CA - LSI Logic Corporation (NYSE:LSI) and Hyundai Electronics
America (HEA) today announced the completion of LSI Logic's $760 million
purchase of Symbios, Inc.
The strategic acquisition follows the necessary regulatory review by the
Federal Trade Commission.
"Now that the purchase has been completed, we can focus our undivided
attention on increasing the competitive profile of both companies in the global
system-on-a-chip market," said Wilfred J. Corrigan, LSI Logic chairman and chief
executive officer.
"LSI Logic will immediately benefit from Symbios' strength in global
storage markets and its impressive intellectual property offerings, particularly
in SCSI technology," added Corrigan. "Symbios, in turn, will have access to LSI
Logic's leading edge process technology, our global manufacturing facilities,
and our engineering expertise in designing complex single-chip systems for high
volume customers around the world."
During the coming weeks and months, LSI Logic and Symbios management and
employees will work together to develop strategies to
- 6 -
<PAGE> 2
ensure the smooth integration of the combined strengths of the two companies.
The $760 million acquisition of all the outstanding capital stock of
Symbios, including assumed liabilities, payable in cash, is expected to be
accretive to LSI Logic's earnings per share in 1999.
LSI Logic will take an acquisition charge in the third quarter. The
company will report its third quarter results on Thursday, October 22.
Symbios, a private corporation, designs, manufactures, and markets
client/server integrated circuits, cell-based application specific circuits
(ASICs), host adapter boards (HABs), and storage subsystems. Symbios, which had
1997 revenues of $620 million and operating income of $70 million before
non-recurring charges, is a leader in the small computer system interface (SCSI)
chip and the global disk and tape drive electronics markets.
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS: The statements in this news release
relating to future earnings per share, in-process technology writeoffs, and
future benefits of the acquisition, involve known and unknown risks and
uncertainties, which may cause LSI Logic's actual results in future periods to
be materially different from any performance suggested in this release. Such
factors may include, but may not necessarily be limited to fluctuations in
customer demand, both in timing and volumes, and in currency exchange rates.
Also, the company's ability to have available amount of production capacity in a
timely manner can significantly impact the company's financial performance. The
timing of new technology and product introductions and risk of early
obsolescence are also important factors. Further, the company operates in an
industry sector where securities values are highly volatile and may be
influenced by economic and other factors beyond the company's control. In the
context of forward-looking information provided in this news release, reference
is made to the discussion of risk factors detailed in the company's filings with
the Securities and Exchange Commission during the past 12 months.
<PAGE> 3
LSI Logic Corporation (NYSE:LSI), The System on a Chip Company(R), is a leading
supplier of custom high-performance semiconductors with operations worldwide.
The company enables customers to build complete systems on a single chip with
its CoreWare(R) design program, thereby increasing performance, lowering system
costs and accelerating time to market. LSI Logic develops application-optimized
products in partnership with trendsetting customers and operates leading edge,
high-volume manufacturing facilities to promote submicron chips. The company
maintains a high level of quality, as demonstrated by its ISO 9000
certifications. LSI Logic is headquartered at 1551 McCarthy Blvd., Milpitas,
California 95035, 408-433-8000, www.lsilogic.com.
Hyundai Electronics America, headquartered in San Jose, California, is a U.S.
subsidiary of Hyundai Electronics Industries Co., Ltd. based in Seoul, Korea.
Symbios, Inc., headquartered in Fort Collins, Colorado, creates solutions for
moving and storing information. Symbios focuses on developing partnerships with
its customers, including original equipment manufacturers and resellers in the
storage, server, peripherals, and communications markets.
