<PAGE> 1
THIS IS A CONFIRMING EDGAR FILING OF A SCHEDULE 13D ORIGINALLY
FILED WITH THE SEC ON FEBRUARY 14, 1994 (REGISTRATION
FILE NUMBER 5-36712) IN PAPER FORM.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
MAXTOR CORPORATION
------------------
(Name of Issuer)
Common Stock, par value US$0.01 per share
-----------------------------------------
(Title of Class of Securities)
577729 10 6
--------------
(CUSIP Number)
Kwang Koo Kim
Corporate Planning and Coordination Office
Hyundai Electronics Industries Co., Ltd.
San 136-1, Ami-ri, Bubai-eub
Ichon-kun, Kyoungki-do,
467-860 Korea
011-82-336-30-2611
with a copy to:
Baek Sun Kim
Legal Department
Hyundai Electronics Industries Co., Ltd.
66, Jeokseon-dong, Chongro-ku
Seoul, Korea
011-82-2-398-4535
-----------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 3, 1994
-----------------------------------
(Date of Event which requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of this Schedule
13D, and is filing this Statement because of Rule 13d-1(b)(3) or (4), check the
following box: [ ]
Check the following box if a fee is being paid with the
statement: [ ]
Exhibit Index on Page 21
1 Page 1 of 194
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 577729 10 6 Page 2 of 194 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Hyundai Electronics Industries Co., Ltd.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
BK
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [x]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Korea
NUMBER OF 7 SOLE VOTING POWER
SHARES 5,844,000 consisting of 5,844,000 shares issuable
upon conversion of 5,844,000 shares of Class A
Common Stock
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH None
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
5,844,000 consisting of 5,844,000 shares issuable
upon conversion of 5,844,000 shares of Class A
Common Stock
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,844,000 consisting of 5,844,000 shares issuable upon conversion
of 5,844,000 shares of Class A Common Stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%
14 TYPE OF REPORTING PERSON
CO
SEE INSTRUCTIONS BEFORE FILLING OUT
Include both sides of the cover page, responses to items 1-7
(including Exhibits) of the Schedule and the Signature Attestation
2 Page 2 of 194
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 577729 10 6 Page 3 of 194 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Hyundai Heavy Industries Co., Ltd.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
BK
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Korea
NUMBER OF 7 SOLE VOTING POWER
SHARES 4,870,000 consisting of 4,870,000 shares issuable
upon conversion of 4,870,000 shares of Class A
Common Stock
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH None
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
4,870,000 consisting of 4,870,000 shares issuable
upon conversion of 4,870,000 shares of Class A
Common Stock
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,870,000 consisting of 4,870,000 shares issuable upon conversion
of 4,870,000 shares of Class A Common Stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.1%
14 TYPE OF REPORTING PERSON
CO
SEE INSTRUCTIONS BEFORE FILLING OUT
Include both sides of the cover page, responses to items 1-7
(including Exhibits) of the Schedule and the Signature Attestation
3 Page 3 of 194
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 577729 10 6 Page 4 of 194 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Hyundai Corporation
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
BK
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Korea
NUMBER OF 7 SOLE VOTING POWER
SHARES 4,870,000 consisting of 4,870,000 shares issuable
upon conversion of 4,870,000 shares of Class A
Common Stock
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH None
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
4,870,000 consisting of 4,870,000 shares issuable
upon conversion of 4,870,000 shares of Class A
Common Stock
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,870,000 consisting of 4,870,000 shares issuable upon conversion
of 4,870,000 shares of Class A Common Stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.1%
14 TYPE OF REPORTING PERSON
CO
SEE INSTRUCTIONS BEFORE FILLING OUT
Include both sides of the cover page, responses to items 1-7
(including Exhibits) of the Schedule and the Signature Attestation
4 Page 4 of 194
<PAGE> 5
SCHEDULE 13D
CUSIP NO. 577729 10 6 Page 5 of 194 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Hyundai Merchant Marine Co., Ltd.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
BK
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [x]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Korea
NUMBER OF 7 SOLE VOTING POWER
SHARES 3,896,000 consisting of 3,896,000 shares issuable
upon conversion of 3,896,000 shares of Class A
Common Stock
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH None
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
3,896,000 consisting of 3,896,000 shares issuable
upon conversion of 3,896,000 shares of Class A
Common Stock
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,896,000 consisting of 3,896,000 shares issuable upon conversion
of 3,896,000 shares of Class A Common Stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.6%
14 TYPE OF REPORTING PERSON
CO
SEE INSTRUCTIONS BEFORE FILLING OUT
Include both sides of the cover page, responses to items 1-7
(including Exhibits) of the Schedule and the Signature Attestation
5 Page 5 of 194
<PAGE> 6
Item 1. Security and Issuer.
This statement relates to the Common Stock, par value US $0.01 per
share (the "Common Stock"), of Maxtor Corporation, a Delaware corporation (the
"Company"), which has its principal executive offices at 211 River Oaks
Parkway, San Jose, California 95134.
Item 2. Identity and Background.
(a)-(f) The names of the persons filing this statement are:
Hyundai Electronics Industries Co., Ltd., a Korean corporation
("HEI"),
Hyundai Heavy Industries Co., Ltd., a Korean corporation
("HHI"),
Hyundai Corporation, a Korean corporation ("HC"), and
Hyundai Merchant Marine Co., Ltd., a Korean corporation
("HMM").
Each of HEI, HHI, HC and HMM is herein called a "Purchaser."
HEI is engaged in the business of designing, manufacturing, assembling
and marketing semiconductors, information systems, telecommunications
equipment, automation electronics and other electronic equipment and
instruments.
HHI is engaged in the business of ship building, the development and
manufacture of heavy equipment such as offshore oil wells and gas turbine
engines, and the design and construction of electric and nuclear power plants.
HC is a general trading company selling consumer and other
manufactured goods, textiles and raw materials. HC principally trades for
members of the affiliated Hyundai group companies although, in some cases, HC
may sell goods of non-affiliated companies.
HMM is in the business of shipping and freight forwarding, principally
of containers and automobiles between South Korea and the United States.
(b) The address of the principal business and of the principal office
of HEI is San 136-1, Ami-ri, Bubal-eub, Ichon-kun, Kyoungki-do, Korea. The
address of the principal business and of the principal office of HHI is 1,
Cheonha-dong, Ulsan, Kyungnam, Korea. The address of the principal business
and of the principal office of HC is 140-2, Kye-dong, Chongro-ku, Seoul, Korea.
The address of the principal business and of the principal office of HMM is 96,
Mukyo-dong, Chung-ku, Seoul, Korea.
6 Page 6 of 194
<PAGE> 7
(a)-(c), (f) The name, business address, present principal occupation
or employment, the name, principal business and address of any corporation or
other organization in which such employment is conducted and the citizenship of
each executive officer and each person carrying out a function similar to that
of a director in a United States corporation of each of the Purchasers are set
forth in Schedule I hereto.
(d)-(e) During the last five years, none of the Purchasers nor, to
the best of their knowledge, any of their respective executive officers,
persons carrying out a function similar to that of a director in a United
States corporation or controlling persons has been convicted in a criminal
proceeding (excluding traffic violations and similar misdemeanors) or has been
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws, except as follows:
Mong Hun Chung - On August 14, 1992, the Criminal District Court,
Seoul, Korea, entered a sentence of 3 years' imprisonment, suspended for 5
years, and a fine of 12 billion Korean won and a penalty surcharge of 13.4
billion Korean won, against Mr. Chung. The related convictions were based on
(i) alleged improper accounting by HMM, resulting in underpayment of its Korean
income tax, and (ii) non-Korean borrowings by a non-Korean subsidiary of HMM
without prior approval of Korean foreign exchange control authorities. Under a
change in law effective September 1, 1992, such approval is no longer required.
An appeal of the convictions is pending in the High Court of Seoul, Korea. Mr.
Chung views the prospects for his appeal favorably.
Joo Yong Kim - On June 4, 1993, the Criminal District Court, Seoul,
Korea, entered a sentence of 10 months' imprisonment, suspended for 2 years,
against Mr. Kim. The related convictions were based on allegations that HEI
offered entertainment for its employees, employee family members and suppliers
for the purpose of supporting a political candidate rather than for business
purposes. An appeal of the convictions is pending in the High Court of Seoul,
Korea. In addition, a petition to declare the statutes under which the
convictions were entered invalid under the
7 Page 7 of 194
<PAGE> 8
Constitution of the Republic of Korea is pending in the Constitutional Court,
Seoul. Mr. Kim views the prospects for his appeal and petition favorably.
Se Yong Park - On August 14, 1992, the Criminal District Court, Seoul,
Korea, entered a sentence of 3 years' imprisonment, suspended for 4 years,
against Mr. Park. The related conviction was based on alleged improper
accounting by HMM, resulting in underpayment of its Korean income tax. An
appeal of the conviction is pending in the High Court of Seoul, Korea. Mr.
Park views the prospects for his appeal favorably.
Kyung Hee Choi - On August 14, 1992, the Criminal District Court,
Seoul, Korea, entered a sentence of 2 and 1/2 years' imprisonment, suspended for
3 years, against Mr. Choi. The related conviction was based on alleged
improper accounting by HMM, resulting in underpayment of its Korean income tax.
An appeal of the conviction is pending in the High Court of Seoul, Korea. Mr.
Choi views the prospects for his appeal favorably.
Item 3. Source and Amount of Funds or Other Consideration.
The sources and amounts of funds used to pay for the Purchased Shares
were as follows:
<TABLE>
<S> <C> <C>
HEI: Funds borrowed from US$44,998,800
The Nippon Credit Bank, Limited,
Los Angeles Agency
HHI: Funds borrowed from US$37,499,000
American Express Bank Ltd.
HC: Funds borrowed from US$37,499,000
American Express Bank Ltd.
HMM: Funds borrowed from US$29,999,200
The Nippon Credit Bank, Limited,
Los Angeles Agency
</TABLE>
Item 4. Purpose of Transaction.
(a)-(j) The Purchasers purchased an aggregate of 19,480,000 shares
(the "Purchased Shares") of the Company s Class A Common Stock, par value U.S.
$0.01 per share (the "Class A Common Stock") from the Company on the date set
forth on the cover page hereof (the "Closing Date") pursuant to a stock
purchase agreement (the "Stock Purchase Agreement") dated September 10, 1993.
The Stock Purchase Agreement is attached hereto as Exhibit 1, and is
8 Page 8 of 194
<PAGE> 9
incorporated herein in its entirety. Pursuant to the Stock Purchase Agreement,
the Company amended and restated its certificate of incorporation effective on
the Closing Date. Such amended and restated certificate of incorporation is
herein called the "Restated Certificate." The form of the Restated Certificate
is attached to the Stock Purchase Agreement as Exhibit B. The Purchased Shares
constitute all the outstanding shares of Class A Common Stock.
Under the Restated Certificate, the holders of Class A Common Stock
are entitled to nominate a proportionate number of directors of the Company's
Board of Directors, according to the proportion of the Company's outstanding
voting shares which the outstanding Class A Common Stock represents. While
this nomination right is in effect, the balance of the nominees for directors
will be selected by the Company's Board of Directors, provided that the vote in
favor of such other nominees must include the vote of at least a majority of
the directors not nominated by the Class A Common Stock. The Purchasers have
agreed in the Stock Purchase Agreement that so long as this nomination right is
in effect, they will vote the shares of Class A Common Stock and Common Stock
held by them in favor of the directors nominated in accordance with the
foregoing procedure.
Pursuant to the Stock Purchase Agreement, on February 3, 1994, the
Purchasers nominated Mong Hun Chung, C.S. Park and In Baik Jeon as directors of
the Company. Mon Hun Chung is the Chairman and a Representative Director of
HEI. C.S. Park is a Senior Vice President of HEI and the President and Chief
Executive Officer of Axil Workstations, a division of HEI's subsidiary, Hyundai
Electronics America. In Baik Jeon is Vice President, Corporate Planning and
Coordination Office of HEI. On February 7, 1994, the Company's Board of
Directors increased the authorized number of directors from 5 to 8, and elected
the individuals so nominated as directors of the Company.
The nomination right of the Class A Common Stock is suspended during
any period (subject to 90 days advance notice from the Company) when the
holders of Class A Common Stock do not hold either (a) at least 15,584,000
shares (as presently constituted) of Class A Common Stock and/or Common Stock
issued on conversion of Class A Common Stock, or (b) 20% by voting power of the
Company's outstanding voting stock.
Under the Restated Certificate, the Board of Directors of the Company
must elect as the Chairman of the Board, from the directors then serving, the
director designated by the holders of a
9 Page 9 of 194
<PAGE> 10
majority of the Class A Common Stock. This right terminates if the holders of
Class A Common Stock (after 90 days notice from the Company) do not hold
either (a) at least 15,584,000 shares (as presently constituted) of Class A
Common Stock, or (b) at least 11,688,000 shares (as presently constituted) of
Class A Common Stock provided such shares of Class A Common Stock, together
with any other shares of voting stock then held by the holders thereof,
constitute at least 20% by voting power of the Company's outstanding voting
stock.
Pursuant to the Stock Purchase Agreement, the Purchasers on February
3, 1994 nominated Mong Hun Chung as Chairman of the Board of the Company. On
February 7, 1994, the Company's Board of Directors elected Mong Hun Chung to
such position.
The approval of a majority of the Class A Common Stock is required in
order for the Company to terminate, acquire or commence certain core lines of
business (as defined in the Restated Certificate), incur obligations to make
aggregate capital expenditures in any fiscal year in excess of $80,000,000,
make any decision respecting the location of certain new high-volume
manufacturing facilities, enter into a joint venture (as defined in the
Restated Certificate) with an initial contribution worth U.S. $5,000,000 or
more, grant certain material licenses for intellectual property owned by the
Company (as specified in Restated Certificate), enter into a written contract
with specified executive officers with a fixed employment term or termination
benefits not generally available to the Company's employees, consummate a
Corporate Sale (as defined in the Restated Certificate) prior to the fifth
anniversary of the Closing Date, consummate a Corporate Sale after such fifth
anniversary unless the holders of Class A Common Stock are given certain rights
specified in the Restated Certificate to consummate a Corporate Sale on similar
terms, create or issue stock senior to common stock or carrying rights
different from or in addition to the rights of the Common Stock or enter into
any transaction involving the issuance of securities (or rights to acquire
securities) carrying 20% or more of the outstanding voting stock. In the Stock
Purchase Agreement, the Purchasers have agreed that they will not unreasonably
withhold such approval.
The foregoing approval rights terminate if the holders of Class A
Common Stock (after 90 days' notice from the Company) do not hold either
(a) 19,480,000 shares (as presently constituted) of Class A Common Stock and/or
Common Stock issued upon conversion thereof (less
10 Page 10 of 194
<PAGE> 11
up to 80,000 of such shares whose transfer or surrender is required by law)
provided such shares, together with any other shares of voting stock then held
by the holders thereof, constitute at least 20% by voting power of the
Company's outstanding voting stock or (b) at least 30% by voting power of the
Company's outstanding voting stock.
The Purchasers have agreed in the Stock Purchase Agreement not to
engage in any proxy solicitation so long as the foregoing approval rights
remain in effect, except in connection with an offer to purchase additional
shares in accordance with the Standstill Provisions summarized below, or unless
the Purchasers and their respective affiliates hold at least a majority of the
aggregate outstanding Common Stock and Class A Common Stock and have not
acquired any of the Company's capital stock in breach of the Standstill
Provisions.
The Class A Common Stock is convertible at any time at the option of
the holder into an equal number of shares of Common Stock, subject to
adjustment on the occurrence of certain events. In the Stock Purchase
Agreement, the Purchasers have agreed not to transfer any Class A Common Stock
to a non-affiliate without prior conversion into Common Stock. Under the
Restated Certificate, any shares of Class A Common Stock purported to be
transferred to a non-affiliate of a Purchaser will automatically convert into
Common Stock.
The Stock Purchase Agreement provides that each Purchaser (and any
affiliate of a Purchaser) may purchase additional shares of the Company's
capital stock, without any further approval of the Company's Board of
Directors, only under the following circumstances: (a) to maintain the
Purchasers' collective percentage ownership interest, (b) to increase its
percentage ownership, as long as the purchase will not cause the Company to
lose a material benefit under its net operating loss carryforward and as long
as the aggregate resulting percentage interest of all Purchasers (and their
respective affiliates) does not exceed 45%, (c) in a tender or exchange offer
by any or all Purchasers (or an affiliate) for all the Company's outstanding
Common Stock solely for cash or marketable securities, provided the purchase
price has been approved by a majority of the disinterested directors following
negotiations conducted in good faith, or in the open market following such a
tender or exchange offer if, upon its closing, the Purchasers and their
respective affiliates collectively hold at least 80% of the aggregate Common
Stock and Class A Common Stock
11 Page 11 of 194
<PAGE> 12
then outstanding, or (d) in the open market if both (i) a third party makes a
tender or exchange offer for 40% or more of the outstanding shares or
accumulates more than 20% of the outstanding shares and (ii) the Company's
Board of Directors has redeemed the rights outstanding under its Rights
Agreement dated January 27, 1988, as amended, or modified or waived such Rights
Agreement or failed to renew it on substantially the same terms upon its
expiration. The provisions described in this paragraph and in the immediately
following paragraph are herein called the "Standstill Provisions."
The approval of the Company's Board of Directors is required for all
other purchases by the Purchasers and their affiliates until August 18, 2000
or, if sooner (i) six months after the Purchasers collectively own less than
20% of the voting power in the Company or (ii) upon any material breach by the
Company of the rights accorded to the Class A Common Stock in the Restated
Certificate or of the Pro Rata Purchase Right described in the immediately
following paragraph.
The Company has agreed in the Stock Purchase Agreement that it will
notify all Purchasers of any proposed issuance of its capital stock or options,
warrants, securities or other rights exercisable or convertible for or into its
capital stock, and afford them the right to purchase a proportionate share of
such issuance, based on their respective holdings of Common Stock and/or Class
A Common Stock and the total amount of Common Stock and Class A Common Stock
then outstanding. A Purchaser may accept such offer within 60 days after the
Company's notice, subject to extension by up to 60 additional days if required
for any necessary governmental approval. This pro rata purchase right does not
apply to employee or director stock plans, issuances to acquire a business,
issuances upon conversion of the Company's 5.75% Convertible Subordinated
Debentures due March 1, 2012 or any issuance made at a time when the director
nomination right summarized above is not in effect. The right of Pro Rata
Purchase described in this paragraph is herein called the "Pro Rata Purchase
Right."
The Company has agreed to cooperate where feasible with the Purchasers
on research and development, marketing and manufacturing matters, including
involving members of the Purchasers' staffs in future product and manufacturing
development efforts and providing the Purchasers and their affiliates the
opportunity to participate on a most-favored supplier basis in supplying
12 Page 12 of 194
<PAGE> 13
components for use in the Company's products, such as DRAMs and SRAMs and in
providing subcontract manufacturing services. Such cooperation will include,
among other things, entering into royalty-free cross-licenses or exchanges
relating to patents for disk drive components and, subject to the consent of
Kubota Corporation (the Company's partner in Maxoptix Corporation), relating to
magneto-optical disk drives; and such other cooperation on technical and
marketing matters as is mutually agreed upon. In addition, the Company will
supply disk drives to HEI for use in its systems on a most-favored customer
basis.
The Company has also agreed to appoint as an executive officer with a
mutually agreed title one of the directors nominated by the Purchasers who will
be included in ongoing senior management reporting and discussion, and to
arrange for employee exchanges, where appropriate on mutually agreed upon
terms.
The Company has agreed to register shares of Common Stock issued or
issuable on conversion of Class A Common Stock on the terms specified in the
Stock Purchase Agreement.
The Purchasers intend to review on a continuing basis their investment
in the Company and, depending on their evaluation of their cooperative efforts
with the Company and the Company's business, operations, financial needs and
prospects and upon market and economic conditions, the Purchasers may determine
to increase (through exercise of the Pro Rata Purchase Right or, subject to the
Standstill Provisions, open market or privately negotiated transactions or
otherwise) or continue to hold the Purchased Shares as an investment or dispose
of some or all of them.
Except as set forth in this Item 4 and Item 6 hereof, none of the
Purchasers nor, to the best of their knowledge, any of their respective
executive officers, persons carrying out a function similar to that of a
director in a United States corporation or controlling persons, has any plans
or proposals which relate to or which would result in any of the actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) The Purchasers may be deemed to beneficially own (as that term is
defined in Rule 13d-3) an aggregate of 19,480,000 shares of Common Stock,
representing 39.8% of the total number of shares of Common Stock outstanding
(based upon the total number of shares outstanding on
13 Page 13 of 194
<PAGE> 14
February 4, 1994 as set forth in the Company's quarterly report on Form 10-Q
for the period ended December 25, 1993, increased by the shares subject to
conversion of all the Purchased Shares), consisting of the following:
(i) 5,844,000 shares of Common Stock which HEI has the right
to acquire upon conversion of the 5,844,000 shares of Class A Common Stock
it purchased pursuant to the Stock Purchase Agreement,
(ii) 4,870,000 shares of Common Stock which HHI has the right
to acquire upon conversion of the 4,870,000 shares of Class A Common Stock
it purchased pursuant to the Stock Purchase Agreement,
(iii) 4,870,000 shares of Common Stock which HC has the right to
acquire upon conversion of the 4,870,000 shares of Class A Common Stock it
purchased pursuant to the Stock Purchase Agreement, and
(iv) 3,896,000 shares of Common Stock which HMM has the right to
acquire upon conversion of the 3,896,000 shares of Class A Common Stock it
purchased pursuant to the Stock Purchase Agreement.
The separately-calculated percentage beneficially owned (as that term is
defined by Rule 13d-3) by each Purchaser, based on such total number of shares
outstanding on February 4, 1994 increased only by the shares subject to
conversion of such Purchaser's (and no other Purchaser's) Purchased Shares is
16.5% (HEI), 14.1% (HHI), 14.1% (HC) and 11.6% (HMM). Because Rule
13d-3(d)(1)(i) provides for such multiple separate calculations, these
percentages are set forth in Item 13 of the cover page (pages 2-5) of this
statement.
Pursuant to the Company's 1986 Outside Directors Stock Option Plan,
Mong Hun Chung was granted an option to purchase 15,000 shares of Common Stock
upon his appointment to the Company's Board of Directors on February 7, 1994.
Such option is exercisable, at a price per share of Common Stock of US$6.0625,
as to 3/48 of the shares subject thereto after 3 months' service as a director
and as to 1/48 of such shares for each full month of continuous service
thereafter, and expires on February 7, 2004.
14 Page 14 of 194
<PAGE> 15
Except as set forth in this Item 5(a), none of the Purchasers nor, to
the best of their knowledge, any of their respective executive officers,
persons carrying out a function similar to that of a director in a United
States corporation or controlling person, beneficially owns any shares of
Common Stock.
(b) Each Purchaser has sole voting and dispositive power with respect
to Common Stock beneficially owned by it, as stated in Item 5(a) hereof.
(c) Except as described in Item 5(a) hereof with respect to the
purchase of the Purchased Shares pursuant to the Stock Purchase Agreement, none
of the Purchasers nor, to the best of their knowledge, any of their respective
executive officers, persons carrying out a function similar to that of a
director in a United States corporation or controlling persons have effected
any transactions in shares of Common Stock during the past sixty days.
(d) None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Item 4 hereof is hereby incorporated in its entirety into this Item 6.
The Purchasers have informally agreed among themselves to act together
with respect to the acquisition, holding, voting and disposing of equity
securities of the Company. Such agreement has not been reduced to written
form, and is terminable as to any Purchaser at any time at the election of such
Purchaser. Pursuant to such informal agreement, HHI, HC and HMM have each
granted a revocable power of attorney with respect to the voting of shares of
Class A Common Stock held by it to Joo Yong Kim, the President and a
Representative Director of HEI. Copies of such powers of attorney are attached
hereto as Exhibits 6, 7 and 8.
Except as set forth or incorporated by reference in this Item 6, none
of the Purchasers nor, to the best of their knowledge, any of their respective
executive officers, persons carrying out a function similar to that of a
director in a United States corporation or controlling person, has any
contracts, arrangements, understandings or relationships (legal or otherwise),
with any person with respect to any securities of the Company, including, but
not limited to, those enumerated in Item 6 of Schedule 13D.
15 Page 15 of 194
<PAGE> 16
Item 7. Material to be Filed as Exhibits.
Exhibit 1: Stock Purchase Agreement dated September 10, 1993
among the Company and the Purchasers.
Exhibit 2: Loan Agreement among HEI, HMM and The Nippon Credit
Bank, Limited, Los Angeles Agency dated as of January
28, 1994.
Exhibit 3: Loan Agreement between HHI and American Express Bank
Ltd. dated as of January 28, 1994.
Exhibit 4: Loan Agreement between HC and American Express Bank
Ltd. dated as of January 28, 1994.
Exhibit 5: Joint Filing Agreement, dated February 3, 1994 among
the Purchasers.
Exhibit 6: Power of Attorney -- HHI
Exhibit 7: Power of Attorney -- HC
Exhibit 8: Power of Attorney -- HMM
16 Page 16 of 194
<PAGE> 17
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: February 14, 1994 HYUNDAI ELECTRONICS INDUSTRIES CO., LTD.
By: /s/ Joo Yong Kim
--------------------------------------
JOO YONG KIM
President and Representative Director
Date: February 14, 1994 HYUNDAI HEAVY INDUSTRIES CO., LTD.
By: /s/ Joo Yong Kim
--------------------------------------
JOO YONG KIM
Attorney-in-Fact
Date: February 14, 1994 HYUNDAI CORPORATION
By: /s/ Joo Yong Kim
--------------------------------------
JOO YONG KIM
Attorney-in-Fact
Date: February 14, 1994 HYUNDAI MERCHANT MARINE CO., LTD.
By: /s/ Joo Yong Kim
--------------------------------------
JOO YONG KIM
Attorney-in-Fact
17 Page 17 of 194
<PAGE> 18
Schedule I
1. HEI. The following table sets forth the name of each executive
officer of HEI and each person carrying out a function in HEI similar to that
of a director in a United States corporation. The position(s) stated with HEI
for each individual constitutes that individual's present principal occupation
or employment. Each is a citizen of the Republic of Korea. The business
address of each individual is San 136-1, Ami-ri, Bubal-eub, Ichon-kun,
Kyoungki-do, Korea.
<TABLE>
<CAPTION>
Name Office Held
---- -----------
<S> <C>
Mong Hun Chung Chairman and Representative Director
Joo Yong Kim President and Representative Director
Dong Sik Kim Executive Vice President, Industrial Electronics Sector
Kyung Hee Choi Executive Vice President, Administration Division
Kye Hwan Oh Executive Vice President, Memory Business Division
Y.Y. Rah Executive Vice President
</TABLE>
2. HHI. The following table sets forth the name of each executive
officer of HHI and each person carrying out a function in HHI similar to that
of a director in a United States corporation. The position(s) stated with HHI
for each individual constitutes that individual's present principal occupation
or employment. Each is a citizen of the Republic of Korea. The business
address of each individual is 1, Cheonha-dong, Ulsan, Kyungnam, Korea.
<TABLE>
<CAPTION>
Name Office Held
---- -----------
<S> <C>
Jung Kook Kim President and Representative Director
Soo Sik Kwon Executive Vice President, Engine Division
Ju Yeong Kim Executive Vice President, Plant Division
Jeong Nam Lee Executive Vice President, Ship-Building Division
Jong Seo Han Executive Vice President, Head of Seoul Office
Yeong Gi Lee Senior Vice President, Financing and Administration
</TABLE>
18 Page 18 of 194
<PAGE> 19
3. HC. The following table sets forth the name of each executive
officer of HC and each person carrying out a function in HC similar to that of
a director in a United States corporation. The position(s) stated with HC for
each individual constitutes that individual's present principal occupation or
employment. Each is a citizen of the Republic of Korea. The business address
of each individual is 140-2, Kye-dong, Chongro-ku, Seoul, Korea.
<TABLE>
<CAPTION>
Name Office Held
---- -----------
<S> <C>
Choon Lim Lee Chairman
Se Yong Park President and Representative Director
Chung Il Chung Executive Vice President
Kang Soo Choo Executive Vice President, Energy and Resources Division
Won Jin Park Vice President, Managerial Administration Division
</TABLE>
19 Page 19 of 194
<PAGE> 20
4. HMM. The following table sets forth the name of each executive
officer of HMM and each person carrying out a function in HMM similar to that
of a director in a United States corporation. Except as otherwise indicated,
the position(s) stated with HMM for each individual constitutes that
individual's present principal occupation or employment. Each is a citizen
of the Republic of Korea. The business address of each individual is 96,
Mukyo-dong, Chung-ku, Seoul, Korea.
<TABLE>
<CAPTION>
Present Principal Occupation
Name Office Held or Employment
---- ----------- ----------------------------
<S> <C> <C>
Yung Won Hyun Chairman
Mong Hun Chung Vice Chairman Chairman and Representative Director
of HEI
Se Yong Park President and Representative
Officer
Young Woo Yoon Executive Vice President, Bulk
Carrier Business Division
Ik Sang Moon Executive Vice President, Container
Business Division
Dong Kook Chang Senior Vice President, Managerial
Administration Division
</TABLE>
Principal business and address of corporations
The principal businesses and addresses of HEI, HHI, HC and HMM are set
forth in Item 2 of this statement.
20 Page 20 of 194
<PAGE> 21
Exhibit Index
<TABLE>
<CAPTION>
Page No. in
Sequentially
Exhibit No. Description of Exhibit Numbered Copy
- ----------- ---------------------- -------------
<S> <C> <C>
Exhibit 1: Stock Purchase Agreement 22
dated September 10, 1993 among
the Company and the Purchasers.
Exhibit 2: Loan Agreement among HEI, HMM and 84
The Nippon Credit Bank, Limited,
Los Angeles Agency dated as of
January 28, 1994.
Exhibit 3: Loan Agreement between HHI and 115
American Express Bank Ltd. dated as
of January 28, 1994.
Exhibit 4: Loan Agreement between HC and 149
American Express Bank Ltd. dated as
of January 28, 1994.
Exhibit 5: Joint Filing Agreement, dated 185
February 3, 1993 among the Purchasers.
Exhibit 6: Power of Attorney -- HHI 186
Exhibit 7: Power of Attorney -- HC 189
Exhibit 8: Power of Attorney -- HMM 192
</TABLE>
21 Page 21 of 194
<PAGE> 22
Exhibit 1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement dated September 10, 1993 is
entered into among HYUNDAI ELECTRONICS INDUSTRIES CO., LTD., a Korean
corporation ("HEI"), HYUNDAI HEAVY INDUSTRIES CO., LTD., a Korean corporation,
HYUNDAI CORPORATION, a Korean corporation, and HYUNDAI MERCHANT MARINE CO.,
LTD., a Korean corporation, (collectively, the "Purchasers"), and MAXTOR
CORPORATION, a Delaware corporation ("Maxtor").
Maxtor develops, manufactures and markets disk drive products
for personal computers, workstations, notebooks and mobile computing devices.
The Purchasers desire to purchase 19,480,000 shares of Class A common stock of
Maxtor (the "Shares") and Maxtor desires to sell the Shares to the Purchasers
on the terms and conditions set forth herein. Capitalized terms used herein
are defined as set forth in Section 10.
SECTION 1. PURCHASE OF THE SHARES
1.1 The Shares; Purchase Price.
The Purchasers severally agree to purchase the Shares at a price of
$7.70 per Share or $149,996,000 in the aggregate (the "Purchase Price"). The
number of Shares to be purchased by each Purchaser, and the portion of the
Purchase Price to be paid by each, is set forth under its signature. The
Shares will represent, on a pro forma basis giving effect to the issuance of
the Shares, 39.84% of the outstanding voting stock of Maxtor as of August 31,
1993 (not including stock options, whether vested or unvested, or issued or
unissued, or debenture conversions). The Shares will be convertible, at the
Purchasers' election, into shares of unclassified common stock of Maxtor (the
"Common Stock"). The Purchase Price shall be paid in cash in immediately
available funds at the Closing.
1.2 Closing.
The closing of the purchase contemplated herein shall be consummated
at a closing to be held as promptly as feasible after the satisfaction (or
waiver) of all the conditions set forth in Sections 4 and 5, subject to any
prior termination pursuant to Section 9.9. The consummation of such purchase
is herein called the "Closing" and the date on which the Closing occurs the
"Closing Date." At the Closing, no Shares will be purchased or sold unless all
Shares are purchased and sold.
1.3 Delivery of Certificates.
At the Closing, Maxtor shall deliver to each of the Purchasers a
certificate duly issued in the name of such Purchaser representing the number
of Shares set forth under its signature.
1 Page 22 of 194
<PAGE> 23
SECTION 2. REPRESENTATIONS AND WARRANTIES OF MAXTOR
Maxtor hereby represents and warrants to each Purchaser that at the
date hereof, except as set forth in the Disclosure Memorandum (which
constitutes a part of the representations and warranties made in this Section
2) with reference to the Section or Sections in this Section 2 as to which the
exception applies and except as may be waived in writing by the Purchasers:
2.1 Organization, Good Standing and Qualification.
Maxtor is a corporation duly organized, validly existing and in good
standing under the law of Delaware and has all necessary power and authority
under applicable corporate law to own its Properties and to carry on its
business as now owned and operated by it. Maxtor is duly qualified as a
foreign corporation to do business, and is in good standing, in each of the
states listed in SCHEDULE 2.1. Any failure of Maxtor to be qualified as a
foreign corporation to do business in states other than those so listed does
not and will not, either individually or in the aggregate, have a Material
Adverse Effect on Maxtor.
2.2 Authority.
Subject to Shareholder approval of, and the effectiveness of, the
Restated Articles, Maxtor has full power, legal capacity and authority under
applicable corporate law to enter into, perform and comply with this Agreement
and all proceedings required to be taken by Maxtor to authorize the execution,
delivery and performance of and compliance with this Agreement have been
legally and properly taken.
2.3 No Conflict, Change.
Subject to the consents and other actions referred to in Section 2.4
having been obtained and taken, the execution and delivery of this Agreement,
and the performance of and compliance with this Agreement, will not give rise
to, accelerate the maturity of or otherwise modify any obligation of Maxtor or
any Subsidiary, or result in a breach of or constitute a default under or
result in the creation of a lien on any of Maxtor's Properties or the
Properties of any Subsidiary that will have a Material Adverse Effect on Maxtor
or a material impact on the transactions contemplated herein, in each case
pursuant to: (a) any Governmental Requirement applicable to Maxtor or any
Subsidiary; or (b) the charter documents or by-laws of Maxtor or any
Subsidiary; or (c) any Employee Plan, judgment, order or decree, or any
contract or other instrument or arrangement, to which Maxtor or any Subsidiary
is a party or by which Maxtor or any Subsidiary or any Property of any of them
is bound. To Maxtor's Knowledge, as of the date hereof, no material change in
the business or business relationships of Maxtor and the Subsidiaries taken as
a whole is a likely result of the transaction contemplated herein.
2.4 Approvals, Etc.
Except as listed in SCHEDULE 2.4, no consent, permit or approval of,
filing with or notice to any Governmental Agency or any other Person (whether
or not governmental in character) has been or is required to be obtained, made
or given by Maxtor or any Subsidiary in order for Maxtor
2 Page 23 of 194
<PAGE> 24
and the Subsidiaries without any breach or violation, to consummate or comply
with this Agreement the absence of which will have a Material Adverse Effect on
Maxtor or a material impact on the transactions contemplated herein.
2.5 Subsidiaries and Other Investments.
Maxtor does not own, directly or indirectly, any interest or
investment (whether equity or debt) in any corporation, business, association,
trust or other entity, except as set forth in SCHEDULE 2.5. Each of the
corporate entities designated as a subsidiary in SCHEDULE 2.5 (the
"Subsidiaries") is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was incorporated and
has all necessary power and authority under applicable corporate law to own its
Properties and to carry on its business as now owned and operated by it. Each
Subsidiary is duly qualified as a foreign corporation to do business in
jurisdictions where failure to so qualify has or will have a Material Adverse
Effect on Maxtor. SCHEDULE 2.5 indicates which Subsidiaries are Major
Subsidiaries.
2.6 Capital Structure.
(a) The authorized capital stock of Maxtor (prior to the amendment
described in Section 4.12) consists of 125,000,000 shares of Common Stock and
5,000,000 shares of Preferred Stock. As of August 31, 1993 there were issued
and outstanding 29,417,613 shares of Common Stock and no shares of Preferred
Stock. Since that date, Maxtor has issued no capital shares except upon
exercise of options outstanding on that date under the Maxtor Stock Option
Plans of 1985, 1988 and 1992 or rights outstanding on that date under the
Maxtor Employee Stock Purchase Plan, or upon conversion of the Maxtor 5.75%
Convertible Subordinated Debentures due March 1, 2012 outstanding on that date.
All such issued shares are validly issued, fully paid and non-assessable and no
holder thereof is entitled to preemptive rights. All such shares have been
issued in compliance with the registration and qualification requirements of
all federal and state securities laws, except for any possible noncompliance
that, in the aggregate, does not have and will not have a Material Adverse
Effect on Maxtor.
(b) Except as set forth in SCHEDULE 2.6, there are no outstanding
subscriptions, options, rights, warrants, convertible securities or other
contracts obligating Maxtor or any Subsidiary to issue or to transfer from
treasury any shares of its capital stock (collectively, "Stock Rights").
(c) All of the issued and outstanding shares of capital stock of
the Subsidiaries are validly issued, fully paid and non-assessable, have been
issued in compliance with all applicable securities and other laws. Maxtor
owns, directly or indirectly through one or more wholly-owned Subsidiaries, all
the issued and outstanding shares of capital stock of all Subsidiaries, except
that Maxtor owns 64.57% of the outstanding voting stock of Maxoptix.
(d) The Shares, when issued and paid for in accordance with this
Agreement, will be validly issued, fully paid and non-assessable.
3 Page 24 of 194
<PAGE> 25
(e) SCHEDULE 2.6 sets forth the names of all of record holders of
50,000 or more shares of the outstanding Common Stock as of August 31, 1993.
To the Knowledge of Maxtor, there is no "beneficial owner" (as that term is
defined by SEC Rule 13d-3) of 5% or more of the outstanding Common Stock except
as is listed on SCHEDULE 2.6.
2.7 Financial Statements.
The financial statements audited by Ernst & Young and contained in
Maxtor's annual report on Form 10-K for the fiscal year ended March 27, 1993
filed with the SEC (the "Annual Financial Statements"), and the unaudited
consolidated balance sheet of Maxtor at June 26, 1993 and the related
consolidated statement of income for the fiscal quarter ended on June 26, 1993,
certified by the chief financial officer of Maxtor (the "Interim Financial
Statements"), and the confidential unaudited consolidated balance sheet of
Maxtor at August 21, 1993 and the related consolidated statement of income for
the two fiscal months ended on August 21, 1993, certified by the chief
financial officer of Maxtor, (i) have been prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the periods indicated and in prior periods, except, in the case of
the Interim Financial Statements, for the omission of footnotes and of normal
year-end adjustments; and (ii) fairly present the consolidated financial
position of Maxtor as of the respective dates indicated and the consolidated
results of its operations for the respective periods indicated.
2.8 Absence of Certain Changes.
Since the date of the Interim Financial Statements, there has not been
by, or with respect to, Maxtor or any Subsidiary, any change that had, has or
will have a Material Adverse Effect on Maxtor (other than changes in Maxtor's
prospects resulting from normal industry occurrences such as competitive
product announcements, supplier financial difficulty or inability to ship
adequate quantities or quality of products, losses of significant customers or
customers' financial difficulty and development or product introduction
delays).
2.9 Material Transactions.
SCHEDULE 2.9 identifies all transactions engaged in by Maxtor or
any Subsidiary since March 27, 1993 that (a) were, are or will be required to
be described in reports on Forms 10-K, 10-Q or 8-K or in Maxtor's proxy
statement, (b) were not and would not be required to be disclosed in such
reports or proxy statement but were not in the ordinary course of business and
involved payments by or to Maxtor or any Subsidiary of $20,000,000 or more, or
(c) constitute a liability or potential liability that Maxtor believes could
reasonably exceed $20,000,000. SCHEDULE 2.9 identifies all business or
business relationships of Maxtor or any Subsidiary which were material to
Maxtor and its Subsidiaries taken as a whole and have been terminated since
March 31, 1993 except those terminated in the ordinary course of business
without breach or alleged breach by any party.
2.10 Intellectual Property.
(a) SCHEDULE 2.10 lists (i) each patent issued to, each patent
application filed by, and each patent application referred to patent counsel
for prosecution by, Maxtor or any Subsidiary;
4 Page 25 of 194
<PAGE> 26
(ii) each material registered copyright, trademark, service mark and similar
registered item owned by Maxtor or any Subsidiary; (iii) each license to Maxtor
or any Subsidiary of Intellectual Property Rights upon which Maxtor or any
Subsidiary is materially dependent and which is not generally available; and
(iv) each license of Intellectual Property Rights granted by Maxtor or any
Subsidiary other than a license granted to customers in the ordinary course of
business.
(b) Maxtor and/or the Subsidiaries own, or are licensed or
otherwise have the rights to use, all patents, trademarks, trade names,
copyrights, technology, trade secrets, know-how and processes (collectively,
"Intellectual Property Rights") material to or necessary for the conduct of
their businesses as presently conducted. No claims are pending by any Person
against Maxtor or any Subsidiary as to the use of any Intellectual Property
Rights or challenging or questioning the validity or effectiveness of any
license or agreement regarding Intellectual Property Rights and, to Maxtor's
Knowledge, the use by Maxtor or any Subsidiary of all Intellectual Property
Rights does not infringe on the rights of any Person. To the Knowledge of
Maxtor, no third Person is infringing on the Intellectual Property Rights of
Maxtor or any Subsidiary.
2.11 Liabilities, Debts, Etc.
As of the date of the Annual Financial Statements and as of the date
of the Interim Financial Statements, Maxtor had no liabilities, obligations or
debts, which must be accrued as liabilities on a balance sheet, or disclosed in
financial statements, prepared under generally accepted accounting principles,
other than those reflected or disclosed in the Annual Financial Statements and
the Interim Financial Statements, respectively.
2.12 Tax Returns and Payments.
The provisions made in the Annual Financial Statements and the Interim
Financial Statements with regard to accrued and deferred income taxes are in
accordance with GAAP. The material income tax reporting positions of Maxtor
and the Subsidiaries have substantial support.
2.13 Compliance with Governmental Requirements, Rights of Others.
(a) To the Knowledge of Maxtor, neither Maxtor nor any Subsidiary
is in violation of, nor has any violated, any applicable Governmental
Requirement or rights of any Person, which violation has or will have a
Material Adverse Effect on Maxtor.
(b) Without limiting the generality of Section 2.13(a), to the
Knowledge of Maxtor, Maxtor and the Subsidiaries hold all permits, licenses and
other authorizations required to be obtained from any Governmental Agency,
other than any permits, licenses and authorizations whose absence does not have
and will not have a Material Adverse Effect.
(c) The aggregate capital expenditures required, to Maxtor's
specific Knowledge, to be made by it and the Subsidiaries in order to comply
with any Governmental Requirement currently applicable (whether required to be
made now or in the future) do not exceed $1,000,000 in any one case.
5 Page 26 of 194
<PAGE> 27
2.14 Proceedings, Claims.
There are no suits, arbitrations, deficiencies, governmental
proceedings or investigations, claims (except for warranty claims in the
ordinary course of business), notices of violation or required changes,
inspections or employee disputes to which Maxtor or any Subsidiary is a party
or subject or which is, to Maxtor's Knowledge, overtly threatened. To the
Knowledge of Maxtor, there is no material claim that is likely to be asserted
against it or any Subsidiary.
2.15 Material Contracts.
SCHEDULE 2.15 sets forth a complete and accurate list of any contract
or agreement currently in effect:
(a) that was, is or will be required to be filed with the SEC
pursuant to Form 10-K, 10-Q or 8-K;
(b) that relates to the borrowing of money or a guarantee by
Maxtor or any Subsidiary or to debt securities, a capitalized lease, a lien, a
security agreement or an agreement regarding capital expenditures under which
(in each case) the aggregate obligations of Maxtor and the Subsidiaries exceed
$10,000,000;
(c) that relates to an operating lease under which the aggregate
obligations of Maxtor and the Subsidiaries exceed $10,000,000 in any fiscal
year beginning after March 27, 1993;
(d) that constitutes a stock plan of Maxtor or any Subsidiary, or
that relates to any agreement or arrangement (other than pursuant to a stock
plan listed in SCHEDULE 2.15) with any executive officer of Maxtor or any
Subsidiary relating to stock or stock options;
(e) that relates to a supply or customer agreement (i) providing
for a binding obligation to purchase or sell products or components of such
products with an aggregate purchase price of $30,000,000 or more in any fiscal
year or (ii) having a term expiring later than August 31, 1995 and providing
for a binding obligation to purchase products or components of products with an
aggregate purchase price of $10,000,000 or more after August 31, 1993;
(f) that relates to return rights of customers given by Maxtor or
any Subsidiary that differ materially from the industry standard described in
SCHEDULE 2.15 and that relates to quantities of product sold to any single
customer in excess of $10,000,000;
(g) that relates to an employee pension, welfare or benefit plan
of Maxtor or any Major Subsidiary, or that relates to an agreement between any
present or former executive officer of Maxtor or a Major Subsidiary, on the one
hand, and Maxtor or any Subsidiary on the other, relating to compensation;
(h) between Maxtor or any Subsidiary on the one hand and any
affiliate of Maxtor (other than a direct or indirect wholly-owned Subsidiary)
or any officer or director or Maxtor or a Major
6 Page 27 of 194
<PAGE> 28
Subsidiary or any record holder of 50,000 or more shares (as of August 31,
1993) of the outstanding Common Stock on the other hand that relates to an
aggregate amount in excess of $150,000;
(i) that limits the freedom of Maxtor or any Subsidiary to enter
into in any line of business in any area of the world; and
(j) that requires Maxtor or any Subsidiary to remediate, or
indemnify or reimburse the costs of remediation of, a specific condition
existing at any real Property, whether currently or formerly owned or operated
by it or owned or operated by any third party.
To the Knowledge of Maxtor, there is no current or overtly threatened
breach or claim of a breach by any party under any of the contracts listed on
SCHEDULE 2.15 which has or will have a Material Adverse Effect on Maxtor.
2.16 Contamination, Etc.
(a) To the Knowledge of Maxtor, there is no contamination of the
soil underlying any real estate owned, leased, operated or used (currently or
formerly) by Maxtor or any Subsidiary, or of any structure or other property on
such real estate or any surface or ground water on or under such real estate,
by any Regulated Material, and there is no and has been no release or
disposition of any Regulated Material from any such real estate, which
contamination, release or disposition has or will have a Material Adverse
Effect on Maxtor.
(b) SCHEDULE 2.16(b) lists all currently-pending and past
remediation actions taken or required to be taken by Maxtor or any Subsidiary
with respect to any real Property, and any site currently or previously owned
or operated by Maxtor or any Subsidiary which, to the Knowledge of Maxtor, is
or was included in any site list of any Governmental Agency (including without
limitation any CERCLIS list, federal National Priority List, Cortese list or
abandoned site list).
2.17 Corporate Documents.
Maxtor has delivered to the Purchasers for their examination true,
correct and complete copies of the certificates of incorporation and by-laws of
Maxtor and each of the Major Subsidiaries, each as amended and currently in
effect, and of the documents listed in the Disclosure Memorandum.
2.18 Brokerage, Etc.
Neither Maxtor nor any Subsidiary is a party to any arrangement, or is
subject to any obligation, relating to any brokerage fee, finder's fee,
compensation or other consideration payable in respect of the transactions
contemplated hereby, other than reasonable and customary fees and expenses
payable to its legal counsel and independent accountants for work performed
relating to such transactions and a fairness opinion fee (not to exceed
$300,000) and reasonable and customary expenses of Bear Stearns & Co., Inc.
7 Page 28 of 194
<PAGE> 29
2.19 Misstatements and Omissions.
(a) The representations and warranties made in this Section 2 and in
any certificate delivered pursuant hereto, do not contain any untrue statement
of material fact or omit to state any material fact necessary to make the
statements contained herein and therein not misleading.
(b) Neither Maxtor's annual report on Form 10-K for each of the fiscal
years ended March 30, 1991, March 28, 1992 or March 27, 1993 nor any of its
proxy statements for the 1991, 1992 or 1993 annual shareholders meeting nor any
other filing by Maxtor with the SEC after March 27, 1993 under the Securities
Exchange Act of 1934, as amended, contained, as of the respective dates
thereof, any untrue statement of material fact or omitted to state any material
fact necessary to make the statements contained therein, as of the respective
dates thereof, not misleading.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby represents and warrants to Maxtor, with respect
to itself, that at the date hereof:
3.1 Organization, Good Standing and Qualification.
Such Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the Republic of Korea and has all necessary
power and authority under applicable corporate law to own its property and to
carry on its business as now owned and operated.
3.2 Authority.
Such Purchaser has full power, legal capacity and authority under
applicable corporate law to enter into, perform and comply with this Agreement.
All proceedings required to be taken by such Purchaser to authorize the
execution, delivery and performance of and compliance with this Agreement have
been properly taken, no action by the shareholders or directors of any of the
Purchasers (other than those, if any, already taken) being required.
3.3 No Conflict.
Subject to the consents and other actions referred to in Section 3.4
having been obtained and taken, the execution and delivery of this Agreement,
and the performance of and compliance with this Agreement, will not give rise
to, accelerate the maturity of or otherwise modify any obligation of such
Purchaser, or result in a breach of or constitute a default under or result in
the creation of a lien on such Purchaser's Properties pursuant to (a) any
Governmental Requirement applicable to such Purchaser, or (b) the charter
documents or by-laws of such Purchaser, or (c) to the Knowledge of such
Purchaser, any material Employee Plan or any material contract, judgment,
order, decree or other instrument or arrangement to which such Purchaser is a
party or by which such Purchaser is bound.
8 Page 29 of 194
<PAGE> 30
3.4 Approvals, Etc.
No consent, permit or approval of, filing with or notice to any
Governmental Agency or any other Person (whether or not governmental in
character) has been or is required to be obtained, made or given by such
Purchaser in order to consummate this Agreement, the absence of which would
have a Material Adverse Effect on such Purchaser, except for (i) those required
by the Hart-Scott-Rodino Antitrust Improvements Act of 1976; (ii) those
required by Federal and state securities law; (iii) those required by the
Exon-Florio amendment to the Defense Production Act of 1950; (iv) notice filing
in such jurisdictions other than the United States and the Republic of Korea as
may be applicable; (v) approval by all necessary government officials and
agencies of the Republic of Korea; and (vi) filing reports under the
International Investment and Trade in Services Act, as amended, with the United
States Commerce Department.
3.5 Securities Laws Status.
Such Purchaser is acquiring the Shares being purchased by it solely
for its own account. Such Purchaser understands that the Shares have not been
registered under the Securities Act and that any subsequent disposition thereof
must be registered under the Securities Act or be exempt from such
registration. Such Purchaser has the ability to bear the economic risks of its
investment in the Shares and qualifies as an "accredited investor" (as such
term is defined in Rule 501 of Regulation D promulgated under the Securities
Act).
3.6 Ownership of Maxtor Stock.
Neither such Purchaser nor any Affiliate of such Purchaser nor any
Person with whom a Purchaser or any Affiliate of a Purchaser is acting (within
the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) as a partnership, limited partnership, syndicate or other group for
the purpose of acquiring, holding or disposing of securities issued by Maxtor
owns any stock issued by Maxtor as of the date of this Agreement or will, as of
the Closing, own any stock issued by of Maxtor other than the Shares to be
purchased by such Purchaser hereunder.
3.7 Brokerage, Etc.
Neither such Purchaser nor any Affiliate of such Purchaser is a party
to any arrangement, or subject to any obligation, relating to any brokerage
fee, finder's fee, compensation or other consideration payable in respect of
the transactions contemplated hereby.
SECTION 4. CLOSING CONDITIONS OF EACH PURCHASER
The obligations of each Purchaser to be performed under this Agreement
at the Closing are subject to the satisfaction, at or before the Closing, of
all the conditions set forth in this Section 4, unless the satisfaction of such
conditions are waived by such Purchaser in its sole discretion.
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4.1 Accuracy of Representations and Warranties.
All representations and warranties set forth in Section 2 have been
true as of the date hereof; and shall be true in all material respects at and
as of the Closing as though made at and as of that time, other than any changes
therein (to be reflected in a mutually-executed amendment to the Disclosure
Memorandum) which in the good faith judgment of the Purchasers does not have
and is not reasonably likely to have a Material Adverse Effect on Maxtor.
4.2 Maxtor's Performance.
Maxtor shall have performed, satisfied and complied with all material
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by it at or before the Closing.
4.3 Certification.
The Purchasers shall have received a certificate of Maxtor, dated the
date of the Closing, signed on Maxtor's behalf by the president and the chief
financial officer of Maxtor, stating that the conditions specified in Sections
4.1 and 4.2 have been fulfilled.
4.4 Governmental Approval.
All Purchasers shall have received approval of the transactions
contemplated hereby by all necessary government officials and agencies of the
Republic of Korea and such approval shall not impose any burdensome condition
or requirement on any Purchaser.
4.5 No Material Adverse Change.
Maxtor's financial results for the period between August 21, 1993 and
the Closing, and its progress during such period in new product
commercialization, shall not materially adversely affect the prospects for
achieving its business plan, and no change (other than with respect to its
financial results, and new product commercialization, during such period) shall
have occurred since August 21, 1993 which has or will have a Material Adverse
Effect on Maxtor.
4.6 Suspension of Trading, Etc.
There shall not have occurred (i) any suspension of public trading in
securities in the United States or the Republic of Korea generally, (ii) any
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States or the Republic of Korea or (iii) any commencement
of a war, armed hostilities or other international or national calamity
materially affecting the United States or the Republic of Korea.
4.7 Litigation, Etc.
There shall be no investigation, notice, litigation, arbitration or
proceeding pending or threatened for the purpose of enjoining or preventing the
consummation of the transactions
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contemplated by this Agreement or otherwise claiming that the consummation of
such transactions is illegal or improper and (i) which is brought by a Person
other than a Governmental Agency and which, in such Purchaser's good faith
judgment, may have a material adverse effect on the transactions contemplated
hereby or a Material Adverse Effect on Maxtor or such Purchaser or (ii) which
is brought by a Governmental Agency or (iii) in which a temporary restraining
order, preliminary or permanent injunction or other order or stay against
consummation of the transactions contemplated hereby has been entered and
remains in effect.
4.8 Transactions Out of the Ordinary Course, Etc.
There shall have been no transaction that Maxtor or any Subsidiary has
entered into or agreed to enter into since August 18, 1993, other than any
listed in SCHEDULE 2.9 or which has been consented to in writing by the
Purchasers, that is of a character and significance to take it out of the
ordinary course of business or which would be subject to the Purchasers'
approval after the Closing in accordance with the terms of the Shares.
4.9 Rights Agreement.
Prior to the Closing, the Amendment to the Rights Agreement attached
as EXHIBIT A shall have been approved by all necessary approvals to take effect
on or before the Closing.
4.10 Appointment of Directors.
Maxtor shall have increased the authorized number of its Directors
from five to eight, and shall have appointed to its Board of Directors three
nominees selected by the Purchasers, with one allocated to each class (as
provided in paragraph A of Article SIXTH of the Restated Articles) as
designated by the Purchasers, and such appointees shall have been offered the
same indemnity and insurance arrangements as are applicable to Maxtor's other
directors.
4.11 Appointment of Chairman.
Maxtor's board of directors shall have appointed as its Chairman of
the Board the board member so designated by the Purchasers.
4.12 Restated Articles.
Maxtor shall have duly authorized and filed the restated certificate
of incorporation set forth in EXHIBIT B (the "Restated Articles"), and
corresponding amendments to its by-laws shall have been adopted.
4.13 Opinion of Counsel.
Ware & Freidenrich, outside counsel to Maxtor, shall have delivered to
the Purchasers its opinion dated the Closing Date, reasonably satisfactory in
form and substance to the Purchasers, as to: (i) the valid issuance, full
payment and nonassessability of the Shares; (ii) the due authorization and
effectiveness of the rights plan amendment set forth in EXHIBIT A and the
Restated Articles;
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(iii) the legality, binding nature and enforceability of this Agreement and the
Restated Articles; and (iv) the absence, to such counsel's knowledge, of any
proceeding of the kind described in Section 4.7 (without regard, in the case of
clause (i) thereof, to material adverse effect).
4.14 Other Conditions.
All of the conditions set forth in Sections 5.4 through 5.7 shall have
been satisfied.
SECTION 5. CLOSING CONDITIONS OF MAXTOR
The obligations of Maxtor to be performed under this Agreement at the
Closing are subject to the satisfaction, at or before the Closing, of all the
conditions set forth in this Section 5, unless the satisfaction of such
conditions are waived by Maxtor.
5.1 Accuracy of Representations and Warranties.
All representations and warranties set forth in Section 3 shall have
been true as of the date hereof and shall be true in all material respects at
and as of the Closing as though made at and as of that time.
5.2 Performance of the Purchasers.
Each of the Purchasers shall have performed, satisfied and complied
with all material covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by it at or before the
Closing.
5.3 Certification.
Maxtor shall have received a certificate from HEI, on behalf of all
Purchasers, dated the date of the Closing, signed by two of its officers,
stating that the conditions specified in Sections 5.1 and 5.2 have been
fulfilled.
5.4 Fairness Opinion.
Maxtor shall have received from an investment banking firm reasonably
satisfactory to Maxtor's Board of Directors an opinion as to the fairness from
a financial point of view to the shareholders of the issuance of the Shares in
form and substance reasonably satisfactory to Maxtor's Board of Directors dated
as of the date hereof and as of the Closing Date.
5.5 U.S. Governmental Agency Matters.
The waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 shall have expired, and a notice of determination not to
investigate, or to take no action, shall have been given under the Exon-Florio
amendment to the Defense Production Act of 1950.
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5.6 Litigation, Etc.
There shall be no investigation, notice, litigation, arbitration or
proceeding pending or threatened for the purpose of enjoining or preventing the
consummation of the transactions contemplated by this Agreement or otherwise
claiming that the consummation of such transactions is illegal or improper and
(i) which is brought by a Person other than a Governmental Agency and which, in
Maxtor's good faith judgment, may have a material adverse effect on the
transactions contemplated hereby or a Material Adverse Effect on Maxtor, or
(ii) which is brought by a Governmental Agency or (iii) in which a temporary
restraining order, preliminary or permanent injunction or other order or stay
against consummation of the transactions contemplated hereby has been entered
and remains in effect.
5.7 Shareholder Approval.
The Shareholders shall have duly approved the transactions
contemplated by this Agreement and the Restated Articles.
5.8 Opinion of Counsel.
McCutchen, Doyle, Brown & Enersen, outside counsel to the Purchasers,
shall have delivered to Maxtor its opinion dated the Closing Date, reasonably
satisfactory in form and substance to Maxtor, as to: (i) the legality, binding
nature and enforceability of this Agreement; and (ii) the absence, to such
counsel's knowledge, of any proceeding of the kind described in Section 5.6
(without regard, in the case of clause (i) thereof, to material adverse
effect).
SECTION 6. OBLIGATIONS OF MAXTOR
6.1 Pro Rata Purchase Right.
Prior to any issuance of any shares of capital stock or any Stock
Rights by Maxtor or any Subsidiary on or after the Closing, Maxtor will notify
all Purchasers of the terms thereof, including without limitation a description
of the shares or Stock Rights to be issued, the amount to be issued and the
consideration to be received therefor. Each Purchaser may, by notice given to
Maxtor pursuant to Section 9.11 within 60 days after such Maxtor notice
(subject to extension by up to 60 days if required for any necessary approval
of any Governmental Agency, as requested by a Purchaser and consented to by
Maxtor, which consent shall not unreasonably be withheld), elect to purchase a
number of such shares or Stock Rights up to its pro rata share of the proposed
issuance, on the same terms as, and simultaneously with the closing of (or
thereafter, promptly after Purchaser gives such notice, if Maxtor desires to
proceed with the issuance having authorized the sale of the pro rata share to
one or more Purchasers upon its or their later election pursuant to this
Section 6.1), the balance of such issuance. Such pro rata share shall be the
fraction whose numerator is the aggregate number of Shares and shares of Common
Stock then held by such Purchaser and whose denominator is the aggregate number
of Shares and shares of Common Stock then outstanding, which Maxtor shall
specify in its notice. If the terms of the proposed issuance are materially
changed from those stated in such notice, then it shall be treated as a new
issuance, subject again to
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this Section 6.1, and any election to purchase made prior to such change may,
at the sole discretion of the electing Purchaser, be withdrawn. The right of
pro rata purchase pursuant to this Section 6.1 shall not, however, apply to:
(i) any issuance pursuant to any stock option or purchase right or
plan exclusively for one or more employees and/or directors of
Maxtor or any Subsidiary; or
(ii) any issuance in consideration of the acquisition of a business;
or
(iii) any issuance upon conversion of Maxtor's 5.75% Convertible
Subordinated Debentures due March 1, 2012 outstanding on the
date hereof;
(iv) any issuance pursuant to exercise or conversion of any Stock
Right issued after the Closing in compliance with this Section
6.1; or
(v) any issuance at a time when the director nomination rights set
forth in paragraph D(4) of Article FOURTH of the Restated
Articles are not in effect.
6.2 Indemnification with Respect to Representations and Warranties.
If the Closing occurs, all rights, obligations and claims with
respect to the representations and warranties made in or pursuant to this
Agreement shall be determined exclusively in accordance with this Section 6.2.
Such representations and warranties shall survive the Closing and any
investigation made by Purchasers with respect thereto, in accordance with this
Section 6.2.
(a) Subject to Section 6.2(b), Maxtor shall
indemnify the Purchasers, against and in respect of any and all losses, costs,
claims, demands, actions, suits, proceedings, assessments, expenses,
liabilities, damages and judgments (including interest, penalties and
reasonable attorneys' fees and reasonable out-of-pocket costs and the
reasonable fees and out-of-pocket costs of other professional advisors)
(collectively, "Losses") of any or all of the Purchasers which arise out of,
result from or relate to any breach of or inaccuracy in any of Maxtor's
representations and warranties contained in this Agreement or in any
certificate delivered by Maxtor pursuant to this Agreement. In the case of a
representation or warranty that relates to Maxtor's business, Properties,
obligations, contracts, operations, etc., the amount of Loss that shall be
indemnified hereunder shall be calculated by measuring the significance of the
breach to the entire equity interest in Maxtor and the Subsidiaries taken as a
whole and multiplying such amount by the aggregate percentage then held by all
Purchasers of the aggregate outstanding Shares and shares of Common Stock. In
order to take account of the impact of any indemnity payment by Maxtor on the
Purchasers in their capacity as shareholders of Maxtor, all indemnity payments
shall include an additional amount equal to the amount otherwise owing times a
fraction, the numerator of which is the aggregate percentage then held by all
Purchasers of the aggregate outstanding Shares and shares of Common Stock and
the denominator of which is the aggregate percentage then held by all
shareholders other than the Purchasers of the aggregate outstanding Shares and
shares of Common Stock.
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(b) Limitations on Claims. No claim shall be
payable with respect to any representation or warranty unless and until the
aggregate Losses owing under this Section 6.2 in respect of all Purchasers and
all claims against Maxtor exceeds $500,000, in which case the Purchasers shall
be entitled to indemnification from Maxtor for all Losses without regard to
such $500,000 threshold, up to but not exceeding (i) $30,000,000 with respect
to claims asserted by a Purchaser within six months of the Closing, (ii)
$15,000,000 with respect to claims asserted by a Purchaser more than six months
after the Closing but within twelve months of the Closing and (iii) $5,000,000
with respect to claims asserted by a Purchaser more than twelve months after
the Closing, but less than eighteen months after the Closing. No claim shall
be payable with respect to any representation or warranty unless such claim is
asserted within eighteen months after the Closing. For purposes of this
Section 6.2(b), a month shall be deemed to elapse at 5:00 p.m. California time
on the day of the month on which the Closing occurred. (For example, if the
Closing occurs on October 29, 1993, the sixth month would be deemed to elapse
at 5:00 p.m. California time on April 29, 1994.)
(c) Notice of Claims. Any claim for
indemnification pursuant to this Section 6.2 shall be made by written notice
from a Purchaser to Maxtor in accordance with Section 9.11. Payment of the
amount of such claim will be due within 10 days of the giving of such notice.
6.3 Third Party Claims.
Maxtor agrees to indemnify each of the Purchasers and any of
their Affiliates, officers, directors, employees and their respective
successors, assigns, heirs and personal representatives (each a "Purchaser
Party" and collectively "Purchaser Parties") against any Losses resulting from
claims asserted against any Purchaser Party:
(i) by any security holder, creditor, contract party,
employee, director, supplier or customer of Maxtor or any Subsidiary or
a purchaser or seller (or potential purchaser or seller) of Maxtor
securities or an acquirer (or potential acquirer) of Maxtor with respect
to the transactions contemplated herein; provided, however, that there
shall be no such indemnification for (a) claims by Maxtor for the breach
by a Purchaser of its obligations hereunder to Maxtor and (b) any claim
by a third party alleging that any action by a Purchaser, other than
actions taken pursuant to the Letter of Intent or this Agreement,
constitutes interference with any negotiations or proposed transaction
which Maxtor would be permitted to engage in under Section 9.2; or
(ii) asserting any matter which, if true, would
constitute a breach of any representation or warranty of Maxtor
contained in this Agreement or in any certificate delivered by Maxtor
pursuant to this Agreement.
A Purchaser Party shall give Maxtor reasonable notice of any
claim or demand asserted by third parties against it for which indemnity may be
sought under this Section 6.3, and shall permit Maxtor to have reasonable
access to relevant information in its possession or control related to the
claim or demand. Maxtor shall have the right at its own expense to appoint
counsel to participate in the defense of such matter, but the Purchaser Party
shall have the right to prosecute,
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defend, compromise, settle or pay any claim. Maxtor may, however, compromise,
settle or pay any claim if it procures from the claimant a full and complete
release not entailing any commitment of or limitation of any kind on the
Purchaser Party and satisfactory in form and substance to the Purchaser Party
and its counsel. No monetary compromise or settlement of any such claim shall
be subject to indemnification under this Section 6.3 unless consented to by
Maxtor, which consent shall not be unreasonably withheld. Any failure of the
Purchaser Party to comply with this Section 6.3 shall reduce the amount subject
to indemnification under this Section 6.3 by the damages actually and
foreseeably resulting from such failure, but shall not release or otherwise
affect Maxtor from its obligations under this Section 6.3 or elsewhere in this
Agreement. The remedies set forth in this Section 6.3 shall be in addition to,
and not in lieu of, any remedies otherwise available.
6.4 Rights Plan Amendment.
So long as the exemption stated in Section 1(a)(2) of the Rights
Agreement (as amended by the amendment thereto attached as EXHIBIT A) remains
in effect, Maxtor will not amend, terminate or repeal the provisions of the
Rights Agreement set forth in the amendment thereto attached as EXHIBIT A, or
make any amendment to the Rights Agreement that has the effect of amending,
repealing or terminating such provisions or of imposing any restriction,
condition or burden thereon.
6.5 Maxtor Proxy Solicitation, Etc.
At any time when the right to nominate directors pursuant to
paragraph D(4) of Article FOURTH of the Restated Articles is in effect, Maxtor
will use its best efforts to solicit proxies, and take such other steps, in
each case consistent with its past practice, as are reasonably appropriate to
secure the election of the slate of directors nominated pursuant to such
paragraph D(4).
SECTION 7. OBLIGATIONS OF THE PURCHASERS AFTER CLOSING
7.1 Agreement Not to Sell Without Conversion.
Each of the Purchasers agrees that neither it nor any permitted
transferee of any Shares will sell or transfer any interest in the Shares (or
grant a proxy or other authorization to vote the Shares otherwise than in
compliance with this Section 7) to a Person that is not another Purchaser or an
Affiliate of such Purchaser or another Purchaser (other than any such Affiliate
in which a substantial competitor or substantial announced competitor of Maxtor
and the Subsidiaries taken as a whole holds an equity interest (other than an
equity interest of 10% or less in a class of publicly-traded securities))
unless and until it converts the Shares subject to the sale or transfer to
Common Stock. In any such permitted transfer to an Affiliate, the transferee
shall agree to be bound by the terms of this Agreement. The certificates
representing any securities subject to this Agreement will so note.
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7.2 Standstill Agreement.
Following the Closing, each Purchaser (and any Affiliate of any
Purchaser) may only purchase additional shares of Maxtor capital stock:
(a) to maintain the Purchasers' collective
percentage ownership in Maxtor to the extent that it is reduced by exercise of
stock options or issuance of shares under Maxtor employee benefit plans, or on
account of any other issuance of stock by Maxtor (including without limitation
any issuance pursuant to Section 6.1(ii) or (iii));
(b) to increase its percentage ownership share, so
long as the purchase does not cause Maxtor to lose a material amount of the
benefits available to it with respect to the net operating loss carry-forward
available to it as of the date hereof and so long as those purchases do not
provide the Purchasers collectively with ownership of greater than 45% of
Maxtor's outstanding voting power;
(c) in the case of a tender or exchange offer (in
which the consideration offered consists solely of cash and/or securities for
which a public trading market in the United States exists or will exist) by any
or all Purchasers (or an Affiliate of any or all Purchasers) for all of the
outstanding shares of Maxtor Common Stock (provided that the purchase price has
been approved by a majority of the disinterested members of Maxtor's Board of
Directors, following negotiations conducted in good faith between the
Purchaser(s) and disinterested members of the Maxtor Board of Directors), and
in the open market following such a tender or exchange offer if, immediately
after the closing of such offer, the Purchasers and their Affiliates hold, in
the aggregate, at least 80% of the aggregate number of shares of Common Stock
and Class A Common Stock then outstanding; or
(d) in the open market if both (i) a third party or
group of third parties (other than any Affiliate of any Purchaser or any Person
with whom a Purchaser or any Affiliate of a Purchaser acts (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) as a
partnership, limited partnership, syndicate or other group for the purpose of
acquiring, holding or disposing of securities issued by Maxtor) makes a tender
or exchange offer for 40% or more of Maxtor's outstanding shares, or
accumulates more than 20% of Maxtor's Common Stock and (ii) Maxtor's Board of
Directors has redeemed the Rights (as defined in the Rights Agreement) or
amended, supplemented or waived any provision of the Rights Agreement with
respect to such tender, exchange or accumulation (or failed to renew it, on
substantially identical terms reflecting the amendment attached as EXHIBIT A,
upon any expiration thereof) unless such redemption, amendment, supplement or
waiver is made in connection with a "Corporate Sale" (as defined in paragraph
E(3) of Article FOURTH of the Restated Articles) made in compliance with
paragraph D(2)(vii) or (viii) of such Article FOURTH.
Approval by the Maxtor board of directors will be required in all other cases
until August 18, 2000, or, if sooner, (i) six months after the Purchasers cease
to own collectively securities constituting at least 20% of Maxtor's voting
power, or (ii) the occurrence of a material breach by Maxtor of its obligations
in Section 6.1 or the terms of the Shares which is not cured within thirty days
after notice of the breach from a Purchaser. Maxtor will report to the
Purchasers from time to time as reasonably
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requested on changes in Maxtor's outstanding capital stock, and will notify the
Purchasers as promptly as reasonably feasible after it becomes aware of a
tender offer or accumulation as described in Section 7.2(d).
7.3 No Proxy Solicitation.
Except in connection with an offer by a Purchaser to acquire
additional shares of Maxtor as described in Section 7.2, or in response to a
proxy contest initiated by any third party, neither any Purchaser nor any
Affiliate of a Purchaser will engage in any proxy solicitation so long as the
consent rights stated in paragraph D(2) of Article FOURTH of the Restated
Articles remain in effect, unless at the time the Purchasers and their
Affiliates hold, in the aggregate, at least a majority of the aggregate number
of shares of Common Stock and Class A Common Stock then outstanding and neither
the Purchasers nor any of their Affiliates have acquired any shares of Maxtor
capital stock in breach of Section 7.2.
7.4 Approval of Holders of Class A Common Stock.
(a) The Purchasers agree that they will not, and that they will
cause any permitted transferee of the Shares not to, unreasonably withhold any
approval required under paragraph D(2) of Article FOURTH of the restated
certificate of incorporation set forth in EXHIBIT B.
(b) If any dispute arises under or relating to this Section
7.4, such dispute shall be resolved solely by binding arbitration pursuant to
this Section 7.4(b). In the event of any such dispute, any party thereto may
refer the matter to a single arbitrator, who shall be a person experienced in
such matters selected by mutual agreement of the parties to the dispute. If
the parties cannot agree on the arbitrator within 10 days after a party gives
notice of its desire for arbitration hereunder, the arbitrator will be selected
by, or in accordance with the procedure specified by, the Secretariat of the
Arbitration Court of the International Chamber of Commerce. The arbitration
will be held in the location mutually agreed to by the parties to the dispute
or, in the absence of such agreement, as determined by the arbitrator, in
accordance with the commercial arbitration rules of the American Arbitration
Association, as administered by such Association. The arbitrator will be in
charge of the schedule for such arbitration, and shall seek to complete it
within 45 days of a party's notice of desire for arbitration hereunder. There
shall be no discovery unless specifically ordered by the arbitrator for cause.
Any written submission by a party shall not exceed 30 pages (not counting
copies of this Agreement and of documents relating to the dispute) as to an
original memorandum or 15 pages as to a single reply memorandum. The hearing
in such arbitration shall be completed within two days unless the arbitrator
determines otherwise. In the event the arbitrator finds the consent previously
requested by Maxtor has been unreasonably withheld, the arbitrator shall have
the right to require the Purchasers to consent to such matter promptly upon
resubmission thereof by Maxtor for consent.
7.5 Voting for Directors.
At any time when the Purchasers have the right to nominate
directors pursuant to paragraph D(4) of Article FOURTH of the Restated Articles
and Maxtor complies with such paragraph D(4), the Purchasers will vote, and
cause their respective Affiliates to vote, the Shares and
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shares of Common Stock held by them in favor of the slate of directors
nominated pursuant to such paragraph D(4). The Purchasers will hold, and cause
their Affiliates to hold, the Shares and shares of Common Stock in their own
name or in the name of a nominee or other holder of which they give advance
notice to Maxtor and who does not hold securities in such name for the account
of persons who are not Purchasers or Affiliates. In the event of any breach by
the Purchasers or such Affiliates of this Section 7.5, then, in addition to any
other remedies available under applicable law, (i) to the extent that Shares
and shares of Common Stock are not voted in accordance with this Section 7.5,
the Purchasers and their Affiliates agree that they shall not be entitled to
vote such shares for such election without the consent of a majority of the
directors other than any directors nominated by the Purchasers or their
Affiliates, and (ii) Maxtor may require, upon the affirmative vote of a
majority of its directors other than any directors nominated by Purchasers or
their Affiliates pursuant to paragraph D(4) of Article FOURTH of the Restated
Articles, the breaching Purchaser(s) or Affiliate(s) and all the Affiliates of
such breaching party to enter into a voting trust agreement in customary form
with respect to the Shares and shares of Common Stock held by the breaching
party and such Affiliates under which (i) such directors from time to time will
be the voting trustees, (ii) such trustees shall vote the Shares and shares of
Common Stock at any election of directors in favor of the slate nominated
pursuant to paragraph D(4) of Article FOURTH of the Restated Articles, (iii)
the shares subject to the voting trust will be voted as to all other matters as
directed by the beneficial holders thereof and (iv) the voting trust will
terminate at such time as the Purchasers no longer have the right to nominate
directors pursuant to paragraph D(4) of Article FOURTH of the Restated
Articles.
SECTION 8. REGISTRATION RIGHTS
8.1 Requested Registration.
If at any time one or more Purchasers shall request that Maxtor
effect the registration of shares of Common Stock issued or issuable upon
conversion of Shares, and the requested registration relates to an offering
either (i) of at least 1,400,000 shares of Common Stock held, and issuable upon
conversion of Shares held, by all Purchasers or (ii) with anticipated aggregate
proceeds (before any underwriters discount or any expenses of the offering) of
$25,000,000 or more, Maxtor shall use its best efforts to effect the requested
registration.
The rights granted by this Section 8.1 may be exercised from
time to time, but Maxtor shall not be required to make any registration
effective under this Section 8.1 more than once in any calendar year.
Maxtor may include in the registration under this Section 8.1
any other shares of Common Stock (including issued and outstanding shares of
Common Stock as to which the holders thereof have contracted with Maxtor for
"piggyback" registration rights) so long as the inclusion in such registration
of such shares will not, in the opinion of the managing underwriter, if any, or
the Purchaser requesting registration, if there is no managing underwriter,
interfere with the successful marketing in accordance with the intended method
of sale or other disposition of all the shares sought to be registered by a
Purchaser pursuant to this Section 8.1. If it is determined as provided above
that there will be such interference, the other shares of Common Stock sought
to be included
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shall be excluded to the extent deemed appropriate by the managing underwriter
or Purchaser, as the case may be.
If the requested registration is an underwriting, the managing
and other underwriters will be selected by the Purchasers requesting the
registration. If the requested registration is not a firm commitment
underwritten offering and Maxtor requests that it be made in such an offering
of the same size and during the same period, the requesting Purchaser will
change the form of the offering to a firm commitment underwritten offering
provided that the managing and other underwriters and the terms of the
underwriting, including without limitation the underwriters discount, are
reasonably satisfactory to the requesting Purchaser(s).
8.2 "Piggyback" Registration.
If at any time Maxtor proposes to register any of its securities
under the Securities Act either for its own account or for the account of a
security holder or security holders (except with respect to Registration
Statements filed on Form S-4 or on a Form S-8 relating to employee stock
benefit programs or such other similar forms then in effect under the
Securities Act), it will at each such time give written notice to the
Purchasers and, upon the written request of any Purchaser, given within 30 days
after its receipt of Maxtor's notice, Maxtor will use its best efforts to cause
such shares of Common Stock as to which registration shall have been so
requested, to be included in the securities to be covered by the registration
statement proposed to be filed by Maxtor, all to the extent requisite to permit
the sale or other disposition by one or more Purchasers. Notwithstanding any
other provision of this Section 8.2, in the case of a firm commitment
underwritten offering of shares to be issued by Maxtor, if the managing
underwriter determines that the marketing factors require a limitation of the
number of shares to be sold, the underwriter may exclude the necessary number
of shares held by security holders from such registration and underwriting. In
such event, the shares of Common Stock held by any Purchaser shall be reduced
or excluded on a pro rata basis with shares held by other selling stockholders.
In the case of a firm commitment underwritten offering, any request by a
Purchaser pursuant to this Section 8.2 to register shares of Common Stock must
specify that such shares are to be included in the underwriting on the same
terms and conditions as the shares of Common Stock otherwise being sold through
underwriters under such registration.
8.3 Registration Procedures and Expenses.
If and whenever Maxtor is required by the provisions contained
herein to use its best efforts to effect the registration of any of the Shares
under the Securities Act, the selling Purchaser will furnish in writing such
information as is reasonably requested by Maxtor for inclusion in the
registration statement relating to such offering and such other information and
documentation as Maxtor shall reasonably request, and Maxtor will, as
expeditiously as possible:
(a) Prepare and file with the SEC a registration
statement (including a prospectus therein) with respect to such securities and
use its best efforts to cause such registration statement to become and remain
effective for such period as may be necessary to permit the successful
marketing of such securities but not exceeding 90 days for an offering pursuant
to Section 8.1 hereof; or, with regard to an offering pursuant to Section 8.2
hereof, for the period associated with the offering which gave rise to rights
under Section 8.2; provided, in each case, that
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the Maxtor Board of Directors may request the Purchaser(s) requesting the
registration to delay the time for the filing of the offering for up to 90 days
in the aggregate due to material damage that would result to Maxtor from
registration without the requested delay on account of specific pending
transactions or developments designated by the Board, and the Purchasers and
Maxtor will cooperate with one another in order to agree upon a schedule for
the offering that fairly accommodates the interests and concerns of the
parties.
(b) Prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to comply with the provisions of the
Securities Act; and to keep such registration statement effective for that
period of time specified in Section 8.3(a);
(c) Furnish to the selling Purchaser such number of
prospectuses and preliminary prospectuses in conformity with the requirements
of the Securities Act, and such other documents as such Purchaser may
reasonably request in order to facilitate the public sale or other disposition
of the shares being sold by the Purchaser;
(d) If requested by any selling Purchaser, furnish
an opinion of counsel in the form customarily rendered to underwriters in firm
commitment underwritten offerings, addressed to such Purchaser and containing
substantially the following provisions: (1) that the registration statement
covering such registration of securities has become effective under the
Securities Act; (2) that, to the best of the knowledge of such counsel, no stop
order suspending the effectiveness thereof has been issued and no proceedings
for that purpose have been instituted or are pending or threatened under the
Securities Act; (3) that at the time the registration statement became
effective, the registration statement and the related prospectus complied as to
form in all material respects with the requirements of the Securities Act and
the applicable rules and regulations of the SEC thereunder (except that such
counsel need express no opinion as to financial statements and related
schedules contained therein); (4) that while such counsel has not independently
verified the accuracy or completeness of the information contained therein,
such counsel has no reason to believe that the registration statement at the
time it became effective or the prospectus contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; (5) that the
descriptions in the registration statement and the prospectus, and any
amendments or supplements thereto, of all legal and governmental matters and
all contracts, documents and instruments are materially correct; (6) if such
offering is an underwritten offering, that such counsel does not know of any
legal or governmental proceedings, pending or threatened, required to be
described in the registration statement or prospectus, or any amendment or
supplement thereto, which are not described as required, nor of any contracts
or document or instruments of character required to be described in the
registration statement or prospectus, or any amendment or supplement thereto,
or to be filed as exhibits to the registration statement which are not
described or filed as required; and (7) as to the capitalization and corporate
status of Maxtor and, to the extent requested by any underwriter, the
Subsidiaries, if any;
(e) If requested by any underwriter of the offering
and permitted by applicable rules and guidelines, furnish such Purchaser a
letter from the independent certified public accountants of Maxtor in the form
customarily furnished to underwriters in firm commitment
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underwritten offerings, addressed to such Purchaser, providing substantially
that such accountants are independent certified public accountants within the
meaning of the Securities Act and that in the opinion of such accountants, the
financial statements and other financial data of Maxtor included in the
registration statement and the prospectus, and any amendment or supplement
thereto, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act. Such letter shall additionally
cover such other financial matters (including information as of the date of
such letter) with respect to the registration in respect of which such letter
is being given as the selling Purchaser may reasonably request; and
(f) Use its best efforts to register or qualify the
shares covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as the selling Purchaser shall reasonably
request and do any and all other acts and things which may be necessary or
desirable to enable such Purchaser to consummate the public sale or other
disposition in such jurisdiction of the shares owned by such Purchaser.
All expenses incurred by Maxtor in complying with Sections 8.1,
8.2 and 8.3 hereof, including without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for Maxtor, blue sky fees and expenses, and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employee of Maxtor which shall be
paid in any event by Maxtor) are herein called "Registration Expenses"; and all
underwriting discounts and selling commissions applicable to the sales are
herein called "Selling Expenses." Maxtor will pay all Registration Expenses in
connection with up to 7 registrations pursuant to Sections 8.1 and, if so
designated by the requesting Purchaser(s) as one of such 7 registrations, 8.2,
except as may be required to update any registration statement kept effective
for more than the period of time required by Section 8.3(a). All Selling
Expenses in connection with each registration pursuant to Section 8.1 or 8.2
shall be borne by the seller of the securities on which they are imposed. All
Registration Expenses other than those payable by Maxtor shall be borne by
Maxtor, the selling Purchasers and any other selling stockholders pro rata in
proportion to the securities covered thereby being sold by them. Each selling
stockholder shall bear the fees and costs of its own counsel.
In the event a Purchaser proposes to sell shares of Common Stock
in accordance with the provisions contained herein pursuant to an underwritten
offering, Maxtor shall have the right to approve the managing underwriters for
such offering, provided, however, that such approval shall not be unreasonably
withheld.
8.4 Indemnification.
In the event of a registration of any shares of Common Stock
under the Securities Act pursuant to the provisions contained herein, Maxtor
will hold harmless the Purchasers and each underwriter of such shares and each
other Person, if any, who controls a Purchaser or such underwriter within the
meaning of Section 15 of the Securities Act, and each officer, director,
employee and advisor of each of the foregoing, against any expenses, losses,
claims, damages or liabilities, joint or several, to which a Purchaser or such
underwriter or controlling Person may become subject under the Securities Act,
any state securities law or otherwise, including any of the foregoing incurred
in settlement of any litigation, commenced or threatened, insofar as such
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<PAGE> 44
expenses, losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained, on the effective date thereof, in any
registration statement under which such shares are registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or any violation by Maxtor of any rule or regulation promulgated
under the Securities Act or any state securities law applicable to Maxtor and
relating to action or inaction required of Maxtor in connection with any
registration, qualification or compliance; and will reimburse the Purchasers
and each such underwriter and each such controlling Person for any legal or any
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that Maxtor will not be liable in any such case to the extent that any such
expense, loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, said preliminary prospectus or said
prospectus or said amendment or supplement in reliance upon and in conformity
with written information furnished to Maxtor through an instrument duly
executed by a Purchaser or such underwriter specifically for use in the
preparation thereof; and provided, further, that if any expenses, losses,
claims, damages or liabilities arise out of or are based upon an untrue
statement, alleged untrue statement, omission or alleged omission contained in
any preliminary prospectus which did not appear in the final prospectus, Maxtor
shall not have any liability with respect thereto to (i) a Purchaser or any
Person who controls such seller within the meaning of Section 15 of the
Securities Act, if such Purchaser delivered a copy of the preliminary
prospectus to the Person alleging such expenses, losses, claims, damages or
liabilities and failed to deliver a copy of the final prospectus, as amended or
supplemented if it has been amended or supplemented, to such Person at or prior
to the written confirmation of the sale to such Person or (ii) any underwriter
or any Person who controls such underwriter within the meaning of Section 15 of
the Securities Act, if such underwriter delivered a copy of the preliminary
prospectus to the Person alleging such expenses, losses, claims, damages or
liabilities and failed to deliver a copy of the final prospectus, as amended or
supplemented if it has been amended or supplemented, to such Person at or prior
to the written confirmation of the sale to such Person.
In the event of any registration of any shares of Common Stock
under the Securities Act pursuant to the provisions contained herein, each
Purchaser will indemnify and hold harmless Maxtor and each Person, if any, who
controls Maxtor within the meaning of Section 15 of the Securities Act, each
officer of Maxtor who signs the registration statement, each director of Maxtor
and each underwriter and each Person who controls any underwriter within the
meaning of Section 15 of the Securities Act, against any and all such expenses,
losses, claims, damages or liabilities referred to in the first paragraph of
this Section 8.4, if the statement, alleged statement, omission or alleged
omission in respect of which such expense, loss, claim, damage or liability is
asserted was made in reliance upon and in conformity with information furnished
in writing to Maxtor by or on behalf of a Purchaser specifically for use in
connection with the preparation of such registration statement, preliminary
prospectus, prospectus, amendment or supplement; provided, however, that if any
expenses, losses, claims, damages or liabilities arise out of or are based upon
an untrue statement, alleged untrue statement, omission or alleged omission
contained in any preliminary prospectus which did not appear in the final
prospectus, a Purchaser shall not have any such liability with respect thereto
to (i) Maxtor, any Person who controls Maxtor within the meaning
23 Page 44 of 194
<PAGE> 45
of Section 15 of the Securities Act, any officer of Maxtor who signed
the registration statement or any director of Maxtor, if Maxtor delivered a
copy of the preliminary prospectus to the Person alleging such expenses,
losses, claims, damages or liabilities and failed to deliver a copy of the
final prospectus, as amended or supplemented if it has been amended or
supplemented, to such Person at or prior to the written confirmation of the
sale to such Person or (ii) any underwriter or any Person controlling such
underwriter within the meaning of Section 15 of the Securities Act, if such
underwriter delivered a copy of the preliminary prospectus to the Person
alleging such expenses, losses, claims, damages or liabilities and failed to
deliver a copy of the final prospectus, as amended or supplemented, if it has
been amended or supplemented, to such Person at or prior to the written
confirmation of the sale to such Person.
Each party entitled to indemnification under this Section 8.4
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting thereon, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at its own
expense, and provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 8.4 except to the extent such failure resulted
in actual detriment to the Indemnifying Party. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
8.5 Registration Not Required.
Notwithstanding anything in this Section 8, Maxtor shall have no
obligation to register shares of Common Stock requested to be registered
hereunder if, in the opinion of counsel to Maxtor, reasonably satisfactory in
form and substance to counsel for the Purchasers, all of the shares of Common
Stock requested to be registered can be sold within a given three-month period
without compliance with the registration requirements of the Securities Act
pursuant to Rule 144.
8.6 Reporting Requirements.
Maxtor shall comply with the reporting requirements of Section
15(d) of the Securities Exchange Act of 1934, as amended (whether or not it
shall be required to do so pursuant to the provisions of said Section 15(d)),
and shall comply with all other public information reporting requirements
required by the SEC as a condition to the availability of an exemption,
presently existing or hereafter adopted, from the Securities Act for the sale
of shares of Common Stock.
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<PAGE> 46
8.7 Assignment.
The rights of the Purchasers under this Section 8 may be
assigned to any permitted transferee of Shares, or to a transferee of not less
than 2,000,000 shares of Common Stock issued or issuable on conversion of the
Shares.
SECTION 9. MISCELLANEOUS
9.1 Transactional Expenses.
Whether or not the transactions contemplated by this agreement
are consummated, each party shall pay its own fees and expenses incident to the
negotiation, preparation, execution, delivery and performance hereof and
thereof, including, without limitation, the fees and expenses of its counsel,
accountants and other experts.
9.2 Exclusivity.
Maxtor agrees that it will not, unless and until this Agreement
is terminated in accordance with its terms, directly or indirectly:
(i) initiate, solicit or encourage any discussions
with any third party regarding any sale or acquisition of Maxtor or its
assets or the issuance of any additional shares of Maxtor stock, or
(ii), subject to the fiduciary obligations of its
directors, hold any such discussions with third parties (whether or not
such discussions have heretofore been held with such third party) or
enter into any agreement with any party other than a Purchaser
concerning any sale or acquisition of Maxtor or its assets or the issuance of
shares of Maxtor stock, other than, in each case, issuances pursuant to
employee benefit plans identified pursuant Section 2.15.
9.3 Access; Confidentiality.
(a) Until the Closing or the termination of this Agreement in
accordance with Section 9.9, whichever first occurs, Maxtor will (i) provide
all of the Purchasers and their employees, representatives, counsel and
accountants, full access, as reasonably requested, to the financial statements,
contracts, books, records, and other relevant information pertaining thereto,
and to the facilities, officers, legal staff, employees, independent public
accountants and legal counsel of Maxtor and (ii) permit the Purchasers and
their employees, representatives, counsel and accountants to make copies and
retain other documentation with respect to Maxtor and the operations, financial
position, prospects and Properties of Maxtor (subject to reasonable limitations
on the copying and retention of key nonpublic technical information).
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<PAGE> 47
(b) Any information disclosed by the parties pursuant
hereto or in connection with the transactions contemplated herein shall be
subject to the Nondisclosure Agreement between the Maxtor and HEI dated as of
May 1, 1993. Maxtor will use its best efforts to mark "CONFIDENTIAL" the
confidential documents given to the Purchasers after the date hereof, but
(notwithstanding the terms of such Nondisclosure Agreement) the failure to so
mark (or to have so marked after August 18, 1993) will not prejudice Maxtor's
rights thereunder if the document was in fact confidential.
9.4 Publicity.
Until the Closing or the termination of this Agreement in
accordance with its terms, none of the Purchasers or Maxtor shall, directly or
indirectly, issue any press release, or make any public statement, concerning
the transactions contemplated by this Agreement without the prior written
consent of all of the Purchasers (in the case of such a release or statement by
Maxtor) or of Maxtor (in the case of such a release, statement by a Purchaser).
This Section 9.4 shall not, however, preclude any party from making any
disclosure required by applicable law, provided that in the event any party, or
any officer, director, employee, agent or representative of a party, believes
that any press release, public statement or other disclosure is so required,
such party will notify and consult with the other parties with respect thereto
as promptly as is practicable under the circumstances.
9.5 Cooperation On Other Matters.
(a) Subject to the Nondisclosure Agreement referred to in
Section 9.3(b), Maxtor agrees to cooperate where feasible with the Purchasers
on research and development, marketing and manufacturing matters, including
involving members of the Purchasers' staffs in future product and manufacturing
development efforts and providing the Purchasers and their Affiliates the
opportunity to participate on a most-favored supplier basis in supplying
components for use in Maxtor products, such as DRAMs and SRAMs and in providing
subcontract manufacturing services. Such cooperation shall include, among
other things, entering into royalty-free cross-licenses, exchanges or similar
transactions relating to patents for disk drive components such as ASICs,
heads, motors, media, printed circuit board assemblies and mechanical parts
and, subject to the consent of Kubota Corporation, relating to magneto-optical
disk drives; and such other cooperation on technical and marketing matters as
is contemplated by this Section 9.5 and as shall be mutually agreed upon after
the Closing. Maxtor will supply disk drives to HEI for use in its systems on a
most-favored customer basis. Maxtor will consult with the Purchasers
concerning the appropriate strategy for Maxtor's interest in Maxoptix.
(b) Maxtor and the Purchasers will each have the
opportunity to designate employees to be employed, on mutually agreeable terms,
by the other. At the Purchasers' request made at a time when the right to
nominate the Chairman of the Board in accordance with paragraph D(5) of Article
FOURTH of the Restated Articles continues in effect, one of the directors
nominated by them will be appointed an executive officer and employee of
Maxtor, with a mutually agreed title and responsibilities, who will be included
in ongoing senior management reporting and discussion. The Purchasers and
Maxtor will mutually agree on arrangements for ongoing reporting of Maxtor
financial, business and product information.
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9.6 Shareholder Approval.
Maxtor shall promptly submit to its Shareholders for approval
both the transactions contemplated by this Agreement and the Restated Articles,
and shall furnish the Purchasers drafts of the related proxy statement not less
than 5 Business Days prior to its filing. Subject to the fiduciary obligations
of its directors, Maxtor will use its best efforts to obtain such approval.
9.7 Consummation of Closing.
Each party to this Agreement agrees to use its best efforts to
cause the conditions to Closing to be satisfied and not to willfully take any
action which would prevent a condition to Closing from being satisfied,
including without limitation any action that would have the effect of making
any representation or warranty contained in this Agreement or in any document
to be delivered pursuant to this Agreement untrue. Each party will cooperate
as reasonably requested by another party in submitting any necessary filing
with an Governmental Agency or providing information concerning such party to
any Governmental Agency. The obligations of Maxtor under this Section 9.7 will
be subject to the fiduciary obligations of its directors as stated in Section
9.2(ii), and Maxtor will notify the Purchasers immediately if the Maxtor board
of directors takes or determines to take any action inconsistent with this
Section 9.7 (excluding this sentence) pursuant to such fiduciary duties.
9.8 Export Controls.
Each of the Purchasers agree not to export, directly or
indirectly, (a) any technical data it has or will acquire from Maxtor pursuant
to this Agreement, or (b) any product utilizing any such data, to any country
for which any U.S. Governmental Agency at the time of export requires an export
license or other governmental approval without first obtaining such license or
approval.
9.9 Termination.
(a) The "Last Closing Date" shall be November 24,
1993 or, if an extension (for up to 45 days) is requested by a Purchaser or
Maxtor to secure a required consent of a Governmental Agency and such extension
is consented to by all other parties, which consent shall not be unreasonably
withheld, the extended date so requested. Any party shall have the right to
terminate any further obligation it has hereunder (other than under Sections
6.3, 9.3(b) and 9.8 which shall survive any such termination) if (i) the
Closing has not occurred by the Last Closing Date (including any such
extension), and (ii) such nonoccurrence does not proximately result from a
breach hereof by the terminating party. In addition, this Agreement and any
further obligations of the parties hereunder (other than under Sections 6.4,
9.3(b) and 9.8, which shall survive any such termination) may be terminated at
any time prior to the Closing Date, whether before or after Shareholder
approval of the transactions, by mutual consent of Maxtor and the Purchasers by
action taken by their respective Boards of Directors or by Maxtor in connection
with entering into another agreement pursuant to Section 9.2(ii).
(b) If Maxtor terminates this Agreement, pursuant
to Section 9.2(ii) or 9.9(a) or otherwise, and Maxtor, prior to January 18,
1994, consummates a transaction or enters into
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a definitive agreement to consummate a transaction that involves the sale or
acquisition of Maxtor or the issuance of additional shares of Maxtor stock
(other than shares issued pursuant to the employee benefit plans listed in
SCHEDULE 2.15 or issued in a public offering) to any party other than a
Purchaser and which has a higher value to Maxtor than the transaction
contemplated herein, then Maxtor agrees to pay the Purchasers (pro rata
according to the number of Shares to be purchased by each) $4,000,000
simultaneously with the consummation of such transaction; provided, however,
that Maxtor shall have no obligation to pay such amount if (i) Maxtor shall
have terminated this Agreement due to an intentional misstatement, an
intentional omission or an intentional breach by a Purchaser of one or more
representations or warranties contained in Section 3 hereof or (ii) a Purchaser
shall have willfully and materially breached a material covenant of such
Purchaser contained herein. In the case of a termination by Maxtor pursuant to
Section 9.2(ii), the payment of such amount (together with any interest owing
under Section 9.12) shall constitute the sole compensation and remedy owing to
the Purchasers from Maxtor or any third party on account of such termination
(without prejudice to Maxtor's obligations under this Agreement which survive
such termination).
9.10 Other Agreements Superseded; Waiver and Modification, Etc.
This Agreement supersedes all prior agreements or understandings
(including, without limitation the Letter of Intent) written or oral, between
Maxtor and any of the Purchasers, relating to the acquisition of shares of
Maxtor, and incorporates the entire understanding of the parties with respect
thereto; provided that any and all remedies that would in the absence of this
Section 9.10 be available for any breach of paragraph 8, 9, 11, 12, 13 or 14 of
such Letter of Intent occurring prior to the parties' entering into this
Agreement shall continue to be available and enforceable.
This Agreement may be amended or supplemented only by a written
instrument signed by the party against whom the amendment or supplement is
sought to be enforced. The party benefited by any condition or obligation may
waive the same, but such waiver shall not be enforceable by another party
unless made by written instrument signed by the waiving party.
9.11 Notices.
Any notice or other communication under or relating to this
Agreement shall be given in writing and shall be deemed sufficiently given and
served for all purposes when personally delivered or given by telefax with
receipt verified by printout of the transmitting machine (or otherwise
confirmed in writing, in which case the notice shall be deemed given when such
written confirmation is received):
(a) If to any Purchaser:
Hyundai Electronics Industries Co., Ltd.
66, Jeokeon-dong, Chongro-Ku
Seoul, Korea
Attn: Corporate Planning and Coordination Office
Fax: 011-82-2-733-2145, -2146 or -2147
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<PAGE> 50
with a copy to:
McCutchen, Doyle, Brown & Enersen
Three Embarcadero Center
San Francisco, California 94111
Attn: Bartley C. Deamer
Fax: (415) 393-2286
(b) If to Maxtor:
211 River Oaks Parkway
San Jose, CA 95134
Attn: Mark Chandler, General Counsel
Fax: (408)432-4169
with a copy to:
Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301
Attn: Howard Clowes
Fax: (415) 327-3699
Unless otherwise expressly stated therein, any notice given by HEI shall be
deemed to be given by all Purchasers.
9.12 Interest.
Any amounts due under Sections 6.2, 6.3, 8.4 and 9.9(b) shall
bear interest at the Agreed Rate from the time payment is due to the time of
payment.
9.13 Law Governing; Federal Forum.
(a) This Agreement shall be construed in accordance
with and governed by the laws of the State of California.
(b) If any action is brought within the United States
under or relating to this Agreement and the federal trial courts have
jurisdiction over the subject matter of such action, such action may be brought
only in such federal courts.
9.14 Successors; Assignability.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Neither this Agreement nor any right, remedy, obligation or liability
hereunder may be assigned by either of the parties hereto without the prior
written consent of the other parties hereto with the exception of any
assignment by one
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<PAGE> 51
Purchaser to another Purchaser or an Affiliate of such Purchaser or
another Purchaser. (Any such assignment to another Purchaser or such Affiliate
will not, however, relieve the assigning Purchaser of its obligations
hereunder.)
9.15 Counterparts.
This Agreement may be executed in any number of counterparts,
and each such executed counterpart shall be deemed to be an original
instrument, but all such executed counterparts together shall constitute one
and the same instrument.
9.16 Parties in Interest.
Nothing in this Agreement, express or implied, is intended to
confer any rights or remedies under or by reason of this Agreement on any
Person other than the parties hereto and their respective permitted successors
and assigns, nor is anything in this Agreement intended to relieve or discharge
any obligation of any third Person to any party hereto or give any third Person
any right of subrogation or action over against any party hereto.
9.17 References.
Unless expressly indicated to the contrary, all references
herein to Sections and Exhibits refer to the specified part of this Agreement
and all references to Schedules refer to the specified Schedule of the
Disclosure Memorandum. All terms such as "herein," "hereby" or "hereunder"
refer to this Agreement as a whole.
9.18 Headings.
The headings used in this Agreement are provided for convenience
only and this Agreement shall be interpreted as though they did not appear
herein.
9.19 Fair Construction.
This Agreement shall be given fair and reasonable construction
in accordance with the intention of the parties. This Agreement shall not be
construed against the party preparing it, and shall be construed without regard
to the identity of the Person who drafted it or the party who caused it to be
drafted and shall be construed as if all parties had jointly prepared this
Agreement. It shall be deemed their joint work product, and each and every
provision of this Agreement shall be construed as though all of the parties
hereto participated equally in the drafting hereof; and any uncertainty or
ambiguity shall not be interpreted against any one party. As a result of the
foregoing, any rule of construction that a document is to be construed against
the drafting party shall not be applicable.
9.20 Business Days.
If the date on or by which any act is required to be performed
hereunder is not a Business Day, such date shall be extended to the next
Business Day.
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SECTION 10. GLOSSARY
As used in this Agreement, the following terms have the
respective meanings set forth below or in the location indicated:
Affiliate--any Person which controls, is controlled by or is
under common control with, another Person. For purposes of this
definition, "control" means the ability, directly or indirectly, to
elect or designate (in the absence of particular events or
circumstances) a majority of the directors (or Persons performing a
similar function) of a Person.
Agreed Rate--interest rate equal to 2% per year over the rate
announced by Bank of America National Trust and Savings Association as
its then-current reference rate or the maximum lawful rate, whichever is
less.
Agreement--This Stock Purchase Agreement, including the Exhibits
hereto and the Disclosure Memorandum, as it or they may be amended from
time to time in accordance with its terms.
Annual Financial Statements--Section 2.7.
Business Day--Any day which is not a Saturday, Sunday or a bank
holiday in the State of California or the Republic of Korea.
Closing--Section 1.2.
Closing Date--Section 1.2.
Common Stock--Section 1.1.
Disclosure Memorandum--The disclosure memorandum of even date
herewith executed by the parties hereto, containing the Schedules
referred to in Section 2 and any exceptions to the representations and
warranties made in Section 2.
Employee Plan--(i) each pension plan as defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which is qualified (or states in the plan document or any
government filing that it is qualified) under Section 401 of the Code
and which Maxtor sponsors or contributes to or with respect to which
Maxtor has or could incur any obligation or liability; (ii) each pro
plan, stock option, pension, severance, retirement or incentive
compensation plan and any other benefit plan or program and (iii) each
welfare plan as defined in Section 3(1) of ERISA.
GAAP--Section 2.7.
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<PAGE> 53
Governmental Agency--Any federal, state, local or foreign
government or any political subdivision thereof (including without
limitation the executive and legislative branches thereof) or any
department, commission, board, bureau, agency, court, panel or other
instrumentality of any kind of any of the foregoing.
Governmental Requirement--any federal, state, local or foreign
statute, law, order, judgment, decree, regulation or permit or any
requirement of any Governmental Agency.
HEI--Introductory paragraphs.
Indemnified Parties--Section 8.4.
Indemnifying Parties--Section 8.4.
Intellectual Property Rights--Section 2.10.
Interim Financial Statements--Section 2.7.
Knowledge--Known to any executive officer or the principal legal
officer, the principal human resources officer or the principal
environmental officer of the entity making the representation without
any additional investigation other than inquiry of key employees
reporting to such executive or other officer.
Last Closing Date--Section 9.9.
Letter of Intent--Section 6.3(i).
Losses--Section 6.3.
Major Subsidiary--Any Subsidiary with more than 50 employees as
of the date of this Agreement.
Material Adverse Effect--With respect to Maxtor, a material
adverse effect, singly or cumulatively, on the business, Properties,
liabilities, financial condition, operations or prospects of Maxtor and
the Subsidiaries taken as a whole. With respect to a Purchaser, a
material adverse effect on the business, Properties, liabilities,
financial conditions, operations or prospects of such Purchaser.
Maxtor--Introductory paragraphs.
Person--An individual, partnership, corporation, trust or
unincorporated organization or a Governmental Agency.
Property--Any interest in any kind of property, asset or right,
whether real, personal or mixed, tangible or intangible, and wherever
located.
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<PAGE> 54
Purchase Price--Section 1.1.
Purchaser--Introductory paragraphs.
Purchaser Party--Section 6.3.
Registration Expenses--Section 8.3.
Regulated Material--Any substance, material or solid or other
waste that is, or whose release or disposal is, subject to any
Governmental Requirement or regulated by any Governmental Agency with
jurisdiction or whose release or disposal is actionable under applicable
law.
Restated Articles--Section 4.12.
Rights Agreement--The Rights Agreement dated as of January 27,
1988 between Maxtor and Bank of America National Trust and Savings
Association.
SEC--United States Securities and Exchange Commission.
Securities Act--the Securities Act of 1933, as amended.
Selling Expenses--Section 8.3.
Shareholder--A shareholder of Maxtor.
Shares--Introductory paragraphs.
Stock Rights--Section 2.6.
Subsidiaries--Section 2.5.
Taxes/Tax--Any and all federal, state, county, local or foreign
taxes, charges, levies, fees, imposts or other assessments of any nature
whatsoever, including, without limitation, income tax, profits tax,
gross receipts tax, corporation tax, capital transfer tax, stamp duty
and value added tax, payroll tax, sales tax, employment tax, use tax,
property tax, excise tax, withholding taxes, environmental or superfund
taxes, development gains tax, national insurance and earnings-related
contributions, income tax payable by way of pay-as-you-earn deductions,
and all costs, charges, interest, penalties, surcharges and expenses
related thereto or to any disallowance of any claim with respect
thereto.
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<PAGE> 55
IN WITNESS WHEREOF, the parties have executed this Stock
Purchase Agreement as of the date first above written.
MAXTOR CORPORATION
By________________________________
Laurence R. Hootnick
President and Chief
Executive Officer
HYUNDAI ELECTRONICS INDUSTRIES
CO., LTD.
By________________________________
Joo Yong Kim
President and
Representative Director
Class A Common Stock to be purchased:
5,844,000 shares
Aggregate purchase price:
$44,998,800
HYUNDAI HEAVY INDUSTRIES
CO., LTD.
By________________________________
Joo Yong Kim
Attorney-in-Fact
Class A Common Stock to be purchased:
4,870,000 shares
Aggregate purchase price:
$37,499,000
34 Page 55 of 194
<PAGE> 56
HYUNDAI CORPORATION
By_________________________________
Joo Yong Kim
Attorney-in-Fact
Class A Common Stock to be purchased:
4,870,000 shares
Aggregate purchase price:
$37,499,000
HYUNDAI MERCHANT MARINE CO., LTD.
By_________________________________
Joo Yong Kim
Attorney-in-Fact
Class A Common Stock to be purchased:
3,896,000 shares
Aggregate purchase price:
$29,999,200
35 Page 56 of 194
<PAGE> 57
EXHIBIT A
AMENDMENT
TO
RIGHTS AGREEMENT
This AMENDMENT TO RIGHTS AGREEMENT (the "Amendment") is entered into
as of the ___ day of September, 1993, between Maxtor Corporation, a Delaware
corporation (the "Company"), and The First National Bank of Boston (the "Rights
Agent").
RECITALS
WHEREAS, pursuant to that certain Rights Agreement dated as of January
27, 1988 (the "Rights Agreement"), the Board of Directors of the Company on
January 27, 1988 (i) authorized the issuance and declared a dividend of one
right (a "Right") for each share of Common Stock (as defined herein) of the
Company outstanding as of the close of business on February 8, 1988, each Right
representing the right to purchase one share of Common Stock of the Company
upon the terms and subject to the conditions set forth in the Rights Agreement,
and (ii) further authorized the issuance of one Right with respect to each
share of Common Stock of the Company that shall become outstanding between
February 8, 1988, and the Distribution Date (as defined in the Rights
Agreement);
WHEREAS, in accordance with Section 21 of the Rights Agreement,
Chemical Trust Company of California resigned as Rights Agent and The First
National Bank of Boston was appointed as the second successor Rights Agent
effective [__________, 1993];
WHEREAS, pursuant to Section 4.9 of that certain Stock Purchase
Agreement among the Company and Hyundai Electronics Industries Co., Ltd.,
Hyundai Heavy Industries Co., Ltd., Hyundai Corporation and Hyundai Merchant
Marine Co., Ltd. (collectively, the "Purchasers"), dated as of September ___,
1993 (the "Purchase Agreement"), the Company agreed to amend the Rights
Agreement as set forth herein.
WHEREAS, the Company has requested that the Rights Agreement be
amended, in accordance with Section 26 of the Rights Agreement, as set forth
herein and the Rights Agent is willing to amend the Rights Agreement as set
forth herein.
36 Page 57 of 194
<PAGE> 58
AGREEMENT
NOW, THEREFORE, the parties, intending to be legally bound, hereby
agree as follows:
1. Section 1(a) of the Rights Agreement is hereby deleted in its
entirety and amended to read in full as follows:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 20% or more of the outstanding
Common Stock; provided, however, that an Acquiring Person shall not
include (1) an Exempt Person (as such term is hereinafter defined) or
(2) upon the closing of the acquisition of Class A Common Stock (the
"Hyundai Closing") under that certain Stock Purchase Agreement among
the Company and Hyundai Electronics Industries, Co., Ltd., Hyundai
Heavy Industries Co., Ltd., Hyundai Corporation and Hyundai Marine
Co., Ltd. (collectively the "Purchasers") dated as of September __,
1993 (the "Purchase Agreement"), any of the Purchasers or their
Affiliates, so long as (i) the Purchasers and their Affiliates
continue following the Hyundai Closing collectively to hold shares of
Common Stock of the Company which constitute at least twenty percent
(20%) of the outstanding voting power of the Company and (ii) no
material breach of Section 7.2 of the Purchaser Agreement by Purchaser
or any Affiliate of a Purchaser has occurred.
2. Section 1(g) is deleted in its entirety and amended to read in
full as follows:
(g) "Common Stock" when used with reference to the Company
shall mean the common stock of the Company whether designated as
Common Stock or Class A Common Stock. "Common Stock" when used with
reference to any Person other than the Company which shall be
organized in corporate form shall mean the capital stock or other
equity security with the greatest per share voting power of such
Person or, if such Person is a Subsidiary of or is controlled by
another Person, the Person which ultimately controls such
first-mentioned Person. "Common Stock" when used with reference to
any Person other than the Company which shall not be organized in
corporate form shall mean units of beneficial interest which shall
represent the right to participate in profits, losses, deductions and
credits of such Person and which shall be entitled to exercise the
greatest voting power per unit of such Person.
3. All other provisions of the Rights Agreement shall remain
unchanged.
4. This Amendment may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall constitute one
instrument.
37 Page 58 of 194
<PAGE> 59
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed themselves or by their respective duly authorized representatives as
of the date first above written.
MAXTOR CORPORATION
By:______________________________________
Mark Chandler
Its: Vice President, Corporate
Development and General Counsel
[THE FIRST NATIONAL BANK OF BOSTON]
By:______________________________________
Its:_____________________________________
38 Page 59 of 194
<PAGE> 60
EXHIBIT B
RESTATED CERTIFICATE OF INCORPORATION
OF
MAXTOR CORPORATION
Maxtor Corporation, a corporation organized and existing under the
laws of the State of Delaware, hereby certifies that:
1. The name of the corporation is Maxtor Corporation. The
corporation's original certificate of incorporation was filed with the
Secretary of State of the State of Delaware on July 24, 1986.
2. This Restated Certificate of Incorporation restates and integrates
and further amends the provisions of the Certificate of Incorporation of this
corporation and has been duly adopted in accordance with Sections 242 and 245
of the General Corporation Law of the State of Delaware.
3. The text of the Certificate of Incorporation of this corporation
is hereby restated and further amended to read in its entirety as follows:
FIRST: The name of the corporation is Maxtor Corporation (hereinafter
sometimes referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in
the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the
City of Wilmington, County of New Castle. The name of the registered agent at
that address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of Delaware.
FOURTH:
A. Capitalized terms in this Article FOURTH, unless otherwise defined
herein, have the meaning set forth in Section E of this Article FOURTH.
B. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is two hundred five million
(205,000,000), consisting of:
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<PAGE> 61
(1) five million (5,000,000) share of Preferred Stock, par value
one cent ($.01) per share (the "Preferred Stock"); and
(2) two hundred million (200,000,000) shares of common stock, par
value one cent ($.01) per share, of which one hundred eighty million five
hundred twenty thousand (180,520,000) shares shall be designated as "Common
Stock" and nineteen million four hundred eighty thousand (19,480,000) shares
shall be designated as "Class A Common Stock."
C. The Board of Directors is authorized, subject to any limitations
prescribed by law, to issue the shares of Preferred Stock in one or more series
and, by filing a certificate pursuant to the applicable law of the State of
Delaware, to establish from time to time the number of shares to be included in
each such series and to fix the designation, voting powers, preferences, and
rights of the shares of each such series and any qualifications, limitations or
restrictions thereof. The number of authorized shares of Preferred Stock may
be increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority in voting
power of the Common Stock and Class A Common Stock, voting together as a single
class, without a vote of the holders of the Preferred Stock, or of any series
thereof, unless a vote of the holders of any series of Preferred Stock is
required pursuant to the certificate or certificates establishing such series
of Preferred Stock.
D. The rights, preferences and privileges of each share of all
classes of common stock shall be identical, except as otherwise expressly
provided herein.
(1) With respect to all matters upon which the holders of Class A
Common Stock are entitled to vote, each share of Class A Common Stock issued
and outstanding shall have the number of votes equal to the number of shares of
Common Stock into which such share of Class A Common Stock could be converted
on the record date for the vote of stockholders. The holders of the Class A
Common Stock shall be entitled to notice of each stockholders meeting in
accordance with the By-Laws of the Corporation and shall vote together as a
single class with the holders of the Common Stock on all matters submitted to a
vote of stockholders, except those matters required by law or by
40 Page 61 of 194
<PAGE> 62
this Restated Certificate of Incorporation to be submitted to the holders of
the Class A Common Stock, the Common Stock or any one series of Preferred Stock
voting separately as a class.
(2) Subject to paragraph D(3) of this Article FOURTH, the
Corporation shall not, without first obtaining the approval of the holders of a
majority of the outstanding shares of Class A Common Stock:
(i) terminate, acquire or commence a Core Line of Products, or
terminate the operations of or sell to a party which is not a wholly-owned
Subsidiary of the Corporation all or a majority of the Corporation's interest
held on the date of filing of this Restated Certificate of Incorporation in or
the assets of Maxoptix Corporation;
(ii) incur obligations to make an aggregate of capital
expenditures in any fiscal year in excess of $80,000,000;
(iii) make any decision respecting the location or
construction of new high-volume manufacturing facilities (other than the
expansion of high-volume manufacturing facilities existing at the time of such
decision) for the manufacture of finished disk drives and/or subassemblies of
disk drives;
(iv) enter into a Joint Venture in which the fair market
value of the Corporation's initial contribution, as determined by the Board in
good faith is in excess of $5,000,000;
(v) grant any Material Exclusive License;
(vi) enter into any Change in Senior Management
Compensation Arrangement Outside the Scope of the Corporation's Current
Practice;
(vii) consummate a Corporate Sale prior to the fifth
anniversary of the date of initial issuance of the Class A Common Stock;
(viii) consummate a Corporate Sale on or after the fifth
anniversary of the date of initial issuance of the Class A Common Stock,
unless: (A) if the Corporate Sale is proposed by the Corporation in the
absence of an offer from a third party, (x) Hyundai has not provided the
Corporation, within thirty (30) days of receipt by Hyundai of notice from the
Corporation describing in reasonable detail the terms of the proposed Corporate
Sale (the "Proposal Notice"), notice of
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<PAGE> 63
Hyundai's non-binding intent to be the acquiror on substantially the same terms
as set forth in the Proposal Notice (the "Acquisition Notice"); or (y)(I)
Hyundai has provided the Corporation, within thirty days of its receipt of the
Proposal Notice, with an Acquisition Notice, but (II) Hyundai fails to
negotiate in good faith in accordance with the terms of the Proposal Notice
(provided that the Corporation has negotiated in good faith in accordance with
such terms) and (III) the failure of Hyundai to negotiate in good faith remains
uncured thirty (30) or more days after its receipt from the Corporation of
notice of such failure; or (z) if a definitive agreement for such sale is not
entered into within ninety (90) days of the date of Hyundai's receipt of the
Proposal Notice (provided that the Corporation has negotiated in good faith in
accordance with the terms of the Proposal Notice); provided that any Corporate
Sale which the Corporation consummates without further notice and approval from
Hyundai after fulfilling the requirements of (x), (y) or (z) must be on
substantially the terms and conditions contained in the Proposal Notice; or (B)
if the Corporation receives an offer from a third party proposing a Corporate
Sale which the Corporation desires to accept, (x) Hyundai is given prompt
written notice from the Corporation of the initial expression of interest by
such third party and (y) Hyundai fails, within thirty (30) days after the
Corporation furnishes Hyundai a copy of the definitive agreement which the
Corporation desires to enter into with the third party for such sale, to enter
into a binding agreement with the Corporation on substantially the same terms
and conditions as set forth in the definitive agreement so furnished by Hyundai
and (z) the Corporation enters into a binding agreement and consummates, within
one hundred eighty (180) days of furnishing of such definitive agreement, the
Corporate Sale on substantially those terms and conditions as set forth in the
definitive agreement so furnished.
(ix) create or issue any stock ranking senior to the
common stock with respect to dividends or with respect to distributions upon
liquidation or carrying any voting, consent, conversion, exchange, purchase or
other rights different from or in addition to the rights which a holder of an
equivalent number of shares of Common Stock would have or which imposes
restrictions on the Corporation which would not be imposed by an equivalent
number of shares of Common Stock, or enter into any transaction involving the
issuance of securities, or right to acquire
42 Page 63 of 194
<PAGE> 64
securities, constituting (or which upon exercise or conversion would
constitute) twenty percent (20%) or more of the Voting Stock.
(3) The special rights of the Class A Common Stock to vote with
respect to the matters set forth in paragraph D(2) of this Article FOURTH will
immediately cease and terminate at such time as the holders of the Class A
Common Stock no longer hold, in the aggregate, either (a) at least 19,480,000
shares (less any shares, up to 80,000 in the aggregate, which one or more
holders has been required to transfer or surrender in order to comply with any
applicable statute, regulation, order or other legal requirement) or Class A
Common Stock and/or Common Stock issued upon conversion of Class A Common Stock
(as adjusted, in each case, for any stock split, stock dividend,
recapitalization or similar event) provided that such shares, together with
other shares of Voting Stock held by such holders constitute at least twenty
percent (20%) of the voting power of the Voting Stock, or (b) at least thirty
percent (30%) by voting power of the Voting Stock, provided that such rights
shall terminate only if and on such date as the record holders of the Class A
Common Stock have been provided with written notice by the Corporation that the
provisions of clause (a) and (b) are not satisfied, and ninety (90) days have
elapsed from the date of such notice and such provisions remain unsatisfied at
the end of such ninety (90) day period.
(4) Subject to paragraph D(6) of this Article FOURTH, the holders
of the Class A Common Stock as such, by written consent of the holder or
holders of a majority of the outstanding shares of Class A Common Stock, shall
be entitled to nominate the number of directors equal to the number (with any
fraction rounded to the nearest whole number (or, if equidistant between two
whole numbers, the next highest whole number)) obtained by multiplying the
total number of authorized directors by a fraction, the numerator of which is
the total number of shares of Voting Stock held by the holders of the Class A
Common Stock as of the record date for the annual meeting of stockholders (or
as of the effective date of any change in the authorized number of directors)
at which directors are to be elected, and the denominator of which is the total
number of shares of Voting Stock as of the record date for the annual meeting
of stockholders (or as of the effective date of any change in the authorized
number of directors) at which directors are to be elected, provided
43 Page 64 of 194
<PAGE> 65
that (A) in any case in which the foregoing formula would entitle the holders
of the Class A Common Stock to elect one-half or more of the number of
authorized directors without holding one-half or more by voting power of the
Voting Stock, the number of directors that the holders of the Class A Common
Stock is permitted to nominate will be reduced by one and (B) the number of
directors which the Class A Common Stock are entitled to nominate shall be
reduced by the number of directors previously nominated by such holders
pursuant to this paragraph 4 (or nominated pursuant to Section 4.10 of the
Stock Purchase Agreement dated September 10, 1993 among the Corporation,
Hyundai Electronics Industries Co., Ltd. and certain other purchasers (the
"Hyundai Purchase Agreement")) who will continue in office after such record
date or effective date. While the foregoing nomination rights are in effect,
the balance of the nominees for directors submitted by the Corporation to its
stockholders at any annual meeting of stockholders shall be selected by the
Board of Directors, provided that the vote in favor of such other nominees
shall include the vote of at least a majority of the directors not nominated by
the Class A Common Stock pursuant to this paragraph 4 (or such Stock Purchase
Agreement). If the number of directors which the Class A Common Stock is
entitled to nominate increases due to an increase in the total number of
authorized directors and the application of the formula set forth above in this
paragraph (4), or if any director so nominated ceases to be a director of the
Corporation, whether as a result from death, resignation, retirement,
disqualification, removal from office or other cause, the vacancy so created
may be filled only by a majority vote of the remaining directors so nominated
then in office, though less than a quorum, or, if no such directors are then in
office, by the holders of the Class A Common Stock. Notwithstanding anything
else in this Restated Certificate of Incorporation, in the event that a holder
of Class A Common Stock does not comply in a significant respect with the
voting provision set forth in Section 7.5 of the Hyundai Purchase Agreement,
then such shares shall not be entitled to be voted for such election without
the consent of the majority of the directors other than any directors nominated
by the holders of the Class A Common Stock under this paragraph D(4) of this
Article FOURTH.
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<PAGE> 66
(5) Subject to paragraph D(6) of this Article FOURTH, the Board of
Directors of the Corporation shall elect as the Chairman of the Board from
among the directors then serving such director as is designated in any written
consent of the holders of a majority of the Class A Common Stock.
(6) (i) The right of the Class A Common Stock to designate the
director to be elected as the Chairman of the Board as set forth in paragraph
D(5) of this Article FOURTH will immediately cease and terminate permanently at
such time as the holders of the Class A Common Stock no longer collectively
hold of record either (a) at least 15,584,000 shares of Class A Common Stock
(as adjusted) for any stock split, stock dividend, recapitalization or similar
event) or (b) at least 11,688,000 shares of the Class A Common Stock (as
adjusted for any stock split, stock dividend, recapitalization or similar
event) provided that such shares, together with other shares of Voting Stock
held by such holders, constitute at least twenty percent (20%) by voting power
of the Voting Stock, provided that such rights shall terminate only if and on
such date as the record holders of the Class A Common Stock have been provided
with written notice by the Corporation that the provisions of clause (a) and
(b) are not satisfied, and ninety (90) days have elapsed from the date of such
notice and such provisions remain unsatisfied at the end of such ninety (90)
day period.
(ii) The right of the Class A Common Stock to nominate
directors set forth in paragraph D(4) of this Article FOURTH will be suspended
and shall have no effect during any period and for such times as the holders of
the Class A Common Stock do not hold of record either (a) at least 15,584,000
shares of Class A Common Stock and/or Common Stock issued upon conversion of
Class A Common Stock (as adjusted, in each case, for any stock split, stock
dividend, recapitalization or similar event) or (b) at least twenty percent
(20%) by voting power of the Voting Stock, provided that such rights shall be
suspended only if and on such date as the record holders of the Class A Common
Stock have been provided with written notice by the Corporation that the
provisions of clause (a) and (b) are not satisfied, and ninety (90) days have
elapsed from the date of such notice and such provisions remain unsatisfied at
the end of such ninety (90) day period.
(7) Holders of Class A Common Stock shall have conversion rights
as follows:
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<PAGE> 67
(i) Each share of Class A Common Stock shall be convertible,
at the option of the holder thereof, at any time after the date of issuance of
such share, at the office of the Corporation or any transfer agent for the
Class A Common Stock, into one share of Common Stock, subject to adjustment as
provided in paragraphs D(7)(iv) and (v) of this Article FOURTH.
(ii) Before any holder of Class A Common Stock shall be
entitled to convert the same into shares of Common Stock, it shall surrender
the certificate or certificates therefor at the office of the Corporation or
any transfer agent for the Class A Common Stock, and shall give written notice
to the Corporation at such office that it elects to convert the same and shall
state therein the name or names in which it wishes the certificate or
certificates to be issued. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Class A Common
Stock, or to its nominee or nominees, a certificate or certificates for the
number of shares of Common Stock to which it shall be entitled. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Class A Common Stock to
be converted, and the person or person entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on such date.
(iii) No fractional shares of Common Stock shall be issued
upon conversion of the Class A Common Stock, and in lieu thereof the
Corporation shall pay to the holders otherwise entitled to such fraction an
amount in cash equal to such fraction multiplied by the then fair market value
of one share of Common Stock as determined by the Corporation s Board of
Directors. If more than one share of Class A Common Stock is surrendered for
conversion at any one time by the same holder, the number of full shares of
Common Stock to be issued upon conversion shall be computed on the basis of the
aggregate number of shares of Class A Common Stock so surrendered.
(iv) In case the Corporation shall at any time subdivide
the outstanding shares of Common Stock, or shall pay a dividend on its
outstanding Common stock payable in shares of Common Stock, without an
equivalent subdivision of, or dividend on, the Class A Common Stock, the number
of shares of Common Stock into which each share of Class A Common Stock is
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<PAGE> 68
convertible immediately prior to such subdivision or the issuance of such
dividend shall be proportionately increased, and in case the Corporation shall
at any time combine the outstanding shares of Common Stock, without an
equivalent combination of the Class A Common Stock, the number of shares of
Common Stock into which each share of Class A Common Stock is convertible
immediately prior to such combination shall be proportionately decreased,
effective at the close of business on the date of such subdivision, dividend or
combination, as the case may be.
(v) In case, at any time after the date of issuance of the
Class A Common Stock, of any capital reorganization or any reclassification of
the stock of the Corporation (other than a change in par value or from par
value to no par value or from no par value to par value or as a result of a
dividend payable in shares of Common Stock on, or a subdivision, split-up or
combination of the Common Stock), or the consolidation or merger of the
Corporation with or into another person (other than a consolidation or merger
in which the Corporation is the continuing corporation and which does not
result in any change in the Common Stock) or of the sale or other disposition
of all or substantially all the properties and assets of the Corporation as an
entirety to any other person, proper provisions shall be made such that each
share of Class A Common Stock shall be entitled pursuant to such
reorganization, reclassification, consolidation, merger, sale, or other
disposition to receive stock with substantially the same rights as the Class A
Common Stock, and convertible into the kind and number of shares of stock or
other securities or property of the corporation resulting from such
consolidation or surviving such merger (including the Corporation, if it
survives) or to which such properties and assets shall have been sold or
otherwise disposed to which the holder of the number of shares of Common Stock
deliverable (immediately prior to the time of such reorganization,
reclassification, consolidation, merger, sale or other disposition) upon
conversion of such shares would have been entitled upon such reorganization,
reclassification, consolidation, merger, sale or other disposition. The
provisions of this paragraph (7)(v) shall similarly apply to successive
reorganizations, reclassification, consolidations, mergers, sales or other
dispositions.
(vi) The Corporation shall at all times reserve and keep
available, out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of the
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Class A Common Stock, the full number of shares of Common Stock deliverable
upon the conversion of all Class A Common Stock from time to time outstanding.
The Corporation shall from time to time, in accordance with the laws of the
State of Delaware, increase the authorized amount of its Common Stock if at any
time the authorized number of shares of its Common Stock remaining unissued
shall not be sufficient to permit the conversion of all of the shares of Class
A Common Stock at the time outstanding.
(vii) Any shares of Class A Common Stock converted,
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof and may
not be reissued.
(8) Upon any Transfer of shares of Class A Common Stock, such
shares will convert automatically into shares of Common Stock in accordance
with paragraph D(7) of this Article FOURTH.
E. For the purposes of this Article FOURTH:
(1) "Affiliate" means, with respect to a person or entity, any
other person or entity which controls, is controlled by or is under common
control with, such person or entity. For purposes of this definition,
"control" means the ability, directly or indirectly, to elect or designate (in
the absence of particular events or circumstances) a majority of the directors
(or persons performing a similar function) of an entity.
(2) "Change in Senior Management Compensation Arrangement Outside
the Scope of the Corporation's Current Practice" means the entering into of any
written contract with any employee with the title of Chief Executive Officer,
President, Chief Operating Officer, Vice-President or Chief Financial Officer
of the Corporation which provides for a fixed term of employment or requires
the Corporation to pay benefits upon termination other than those generally
available to other employees of the Corporation.
(3) "Core Line of Products" means a complete form factor, such as
1.8-inch, 2.5-inch, 3.5-inch, or a line of products which are not data storage
products.
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(4) "Corporate Sale" means (i) a consolidation or merger of the
Corporation with or into any other corporation, entity or person (or group of
corporations, entities or persons, acting in concert) where the Corporation is
not the surviving corporation (unless the sole purpose of the transaction is to
change the Corporation's domicile) or where the stockholders of the Corporation
own less than a majority of the voting stock of the surviving corporation
immediately following such consolidation or merger, or (ii) the sale, transfer
or other disposition of all or substantially all of the assets of the
Corporation.
(5) "Material Exclusive License" means a license to make, use or
sell products incorporating any intellectual property owned by the Corporation
granted (other than in connection with a Corporate Sale) to a party which is
not a Subsidiary of the Corporation in an arms length transaction in
consideration of cash, securities or other property having a Fair Market Value
(as defined in Article EIGHTH) of at least $10,000,000, which license precludes
(or imposes restrictions or royalty obligations upon the Corporation of such
magnitude that they would effectively preclude) the right of the Corporation to
make, use or sell disk drive products incorporating such licensed intellectual
property or to license others to do so.
(6) "Hyundai" means Hyundai Electronics Industries Co., Ltd.,
Hyundai Heavy Industries Co., Ltd., Hyundai Corporation, Hyundai Merchant
Marine Co., Ltd. and any Affiliate of any or all of them; provided that, for
purposes of giving notice or documents required to be given pursuant to this
Article FOURTH, Hyundai shall mean the person to whom notice to any Purchaser
(as defined in the Hyundai Purchase Agreement) is required to be given pursuant
to Section 9.11 of the Hyundai Purchase Agreement.
(7) "Joint Venture" means an entity in which, upon formation, the
Corporation and its Subsidiaries collectively would own, directly or indirectly
between 20% and 80% of the outstanding equity interest.
(8) "Subsidiary" shall have the meaning ascribed to it in Article
EIGHTH.
(9) "Transfer" means any sale, exchange, transfer, gift,
assignment, or other disposition, whether voluntary or involuntary, other than
to a person or entity included in the definition of
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"Hyundai" and shall include any transaction or event following which an
Affiliate or Affiliates shall no longer be an Affiliate or Affiliates.
(10) "Voting Stock" means, taken together, all outstanding
shares of Common Stock, all outstanding shares of Class A Common Stock (counted
on an as-converted basis as if fully converted into Common Stock), and all
outstanding shares of Preferred Stock entitled to vote generally, without
regard to particular events or circumstances (counted, if convertible, on an
as-converted basis as if fully converted into Common Stock).
FIFTH: The following provisions are inserted for the management of
the business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
A. The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. In addition to the powers and
authority expressly conferred upon them by Statute or by this Restated
Certificate of Incorporation or the By-Laws of the Corporation, the directors
are hereby empowered to exercise all such powers and do all such acts and
things as may be exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by written
ballot unless the By-Laws so provide.
C. Any action required or permitted to be taken by the stockholders
of the Corporation must be effected at a duly called annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders, provided, however, that the vote of the holders
of the Class A Common Stock required under paragraph D(2) of Article FOURTH may
be effected by a consent in writing.
D. Special meetings of stockholders of the Corporation may be called
only by (i) the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors or (ii), at any time when
the nomination right of the Class A Common Stock pursuant to paragraph D(4) of
Article FOURTH is in effect, the holder or holders of a majority of the
outstanding Class A Common Stock. As used in this Restated Certificate of
Incorporation, the "total
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number of authorized directors" shall mean the number of directors which would
be in office were there no vacancies nor any unfilled newly created
directorships.
SIXTH:
A. The number of directors shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or not there
exist any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption), but shall not be less than
five (5). The directors shall be divided into three classes, as nearly equal
in number as reasonably possible, with the term of office of the first class to
expire at the 1994 annual meeting of stockholders, the term of office of the
second class to expire at the 1995 annual meeting of stockholders and the term
of office of the third class to expire at the 1996 annual meeting of
stockholders, provided that the term of office of directors in office on the
date of filing of this Restated Certificate of Incorporation is unaffected by
the filing of this Restated Certificate of Incorporation. At each annual
meeting of stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire shall be
elected for a term of office to expire at the third succeeding annual meeting
of stockholders after their election.
B. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
C. Any or all of the Directors may be removed from office at any
time, but only for cause and only by the affirmative vote of the holders of at
least a majority of the Voting Stock (as defined in Article FOURTH), voting
together as a single class.
SEVENT: The Board of Directors is expressly empowered to adopt, amend
or repeal By-laws of the Corporation. Any adoption, amendment or repeal of
By-laws of the Corporation by the Board of Directors shall require the approval
of a majority of the total number of authorized directors. The stockholders
shall also have power to adopt, amend or repeal the By-laws of the Corporation.
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EIGHTH: The stockholder vote required to approve Business
Combinations (as hereinafter defined) shall be as set forth in this Article
EIGHTH.
A. (1) Except as otherwise expressly provided in section B of this
Article EIGHTH:
(i) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (a) any Interested Shareholder (as
hereinafter defined) or (b) any other corporation (whether or not itself an
Interested Shareholder) which is, or after such merger or consolidation would
be, an Affiliate (as hereinafter defined) of an Interested Shareholder, except
for a merger or consolidation in which the Corporation is merged into or with
another corporation that owns or controls more than 80% of the outstanding
Voting Stock if such ownership was obtained in an exchange or tender offer
approved the Board of Directors as provided under Section 7.2(c) of the Hyundai
Stock Purchase Agreement and provided that the stockholders of the Corporation
receive in such merger or acquisition substantially the same property as would
have been received in such exchange or tender offer; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of transactions) to or
with any Interested Shareholder or any Affiliate of any Interested Shareholder
of any assets of the Corporation or any Subsidiary having an aggregate Fair
Market Value (as hereinafter defined) of ten percent (10%) of the total value
of the assets of the Corporation and its consolidated subsidiaries as reflected
in the most recent balance sheet of the Corporation; or
(iii) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any securities
of the Corporation or any Subsidiary to any Interested Shareholder or any
Affiliate of any Interested Shareholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate Fair Market Value
of $15,000,000 or more (other than purchases of shares of capital stock of the
Corporation by Hyundai in accordance with Section 6.2 of the Hyundai Purchase
Agreement); or
52 Page 73 of 194
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(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or on behalf of any
Interested Shareholder or any Affiliate of any Interested Shareholder; or
(v) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving any Interested
Shareholder) which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which is directly
or indirectly owned by any Interested Shareholder or any Affiliate of any
Interested Shareholder; shall require (1) the affirmative vote of the holders
of at least 66-2/3 percent of the Voting Stock (as defined in Article FOURTH),
voting together as a single class (it being understood that, for purposes of
this Article EIGHTH, each share of the Voting Stock shall have the number of
votes granted to it pursuant to Article FOURTH of this Restated Certificate of
Incorporation or any designation of the rights, powers and preferences of any
class or series of Preferred Stock made pursuant to said Article FOURTH (a
"Preferred Stock Designation")) and (2) the affirmative vote of the holders of
at least a majority of the voting power of all of the then outstanding shares
of Voting Stock other than the Voting Stock of which an Interested Shareholder
or an Affiliate of an Interested Shareholder is the beneficial owner, voting
together as a single class. Such affirmative votes shall be required
notwithstanding any other provisions of this Restated Certificate of
Incorporation or any provision of law or of any agreement with any national
securities exchange which might otherwise permit a lesser vote or no vote, but
such affirmative votes shall be required in addition to any affirmative vote of
the holders of any particular class or series of the Voting Stock required by
law, this Restated Certificate of Incorporation or any Preferred Stock
Designation.
(2) The term "Business Combination" as used in this Article EIGHTH
shall mean any transaction which is referred to in any one or more of
subparagraphs (i) through (v) of paragraph (1) of this section A.
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<PAGE> 75
B. The provisions of section A of this Article EIGHTH shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law, any
other provision of this Restated Certificate of Incorporation, any Preferred
Stock Designation or any agreement with any national securities exchange, if,
in the case of a Business Combination that does not involve any cash or other
consideration being received by the stockholders of the Corporation, solely in
their respective capacities as stockholders of the Corporation, the condition
specified in the following paragraph (1) is met, or, in the case of any other
Business Combination, the conditions specified in either of the following
paragraphs (1) and (2) are met:
(1) The Business Combination shall have been approved by a
majority of the Continuing Directors (as hereinafter defined), it being
understood that this condition shall not be capable of satisfaction unless
there is at least one Continuing Director.
(2) All of the following conditions shall have been met:
(i) The consideration to be received by holders of shares of a
particular class of outstanding Voting Stock (as defined in Article FOURTH)
shall be in cash or in the same form as the Interested Shareholder has paid for
shares of such class of Voting Stock within the two-year period ending on
and including the date on which the Interested Shareholder became an Interested
Shareholder (the "Determination Date"). If, within such two-year period, the
Interested Shareholder has paid for shares of any class of Voting Stock with
varying forms of consideration, the form of consideration to be received per
share by holders of shares of such class of Voting Stock shall be either cash
or the form used to acquire the largest number of shares of such class of
Voting Stock acquired by the Interested Shareholder within such two-year
period.
(ii) The aggregate amount of (x) the cash and (y) the Fair
Market Value, as of the date (the "Consummation Date") of the consummation of
the Business Combination, of the consideration other than cash to be received
per share by holders of Common Stock in such Business Combination shall be at
least equal to the higher of the following (it being intended that the
requirements of this paragraph 2(ii) shall be required to be met with respect
to all shares of Common
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Stock outstanding whether or not the Interested Shareholder has previously
acquired any shares of Common Stock):
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting dealers
fees) paid by the Interested Shareholder for any shares of Common Stock
acquired by it within the two-year period immediately prior to the date of the
first public announcement of the proposal of the Business Combination (the
"Announcement Date") or in the transaction in which it became an Interested
Shareholder, whichever is higher, plus interest compounded annually from the
Determination Date through the Consummation Date at the prime rate of interest
of The Bank of America N.T. & S.A. (or such other major bank headquartered in
the State of California as may be selected by the Continuing Directors) from
time to time in effect in the City of San Francisco, less the aggregate amount
of any cash dividends paid, and the Fair Market Value of any dividends paid in
other than cash, on each share of Common Stock from the Determination Date
through the Consummation Date in an amount up to but not exceeding the amount
of interest so payable per share of Common Stock; or
(b) the Fair Market Value per share of Common Stock on
the Announcement Date.
(iii) The aggregate amount of (x) the cash and (y) the Fair
Market Value, as of the Consummation Date, of the consideration other than cash
to be received per share by holders of shares of any class, other than Common
Stock, of Voting Stock (as defined in Article FOURTH) shall be at least equal
to the highest of the following (it being intended that the requirements of
this paragraph (2)(iii) shall be required to be met with respect to every such
class of Voting Stock, whether or not the Interested Shareholder has previously
acquired any shares of a particular class of Voting Stock):
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Shareholder for any shares of such class of Voting
Stock (as defined in Article FOURTH) acquired by it within the two-year period
immediately prior to the Announcement Date or in the transaction in which it
became an
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<PAGE> 77
Interested Shareholder whichever is higher, plus interest compounded annually
from the Determination Date through the Consummation Date at the prime rate of
interest of The Bank of America, N.T. & S.A. (or such other major bank
headquartered in the City of San Francisco as may be selected by the Continuing
Directors) from time to time in effect in the City of San Francisco, less the
aggregate amount of any cash dividends paid, and the Fair Market Value of any
dividends paid in other than cash, on each share of such class of Voting Stock
from the Determination Date through the Consummation Date in an amount up to
but not exceeding the amount of interest so payable per share of such class of
Voting Stock; or
(b) the Fair Market Value per share of such class of
Voting Stock (as defined in Article FOURTH) on the Announcement Date; or
(c) the highest preferential amount per share to which
the holders of shares of such class of Voting Stock (as defined in Article
FOURTH) are entitled in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation.
(iv) After such Interested Shareholder has become an
Interested Shareholder and prior to the consummation of such Business
Combination: (a) except as approved by a majority of the Continuing Directors,
there shall have been no failure to declare and pay at the regular date thereof
any full quarterly dividends (whether or not cumulative) on any outstanding
Preferred Stock; (b) there shall have been (I) no reduction in the annual rate
of dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a majority of the
Continuing Directors, and (II) an increase in such annual rate of dividends as
necessary to reflect any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has the
effect of reducing the number of outstanding shares of the Common Stock, unless
the failure so to increase such annual rate is approved by a majority of the
Continuing Directors; and (c) such Interested Shareholder shall have not become
the beneficial owner of any additional shares of Voting Stock (as defined in
Article FOURTH) except as part of the transaction which results in such
Interested Shareholder becoming an Interested Shareholder.
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<PAGE> 78
(v) After such Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder shall not have received the benefit,
directly or indirectly (except proportionately, solely in such Interested
Shareholder's capacity as a stockholder of the Corporation), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits
or other tax advantages provided by the Corporation, whether in anticipation of
or in connection with such Business Combination or otherwise.
(vi) A proxy or information statement describing the
proposed Business Combination, complying with the requirements of the
Securities Exchange Act of 1934 and the rules and regulations thereunder (or
any subsequent provisions replacing such Act, rules or regulations) and setting
forth, as an exhibit thereto, the opinion of an investment banking firm
selected by a majority of the Continuing Directors, or, if there are no
Continuing Directors, an opinion of the investment banking firm most recently
retained by the Corporation before the Interested Shareholder became an
Interested Shareholder, or any successor in interest to such investment banker,
that the proposed Business Combination is fair from a financial point of view
to the stockholders of the Corporation other than the Interested Shareholder,
shall be mailed to all stockholders of the Corporation at least 30 days prior
to the consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions).
C. For the purposes of this Article EIGHTH:
(1) A "person" shall mean any individual, firm, corporation or
other entity.
(2) "Interested Shareholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly, of more
than twenty percent (20%) of the Voting Stock (as defined in Article FOURTH);
or
(ii) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of twenty percent (20%) or more of
the Voting Stock (as defined in Article FOURTH); or
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(iii) is an assignee of or has otherwise succeeded to any
shares of Voting Stock (as defined in Article FOURTH) which were at any time
within the two-year period immediately prior to the date in question
beneficially owned by any Interested Shareholder, if such assignment or
succession shall have occurred in the course of a transaction or series of
transactions not involving a public offering within the meaning of the
Securities Act of 1933.
(3) A person shall be a "beneficial owner" of any Voting Stock (as
defined in Article FOURTH):
(i) which such person or any of its Affiliates or Associates
(as hereinafter defined) beneficially owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (b) the right to vote
pursuant to any agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly,
by any other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of Voting Stock (as
defined in Article FOURTH).
(4) For the purposes of determining whether a person is an
Interested Shareholder pursuant to paragraph (2) of this section C, the number
of shares of Voting Stock (as defined in Article FOURTH) deemed to be
outstanding shall include shares deemed owned through application of paragraph
(3) of this section C but shall not include any other shares of Voting Stock
which may be issuable pursuant to any agreement, arrangement or understanding,
or upon exercise of conversion rights, warrants or options, or otherwise.
(5) "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on May 5, 1983.
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(6) "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Interested
Shareholder set forth in paragraph (2) of this section C, the term "Subsidiary"
shall mean only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(7) "Continuing Director" means any member of the Board of
Directors of the Corporation (the "Board") who is unaffiliated with the
Interested Shareholder and was a member of the Board prior to the time that the
Interested Shareholder became an Interested Shareholder, and any successor of a
Continuing Director who is unaffiliated with the Interested Shareholder and is
recommended to succeed a Continuing Director by a majority of Continuing
Directors then on the Board.
(8) "Fair Market Value" means: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding the
date in question of a share of such stock on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing bid quotation
with respect to a share of such stock during the 30-day period preceding the
date in question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or if no such quotations
are available, the fair market value on the date in question of a share of such
stock as determined by the Board in good faith; and (ii) in the case of
property other than cash or stock, the fair market value of such property on
the date in question as determined by the Board in good faith.
(9) In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be received"
as used in paragraphs (2)(ii) and 2(iii) of section B of this Article EIGHTH
shall include the shares of Common Stock and/or the shares of any other class
of Voting Stock (as defined in Article FOURTH) retained by the holders of such
shares.
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D. A majority of the total number of authorized directors (whether or
not there exist any vacancies in previously authorized directorships at the
time any such determination as is hereinafter in this Section D specified is to
be made by the Board) shall have the power and duty to determine, on the basis
of information known to them after reasonable inquiry, all facts necessary to
determine compliance with this Article EIGHTH, including, without limitation,
(1) whether a person is an Interested Shareholder, (2) the number of shares of
Voting Stock (as defined in Article FOURTH) beneficially owned by any person,
(3) whether a person is an Affiliate or Associate of another, (4) whether the
applicable conditions set forth in paragraph (2) of section B have been met
with respect to any Business Combination, (5) whether the assets which are the
subject of any Business Combination referred to in paragraph (1)(ii) of section
A have an aggregate Fair Market Value of 10% of the assets of the Corporation
and its consolidated subsidiaries as reflected in the most recent balance sheet
of the Corporation, and (6) whether the consideration to be received for the
issuance or transfer of securities by the Corporation or any Subsidiary in any
Business Combination referred to in paragraph (1)(iii) of section A has an
aggregate Fair Market Value of $15,000,000 or more.
E. Nothing contained in this Article EIGHTH shall be construed to
relieve any Interested Shareholder from any fiduciary obligation imposed by
law.
NINTH: A director of this corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director s duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
If the Delaware General Corporation Law is hereafter amended to
authorize the further elimination or limitation of the liability of a director,
then the liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware General Corporation
Law, as so amended.
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Any repeal or modification of the foregoing provisions of this Article
NINTH by the stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at the time of
such repeal or modification.
TENTH: The Board of Directors of the Corporation (the "Board"), when
evaluating any offer of another party, (a) to make a tender or exchange offer
for any Voting Stock (as defined in Article FOURTH) or (b) to effect a Business
Combination (as defined in Article EIGHTH), shall, in connection with the
exercise of its judgment in determining what is in the best interests of the
Corporation as a whole, be authorized to give due consideration to such factors
as the Board determines to be relevant, including, without limitation:
(i) the interests of the Corporation's stockholders;
(ii) whether the proposed transaction might violate
federal or state laws;
(iii) not only the consideration being offered in the
proposed transaction, in relation to the then current market price for the
outstanding capital stock of the Corporation, but also to the market price for
the capital stock of the corporation over a period of years, the estimated
price that might be achieved in a negotiated sale of the Corporation as a whole
or in part of through orderly liquidation, the premiums over market price for
the securities of other corporations in similar transactions, current
political, economic and other factors bearing on securities prices and the
Corporation s financial condition and future prospects; and
(iv) the social, legal and economic effects upon
employees, suppliers, customers and others having similar relationships with
the Corporation, and the communities in which the Corporation conducts its
business.
In connection with any such evaluation, the Board is authorized to
conduct such investigations and to engage in such legal proceedings as the
Board may determine.
ELEVENTH: The Corporation reserves the right to amend or repeal any
provision contained in this Restated Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred upon
stockholders are granted subject to this reservation; provided, however, that,
notwithstanding any other provision of this Restated Certificate of
Incorporation or
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any provision of law which might otherwise permit a lesser vote or no vote, but
in addition to any vote of the holders of any class or series of the stock of
this Corporation required by law or by this Restated Certificate of
Incorporation,
(1) the affirmative vote of the holders of at least 66-2/3% of the
Voting Stock (as defined in Article FOURTH), voting together as a single class,
shall be required to amend or repeal this Article ELEVENTH, sections C or D of
Article FIFTH, Article SIXTH, Article SEVENTH, Article EIGHTH or Article NINTH;
and,
(2) in addition to the vote specified in paragraph (1) of this
Article ELEVENTH, the affirmative vote of the holders of at least a majority of
the voting power of all of the then-outstanding shares of the capital stock of
the Corporation entitled to vote generally in the election of directors, other
than such capital stock of which an Interested Shareholder is the beneficial
owner, voting together as a single class, shall be required in order to amend
or repeal Article EIGHTH or Article TENTH; and
(3) in addition to the votes specified in paragraphs (1) and (2)
of this Article ELEVENTH, the affirmative vote of the holders of a majority of
the Class A Common Stock at the time outstanding shall be required in order to
amend, terminate or repeal any rights of the Class A Common Stock set forth in
this Restated Certificate of Incorporation or to amend this Restated
Certificate of Incorporation to impose any restriction, condition or burden
upon the exercise of any such rights.
IN WITNESS WHEREOF, the corporation has caused this Restated
Certificate of Incorporation to be signed by its President and Chief Executive
Officer and attested to by its Secretary this ____ day of September, 1993.
_________________________________________
Laurence R. Hootnick,
President and Chief Executive Officer
Attest:
- ------------------------------
Mark Chandler, Secretary
62 Page 83 of 194
<PAGE> 84
Exhibit 2
U.S. $74,998,000 LOAN FACILITY AGREEMENT
dated as of January 28, 1994
HYUNDAI ELECTRONICS INDUSTRIES CO.
HYUNDAI MERCHANT MARINE CO., LTD.
as Borrowers
THE NIPPON CREDIT BANK LIMITED, LOS ANGELES AGENCY
as Lender
SHIN & KIM
SEOUL, KOREA
1 Page 84 of 194
<PAGE> 85
TABLE OF CONTENTS
LOAN FACILITY AGREEMENT..................................................... 3
1. Definitions................................................... 3
2. Availability.................................................. 4
3. Interest; Fees................................................ 5
4. Repayment and Prepayment...................................... 6
5. Taxes......................................................... 7
6. Changes in Circumstance....................................... 8
7. Security...................................................... 8
8. Representations and Warranties................................ 9
9. Covenants..................................................... 11
10. Event of Default.............................................. 12
11. Default Interest and Indemnity................................ 13
12. Calculations and Evidence of Debt............................. 15
13. Payments...................................................... 15
14. Set-Off....................................................... 16
15. Notices....................................................... 16
16. Benefit of Agreement.......................................... 18
17. Costs and Expenses............................................ 18
18. Law........................................................... 18
19. Jurisdiction; Waivers......................................... 19
20. Miscellaneous................................................. 20
APPENDIX A.................................................................. 21
APPENDIX B.................................................................. 22
APPENDIX C.................................................................. 23
APPENDIX D.................................................................. 30
2 Page 85 of 194
<PAGE> 86
LOAN FACILITY AGREEMENT
THIS LOAN FACILITY AGREEMENT is entered into as of January 28, 1994
by and among (i) HYUNDAI ELECTRONICS INDUSTRIES CO. ("Borrower A"), a
corporation organized and existing under the laws of the Republic of Korea
("Korea"), with its registered head office at 11th Fl. Hyundai Jeonja Bldg., 66
Jeokseon-dong, Chongro-ku, Seoul, Korea, (ii) HYUNDAI MERCHANT MARINE CO.,
LTD., a corporation organized and existing under the laws of Korea, with its
registered head office at 7th Fl. Mugyo Hyundai Bldg., 96 Mugyo-dong, Chung-gu,
Seoul, Korea ("Borrower B"; collectively with Borrower A, the "Borrowers";
individually, a "Borrower"), and (iii) THE NIPPON CREDIT BANK LIMITED, LOS
ANGELES AGENCY (in its capacity as the lender, the "Lender", which expression
shall include its successors and assigns), a bank licensed to engage in banking
business under the laws of the State of California, U.S.A., having its office
at 550 South Hope Street, Suite 2500, Los Angeles, California 90071, U.S.A.
1. Definitions
In addition to those terms defined above, as used herein, the following
terms shall have the meanings set forth below:
"Advance A" shall mean an advance to Borrower A by the Lender of the
amount of the drawdown requested by Borrower A pursuant to Clause 2.
"Advance B" shall mean an advance to Borrower B by the Lender of the
amount of the drawdown requested by Borrower B pursuant to Clause 2.
"Advances" shall mean, collectively, Advance A and Advance B;
individually, an "Advance."
"Availability Period" shall mean, with respect to each Advance, the
period commencing on the date hereof and terminating on the earliest of (i) one
(1) month from the date hereof, (ii) the Drawdown Date, and (iii) the date on
which the obligation of the Lender to make the Advances hereunder terminates in
accordance with the terms of this Agreement.
"Agreements" shall mean this Loan Facility Agreement, as amended,
supplemented or otherwise modified from time to time.
"Banking Day" shall mean a day other than a Saturday on which
commercial banks are open for business in London, New York City and Seoul.
"Default" shall mean any of the events specified in Clause 10, whether
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Drawdown Date" shall mean the day specified in the Notice of Advance
as the date on which both of the Borrowers will make the borrowings hereunder,
which must be a Banking Day during the Availability Period.
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<PAGE> 87
"Event of Default" shall mean any of the events specified in Clause
10, provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition has been satisfied.
"Guarantor" shall mean HYUNDAI HEAVY INDUSTRIES CO., LTD., a
corporation organized and existing under the laws of Korea, with its head
office located at 140-2, Kye-dong, Chongro-ku, Seoul, Korea.
"Guaranty" shall mean the guaranty given by the Guarantor guaranteeing
the payment of the sums due and payable by the Borrowers hereunder
substantially in the form set forth in Appendix C hereto and in any event in
form and substance satisfactory to the Lender and its counsel.
"Notes" and "Note" shall have the meaning designated to such term
under Clause 12(B).
"Notice of Advance" shall mean a request for Advances in the form of
Appendix A hereto.
"Person" shall mean any person, firm, company, corporation,
government, state or agency of a state or any association or partnership
(whether or not having a separate legal personality) of two or more of the
foregoing.
"Principal Subsidiary" shall mean, with respect to each Borrower, any
Subsidiary (i) whose net sales, as shown by the latest audited financial
statements of such Subsidiary, are at least 10 percent of the combined net
sales of such Borrower, as shown by its latest audited financial statements,
and such Subsidiary or (ii) whose gross assets, as shown by the latest audited
financial statements of such Subsidiary, are at least 10 percent of the
combined gross assets of such Borrower, as shown by its latest audited
financial statements, and such Subsidiary.
"Reference Banks" shall mean, collectively, Barclays Bank PLC, Bank of
Tokyo and National Westminister Bank U.S.A.
"Repayment Date" shall mean, with respect to each Advance, the
Interest Payment Date which is three (3) years from the Drawdown Date, as such
date may be extended pursuant to Clause 4(A) hereof.
"Subsidiary" shall mean, with respect to each Borrower, any
corporation or other business entity of which such Borrower owns or controls
(either directly or indirectly) 50 percent or more of the issued share capital
or other ownership interest having ordinary voting power to elect directors,
managers or trustees of such corporation or other business entity.
2. Availability
(A) On the terms and subject to the conditions hereof, the Lender agrees
to make available (i) a term loan facility to Borrower A in the
aggregate principal amount of $44,998,800 and (ii) a term loan
facility to Borrower B in the aggregate principal amount of
$29,999,200 (such term loan facilities, collectively, the "Facility"),
to provide each Borrower with the funds to make overseas investments.
The Lender will make Advance A to Borrower A and Advance B to Borrower
B on the Drawdown Date in a single draw down, but in any event not
exceeding Seventy Four Million Nine Hundred
4 Page 87 of 194
<PAGE> 88
Ninety Eight Thousand Dollars ($74,998,000) in aggregate, if (i) not
less than three (3) Banking Days before the Drawdown Date (or such
lesser number of days before the Drawdown Date as may be agreed to by
the Lender), the Lender has received from the Borrowers a notice of
Advance (receipt of which shall oblige each Borrower to borrow the
relevant Advance on the Drawdown Date upon the terms and subject to
the conditions contained herein), (ii) no Default or Event of Default
has occurred on or prior to the Drawdown Date and (iii) the
representations set out in Clause 8 are true with respect to each
Borrower on the Drawdown Date.
(B) Neither Borrower may make a request under sub-clause (A)(i) unless and
until the Lender has received (in form and substance satisfactory to
the Lender and its counsel) each of the documents listed in Appendix B
(each of which shall be in the English language or accompanied by a
certified translation into the English language).
3. Interest Fees
(A) "Interest Period" shall mean, with respect to each Advance, the period
commencing on the Drawdown Date and ending on the date six (6) months
after the date thereof, and each six (6) month period thereafter
commencing on the last day of the then current Interest Period;
provided, that (i) if any Interest Period would otherwise end on a day
which is not a Banking Day, that Interest Period shall be extended to
the next succeeding Banking Day unless the result of such extension
would be to carry such Interest Period over into another calendar
month, in which event such Interest Period shall end on the first
preceding Banking Day; (ii) if any Interest Period commencing on the
last Banking Day in a calendar month would otherwise end on the
corresponding Banking Day in a succeeding calendar month that is not
the last Banking Day in such month (or there is no corresponding
Banking Day in such month), such Interest Period shall end on the last
Banking Day in such succeeding calendar month and (iii) any Interest
Period that would otherwise extend beyond the relevant Repayment Date
shall end on such Repayment Date or such date of final payment, as the
case may be.
(B) On the last day of each Interest Period (each an "Interest Payment
Date"), each of the Borrowers shall pay accrued interest on the
relevant Advance calculated, subject to sub-clause (C), at the rate
per annum which is the sum of (i) ninety five-hundredths of
one-percent (0.95%) and (ii) either (a) the rate per annum determined
by the Lender to be the rate equal to the rate quoted on the Telerate
Page 3750 for a period equal or approximately equal to such Interest
Period at or about 11.00 a.m., London time, on the relevant day which
is the day two Banking Days on which dealings in deposits are carried
on in the London interbank market before the first day of such
Interest Period or (b) if no rate appears on such page, the rate per
annum determined by the Lender to be equal to the arithmetic mean
(rounded upwards, if necessary, to the nearest 1/16 of 1%) of the rate
per annum quoted by each Reference Bank at which such Reference Bank
is offering to prime banks in the London interbank market deposits in
Dollars in an amount comparable to the amount of such Advance for such
Interest Period at or about 11.00 a.m., London time, on the relevant
day which is the day two Banking Days on which dealings in
5 Page 88 of 194
<PAGE> 89
deposits are carried on in the London interbank market before the
first day of such Interest Period. If one or more of the Reference
Banks does or do not timely furnish such information for determination
of the rate specified in clause (6) above, the Lender shall determine
such rate on the basis of such information supplied to it by other
Reference Bank(s).
(C) If deposits in Dollars are not offered to prime banks in the London
interbank market by any of the Reference Banks at the relevant time
with respect to any Interest Period or if the rate specified in
sub-clause (B)(ii)(a) or sub-clause (B)(ii)(b), as the case may be, is
not otherwise available or does not accurately reflect the Lender's
cost of funding the principal amount of the Advances during such
Interest Period, the Lender shall promptly give notice of such fact to
the Borrowers, and the Lender and the Borrowers shall immediately
negotiate in good faith to find an alternative basis which is mutually
acceptable for funding the Advances and for determining the interest
rates from time to time applicable thereto. If, within twenty-five
(25) days of such notice, the Borrowers and the Lender agree on such a
substitute basis, it shall be retroactive to and take effect from the
beginning of the then current Interest Period. If the Lender and the
Borrowers fail to agree on such a substitute basis within such
twenty-five (25) day period, then each of the Borrowers shall prepay
the relevant Advance on the date thirty (30) days after the date of
such notice together with accrued interest thereon at the rate which
is the aggregate of (i) ninety five-hundredths of one percent (0.95%)
and (ii) the interest rate notified by the Lender to the Borrowers as
representing the cost to the Lender of funding (in Dollars or
otherwise) the Advances during such period.
(D) Each of the Borrowers shall pay to the Lender an up-front fee equal to
one percent (1.0%) of the amount of the portion of the Facility equal
to the Advance to be made to it within thirty days from the Drawdown
Date.
4. Repayment and Prepayment
(A) Each of the Borrowers shall repay the full amount of the relevant
Advance to the Lender on the Repayment Date, provided the initial
Repayment Date may be extended for two (2) consecutive one (1) year
period at the option of the Borrowers and the Facility shall continue
to be extended to the Borrowers for such period(s) on the terms and
conditions stated in this Agreement (including, without limitation,
the interest rate which is stated to accrue on the principal of the
Advances under Clause 2(B) herein) without the payment of any
additional fee to the Lender if at the time of each such extension (i)
there shall not have occurred any Default or Event of Default, (ii)
each of the representations and warranties made by each Borrower under
Clause 8 shall be true and correct on and as of such date as if made
on and as of such date and (iii) the Borrowers shall have given at
least ninety (90) days prior written notice to the Lender of their
intention to extend the then effective Repayment Date.
(B) Either of the Borrowers may, at its option and without penalty, prepay
all or part of the relevant Advance, together with accrued interest
thereon to the date of prepayment, on the
6 Page 89 of 194
<PAGE> 90
last day of any Interest Period (other than an Interest Period
determined pursuant to Clause 11(A)), upon giving the Lender at least
thirty (30) Banking Days prior written notice of such prepayment,
which notice shall be irrevocable unless otherwise agreed by the
Lender; provided that the amount of such prepayment shall be at least
$5,000,000 and in an integral multiple of $5,000,000. Amounts repaid
hereunder may not be reborrowed.
5. Taxes
(A) If any of the Borrowers is required by law to make any deduction or
withholding on account of tax from any sum payable by it hereunder or
under the Notes, then the sum payable by such Borrower in respect of
which the deduction or withholding is required to be made shall be
increased to the extent necessary to ensure that, after the making of
the deduction or withholding, the Lender receives and retains (free
from any liability in respect of any such deduction or withholding) a
net sum equal to the sum which it would have received and so retained
if no deduction or withholding had been made or required to be made.
In this Agreement, "tax" shall be construed to include any tax, levy,
impost, duty, excise or other charge of a similar nature (including
without limitation any penalty payable in connection with any failure
to pay or any delay in paying any of the same).
(B) Without prejudice to the provisions of sub-clause (A), if the Lender
is required by Korean law to make any payment on account of Korean tax
(other than tax on overall net income of the Lender imposed by its
jurisdiction of incorporation or of that of its lending branch imposed
by the jurisdiction in which it is located) on or in relation to any
sums received by the Lender from either Borrower or any liability in
respect of any such payment is asserted, imposed, levied or assessed
against the Lender, the relevant Borrower shall upon demand and
whether or not the payment or liability is correctly required,
asserted, imposed or levied, indemnify the Lender against such payment
or liability, together with any interest, penalties and expenses
payable or incurred in connection therewith.
(C) If at any time any of the Borrowers is required by law to make any
deduction or withholding on account of tax from any sum payable by
such Borrower hereunder or under the Notes (or if thereafter there is
any change in the rates at which or the manner in which such
deductions or withholdings are calculated), such Borrower shall
promptly notify the Lender, shall pay the full amount to be deducted
or withheld to the relevant tax authority within the time allowed for
such payment under applicable law and shall deliver to the Lender
within thirty (30) days after it has made such payment to the
applicable authority a receipt issued by that authority evidencing the
deduction or withholding of all amounts required to be so deducted or
withheld from such payment.
(D) If any of the Borrowers is required to reimburse the Lender or make
any payment under sub-Clause (A) through (C) above in respect of any
taxes imposed by law or regulation which comes into effect after the
date of this Agreement, such Borrower shall be free at any time within
thirty (30) Banking Days of the effectiveness of the requirement of
such reimbursement or payment to make a prepayment of the relevant
Advance, such
7 Page 90 of 194
<PAGE> 91
prepayment to be made together with accrued interest thereon to the
date of prepayment, subject to giving the Lender no less than five (5)
Banking Days notice thereof.
6. Changes in Circumstance
(A) If compliance by the Lender with any law, regulation or condition
(each a "compliance requirement") with respect to this Agreement or
the Advances or relating in any way to the Lender's obligation to lend
hereunder or the funding or renewing of the Advances by the Lender,
including without limitation any reserve, special deposit, capital
adequacy or similar requirement and any restraint, guideline or policy
not having the force of law with which the Lender may comply, or any
changes in the basis of taxation of payments hereunder or under the
Notes (other than changes in the rate of tax imposed on the overall
net income of the Lender) shall increase the cost to the Lender of
maintaining its obligation to lend hereunder or making or maintaining
the Advances or reduce any amount receivable by the Lender hereunder
or under the Notes or reduce the Lender's return on capital as a
consequence of its obligations hereunder, then the Lender shall
furnish any of the Borrowers with a statement containing a reasonable
description in detail of the nature and amount of such increase in
cost or reduction and the Borrower shall pay to the Lender on demand
such additional amount or amounts as will compensate the Lender for
such increase in cost or reduction. If any of the Borrowers shall be
required to reimburse the Lender in respect of any compliance
requirement or change in the basis of taxation which comes into effect
after the date of this Agreement, such Borrower shall be free on any
Banking Day which falls within thirty (30) days of the effectiveness
of such reimbursement requirement to prepay the relevant Advance, such
prepayment to be made together with accrued interest thereon to the
date of prepayment, subject to giving the Lender not less than five
(5) Banking Days notice thereof.
(B) If it shall become unlawful, or any government agency or authority
shall assert it is unlawful, (i) for the Lender to make or maintain
any of the Advances or (ii) for any of the Borrowers to perform any or
all of its obligations hereunder or under the Notes, then the
obligation of the Lender to make or maintain the Advances shall
forthwith be canceled and, if any of the Advances is outstanding, each
of the Borrowers shall prepay the relevant Advance to the Lender on
such day as the Lender may specify, such prepayment to be made
together with accrued interest thereon to the date of prepayment.
7. Security
(A) The Borrowers shall, prior to the Drawdown Date, deliver to the Lender
the Guaranty duly executed by the Representative Director of the
Guarantor.
(B) Each Borrower shall, prior to the Drawdown Date, deliver to the Lender
its Note pursuant to the terms of Clause 12(B) hereto, duly executed
by the Representative Director of such Borrower.
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<PAGE> 92
8. Representations and Warranties
Each of the Borrowers hereby represents and warrants that:
(i) such Borrower is duly incorporated and validly
existing under the laws of Korea and has the
corporate power and authority, and the legal right,
to own and operate its property, to lease the
property it operates as lessee and conduct the
business in which it is currently engaged;
(ii) its execution and delivery of, and exercise of rights
and performance of obligations under, this Agreement,
the Notes and each other instrument delivered in
connection herewith and the payment on the dates and
in the currency provided for herein (a) are within
such Borrower's corporate power, (b) have been duly
authorized by all necessary corporate and other
actions of such Borrower and (c) do not contravene
its Articles of Incorporation, its internal
regulations, any law or any contractual restriction
binding on such Borrower;
(iii) each of this Agreement and the Advance A Note or
Advance B Note, as the case may be, constitutes
legal, valid and binding obligations of such
Borrower, enforceable in accordance with the terms
hereof and the direct, unconditional and general
obligations of such Borrower, ranking at leastpari
passu in priority of payment, security and all other
respects with all other unsecured and unsubordinated
indebtedness of such Borrower (except as has been
disclosed to the Lender in writing prior to the date
hereof and as permitted by Clause 9(iii) below); in
this Agreement, "indebtedness" shall be construed to
include any obligation (whether incurred as principal
or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
(iv) all governmental authorizations, approvals, licenses,
consents, declarations or registrations necessary for
the execution and delivery of this Agreement and each
document delivered in connection herewith have been
obtained, and all governmental authorizations,
approvals, licenses, consents, declarations or
registrations necessary for the performance and
enforceability hereof (including without limitation
the approval to act as a borrower issued by the
designated class A foreign exchange bank of such
Borrower) shall have been obtained prior to the date
on which the Borrowers request the drawdown
hereunder; provided, that confirmation by the
designated class A foreign exchange bank in Korea of
the relevant Borrower will be required prior to any
payment in Dollars by such Borrower, which
confirmation will be granted in due course under the
authority of the approval of the borrowing by such
foreign exchange bank;
(v) there are no proceedings before any arbitration
tribunal, court, government agency or administrative
body pending or threatened against such Borrower
which, if adversely determined, might have a material
adverse effect on the financial condition of such
Borrower or any of its Principal Subsidiaries or
impair the
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<PAGE> 93
ability of such Borrower to pay, when due, all or any
portion of the amounts payable by it hereunder or
under the Note which has been issued by it;
(vi) neither such Borrower nor any of its Principal
Subsidiaries is in default under any agreement or
obligation to which it is a party or by which it may
be bound and no event of default and no event that,
with the giving of notice or the passing of time, or
both, would constitute an event of default
thereunder, has occurred and is continuing;
(vii) there is no stamp, registration or other similar tax
or charge of Korea or of any political subdivision or
authority thereof applicable to any payment pursuant
to this Agreement or the Note which has been issued
by it or any other document delivered in connection
herewith or therewith or any of the transactions
contemplated hereby or thereby, except stamp taxes of
up to an amount of 350,000 Korean Won which are
imposed on each original of this Agreement executed
in Korea;
(viii) the most recent audited financial statements of such
Borrower delivered to the Lender are complete and
correct and accurately present the financial
condition and results of operations of such Borrower
as of the dates stated therein and for the periods
then ended in accordance with generally accepted
accounting principles in Korea, consistently applied
and since the date of such financial statements there
has been no material adverse change in the financial
condition of such Borrower or such Borrower and its
Principal Subsidiaries taken as a whole;
(ix) such Borrower and each Principal Subsidiary are in
full compliance with all applicable laws,
regulations, directives and guidelines of
governmental authorities, whether or not having the
force of law, including without limitation tax
legislation thereof; and
(x) this Agreement, the Note issued by it and the
obligations of such Borrower hereunder and thereunder
are of commercial rather than public or governmental
nature and such Borrower is not entitled to claim
immunity from legal proceedings with respect to
itself or any of its proceedings or assets on any
grounds of sovereignty or otherwise under any law or
in any jurisdiction where an action may be brought
for the enforcement of any of the obligations arising
under or relating to this Agreement, such Note or any
related documentation. To the extent that such
Borrower or any of its properties or assets has or
hereafter may acquire any right to immunity from
set-off, legal proceedings, attachment prior to
judgment, other attachment or execution of judgment
on any grounds of sovereignty or otherwise, such
Borrower hereby irrevocably waives such right to
immunity for itself and its properties and assets in
respect to its obligation arising under or relating
to this Agreement or any related documentation.
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<PAGE> 94
9. Covenants
Each of the Borrowers hereby agrees that during the term of this
Agreement such Borrower shall act as follows and perform the following
obligations:
(i) the Borrower shall maintain an accounting system in
accordance with generally accepted accounting
principles in Korea consistently applied, and shall
furnish to the Lender (a) as soon as possible but no
later than one hundred and fifty (150) days after the
end of each of its financial years, financial
statements (including, at least, a balance sheet and
a statement of income with related notes specifying
significant accounting policies and their impact on
such financial statements and all related schedules)
in the English language as at the end of and for the
relevant accounting period, audited and certified by
independent or chartered accountants acceptable to
the Lender and (b) as soon as possible but no later
than ninety (90) days after the end of each fiscal
half-year in each financial year, comparable
unaudited financial statements in the English
language.
(ii) the Borrower shall promptly give notice to the Lender
of the occurrence of any Default or an Event of
Default or the occurrence of any event of default or
breach or other event that, with the giving of notice
or the passing of time, or both, would constitute an
event of default or breach under any other agreement
to which the Borrower is a party or by which it or
any of its properties or assets is bound;
(iii) the Borrower shall not voluntarily create, assume,
incur or suffer to exist, or permit to be created,
assumed, incurred or suffered to exist, any mortgage,
charge, pledge, lien or other encumbrance securing
any obligation of any Person or other preferential
arrangement of any kind (whether or not constituting
a security interest) upon or with respect to any of
its properties or assets, whether now owned or
hereinafter acquired, or upon or with respect to any
right to receive income, now or hereafter existing,
in connection with any of its indebtedness; provided,
that the Borrower shall be permitted to create or
suffer to exist security interests (a) required by
Korean law or regulations or arising in the ordinary
course of the Borrower's business; (b) on properties
or assets acquired after the date hereof, which
security interests were in existence prior to such
acquisition or were created at the time of purchase
solely to secure the purchase price of such
properties or assets, provided the amount secured
thereby at the date of such acquisition is not
thereafter exceeded; or (c) granted in substitution
for any security interest permitted hereby and over
the same asset but only if the maximum amount secured
does not exceed the amount secured thereon
immediately prior to the substitution.
(iv) the Borrower shall not liquidate or dissolve or
merge, reorganize or consolidate with any other
corporation and shall not purchase or otherwise
acquire all or substantially all of the properties
and assets of any other corporation, partnership or
sole proprietorship or sell, lease, transfer to
otherwise dispose of all or any
11 Page 94 of 194
<PAGE> 95
significant portion of its properties or assets
without the written consent of the Lender in each
case;
(v) the Borrower shall promptly give notice to the Lender
of any litigation and of any proceedings by or before
any governmental agency and of all disputes
concerning the Borrower or any of its Principal
Subsidiaries or any of their assets, any of which may
have a material adverse effect on the operations or
financial condition of the Borrower;
(vi) upon request of the Lender, the Borrower shall give
any representative of the Lender access during normal
business hours to examine or make extracts from such
of its books, records and documents as may be
pertinent to the ability of the Borrower to perform
its obligations hereunder; and
(vii) the Borrower shall file for and obtain all
authorizations as may be required or advisable in
respect of the performance by the Borrower of its
obligations under the Agreement.
10. Event of Default
If:
(i) either Borrower fails to pay the principal of the
relevant Advance within two (2) days after such
amount becomes due in accordance with the terms
hereof or under the Note issued by it; or either
Borrower fails to pay any interest on the relevant
Advance or any other amount payable hereunder, within
seven (7) days after any such interest or other
amount becomes due in accordance with the terms of
this Agreement or such Note; or
(ii) any representation or warranty of any of the
Borrowers contained herein or of the Guarantor in the
Guaranty or in any document executed by any of the
Borrowers or the Guarantor in connection herewith or
therewith, as the case may be, proves to have been
untrue when made or renewed; or
(iii) any of the Borrowers or the Guarantor fails to
perform or violates any other provision of this
Agreement (other than as expressly described in this
Clause), the relevant Note or any provision of the
Guaranty, as the case may be, and such failure or
violation is not remediable in the opinion of the
Lender, or if deemed by the Lender to be capable of
remedy, continues unremedied for a period of twenty
(20) days after notice from the Lender to the
relevant Borrower or the Guarantor with respect
thereto, as the case may be; or
(iv) any of the Borrowers or the Guarantor fails to pay
when due any indebtedness for which it is liable
(contingently or otherwise) in an aggregate amount of
$5,000,000 or more (or the equivalent thereof in any
currency) or violates or fails to perform any
provision of any agreement evidencing such
indebtedness
12 Page 95 of 194
<PAGE> 96
(contingent or otherwise) of such Borrower or the
Guarantor, as the case may be, which violation or
failure entitles any other party to the agreement
evidencing such indebtedness to accelerate such
indebtedness or require payment prior to the stated
maturity thereof; or
(v) any governmental approval required for the execution,
delivery, performance or enforceability of any of the
Borrowers' or the Guarantor s obligations hereunder
or under the Notes or the Guaranty or any document
delivered in connection herewith or therewith expires
or is terminated or revoked or modified in any
material respect; or
(vi) (a) any of the Borrowers or the Guarantor becomes
insolvent or unable to pay its debts when due, or (b)
any of the Borrowers or the Guarantor commits any act
of bankruptcy, including presenting any petition in
any bankruptcy, winding-up or reorganization
proceeding, or (c) any of the Borrowers or the
Guarantor acknowledges in writing its insolvency or
inability to pay its debts, or (d) any petition
relating to bankruptcy is filed with respect to any
of the Borrowers or the Guarantor by its creditors;
or
(vii) any circumstances occur which in the opinion of the
Lender give reasonable grounds for belief that any of
the Borrowers or the Guarantor may not (or may not be
able to) perform any or all or its obligations under
this Agreement, the Notes or the Guaranty,
then and in any such case and at any time thereafter the
Lender may by a written notice to any of the Borrowers:
(a) if any of the Advances has already
been made, declare the Advances to
be immediately due and payable
(whereupon the Advances shall become
so payable in full together with
accrued interest thereon and any
other sums then owed by the
Borrowers hereunder); or
(b) if the Advances have not yet been
made, declare that the Facility
shall be canceled, whereupon the
Facility shall be canceled
forthwith.
11. Default Interest and Indemnity
(A) If any sum due and payable hereunder or under the Notes by a Borrower
is not paid on the due date, the period beginning on such due date and
ending on the date upon which such Borrower's obligation to pay such
sum (the outstanding balance thereof being referred to as an "unpaid
sum") is discharged in full shall be divided into successive periods,
each of which (other than the first) shall start on the last day of
the preceding such period and the duration of each of which shall be
selected by the Lender. During each such period relating thereto (as
well after as before judgment) an unpaid sum shall bear interest at
the rate per annum which is the sum of one and ninety five-hundredths
of one percent (1.95%) and either (i) the rate per annum determined by
the Lender to be the
13 Page 96 of 194
<PAGE> 97
arithmetic mean (rounded upwards, if necessary, to the nearest 1/16 of
1%) of the rate per annum quoted by each Reference Bank at which such
Reference Bank is offering to prime banks in the London interbank
market deposits in Dollars in an amount comparable to the amount of
that unpaid sum for the period for which such rate is to be determined
at or about 11.00 a.m. London time on the day which is two London
Banking Days before (or, if such period is an overnight period, on)
the first day of such period (if one or more of the Reference Banks
does or do not timely furnish such information for the determination
of the rate specified in this clause (i), the Lender shall determine
such rate on the basis of such information supplied to it by other
Reference Bank(s)) or (ii) if none of the Reference Banks is offering
such deposits on such date, the rate determined by the Lender to be
that rate which reflects the cost to the Lender of funding that unpaid
sum for such period from such sources as it may in its absolute
discretion select. Any interest accrued under this sub-clause shall
be paid by the relevant Borrower on demand of the Lender and at the
end of the period by reference to which it is calculated.
(B) If the Lender receives or recovers all or any part of any Advances
other than on an Interest Payment Date, the relevant Borrower shall
pay to the Lender an amount equal to the amount (if any) by which (i)
the additional interest which would have been payable on the amount so
received or recovered had it been received or recovered on such
Interest Payment Date exceeds (ii) the amount of interest which in the
opinion of the Lender would have been payable to the Lender on such
Interest Payment Date in respect of a deposit in Dollars equal to the
amount so received or recovered placed by it with a prime bank in
London for a period starting on the date of such receipt or recovery
and ending on such Interest Payment Date. For the purposes of this
sub-clause and Clause 6(A), "Advance" includes any unpaid sum and
"Interest Period" includes, in relation to an unpaid sum, a period
relating thereto determined pursuant to subclause (A).
(C) Each of the Borrowers undertakes to indemnify the Lender, against (i)
any loss or expense, including legal fees, which it may sustain or
incur as a consequence of any default by such Borrower in the
performance of any of the obligations expressed to be assumed by it
herein, (ii) any loss it may suffer as a result of its funding the
relevant Advance where, by reason of the operation of any one or more
of the provisions of Clause 2, such Advance is not made and (iii) a
default by such Borrower in making any prepayment after such Borrower
has given notice requesting the same in accordance with the provisions
of this Agreement.
(D) If any sum due from any of the Borrowers hereunder or under the Notes
or under any order or judgment given or made in relation hereto has to
be converted from the currency ("the first currency") in which the
same is payable hereunder or under such order or judgment into another
currency ("the second currency") for the purpose of (i) making or
filing a claim or proof against any of the Borrowers, (ii) obtaining
an order or judgment in any court or other tribunal or (iii) enforcing
any order or judgment given or made in relation hereto, the relevant
Borrower shall indemnify the Lender against any loss suffered as a
result of any discrepancy between (a) the rate of exchange used for
such purpose to convert the sum in question from the first currency
into the second currency
14 Page 97 of 194
<PAGE> 98
and (b) the rate or rates of exchange at which the Lender may 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.
12. Calculations and Evidence of Debt
(A) Interest shall accrue from day to day and be calculated on the basis
of a year of 360 days and the actual number of days elapsed. Each
determination of an interest rate by the Lender pursuant to any
provision of this Agreement shall be conclusive and binding on the
Borrowers in the absence of manifest error.
(B) Advance A made by the Lender shall be evidenced by a promissory note
of Borrower A, substantially in the form of Appendix D ("Advance A
Note") and Advance B made by the Lender shall be evidenced by a
promissory note of Borrower B, substantially in the form of Appendix D
("Advance B Note"; together with Advance A Note, collectively, the
"Notes"; individually, a "Note"). Appropriate insertions as to payee,
date and principal amount shall be made to each Note, and each Note
shall be made payable to the order of the Lender and in a principal
amount equal to the relevant Advance. The Lender is hereby authorized
to record the date and amount of each payment or prepayment of
principal of the relevant Advance on the Schedule annexed to and
constituting a part of a Note, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so
recorded.
(C) A certificate of the Lender as to (i) the amount by which a sum
payable hereunder is to be increased under Clause 5(A) or (ii) the
amount for the time being required to indemnify it against any such
loss, cost or liability as is mentioned in Clauses 5(B), 6 or 11
shall, in the absence of manifest error, be prima facie evidence in
any legal proceedings arising out of or in connection with this
Agreement.
13. Payments
(A) All payments to be made hereunder or the Notes by the Lender to the
Borrowers in respect of the Advances shall be made in Dollars and in
same day funds (or in such other funds as the Lender may determine are
for the time being customary for the settlement in New York of
international banking transactions in Dollars) by transfer on the date
of the Advances to the account specified by the Borrowers in the
Notice of Advance, or to such other account in New York as the
Borrowers may direct by notice to the Lender for such purpose.
(B) On each date on which an amount is due from the Borrowers hereunder or
the Notes, each of the Borrowers shall make the same available to the
Lender by payment in Dollars and in same day funds (or in such other
funds as the Lender may determine are for the time being customary for
the settlement in New York of international banking transactions in
Dollars) to the Lender's payment account (which currently is account
number 62908-31126 (ABA# 1210-0035-8)) with Bank of America, San
Francisco or such other account as the Lender may specify for this
purpose.
15 Page 98 of 194
<PAGE> 99
(C) All payments by any of the Borrowers hereunder or the Notes
shall be made free and clear of and without deduction for or on
account of (i) any set-off or counterclaim or (ii) except to the
extent, if any, required by any law and subject to Clause 5, tax
or other matter.
(D) Any payments made by any of the Borrowers to the Lender hereunder or
under the Notes or by the Guarantor under the Guaranty shall be
applied first against costs, expenses and indemnities due hereunder;
then against default interest, if any; then against any interest due
on the Advances; then against any amount of the Advances due and
payable; and thereafter against prepayment of the Advances. In the
event that payment is made in a currency other than Dollars or at a
location other than New York and such payment after conversion into
Dollars and/or transfer to New York does not result in the payment of
the amount in Dollars due hereunder, the Lender shall be entitled to
demand immediate payment of, and shall have a separate cause of
action for, the deficiency.
14. Set-Off
The Lender shall have the right, to the fullest extent permitted by
law, to apply amounts on deposit or account with the Lender or any of its
branches, subsidiaries or affiliates or other indebtedness at any time owing
by the Lender or any of its branches, subsidiaries or affiliates to or for the
credit of either Borrower in reduction of amounts past due from such Borrower
hereunder or under the relevant Note, and notwithstanding that such obligations
may be unmatured. For the purpose of enforcing its rights under this Clause,
the Lender is authorized to purchase with the money's standing to the credit of
any such account such other currencies as may be necessary to effect the
application. The Lender shall notify the relevant Borrower promptly after
effecting any such set-off.
15. Notices
All notices hereunder shall be in writing and shall be either
personally delivered, transmitted by postage prepaid registered air mail,
transmitted by internationally recognized courier service or transmitted by
telex or by facsimile message to the parties hereto at their respective
addresses set forth below (or, in either case, such other address as it may
notify to the other for this purpose):
16 Page 99 of 194
<PAGE> 100
Lender
THE NIPPON CREDIT BANK LIMITED, LOS ANGELES AGENCY
550 South Hope Street
Suite 2500
Los Angeles, California 90071, U.S.A.
Attention: Mr. Akihiro Yamasaki
Telephone: (213) 243-5555
Facsimile: (213) 892-0111
Telex: 215350 NCSLA UR; 674377 NCBLAX LSA
Borrower A
HYUNDAI ELECTRONICS INDUSTRIES CO.
11th Fl. Hyundai Jeonja Bldg., 66 Jeokseon-dong,
Chongro-ku, Seoul, Korea
Attention: Financing Department
Telephone: (822)398-4478
Facsimile: (822)733-2145/7
Telex: K29793/4 HDETN
Borrower B
HYUNDAI MERCHANT MARINE CO., LTD.
7th Fl. Mugyo Hyundai Bldg., 92 Mugyo-dong,
Chung-gu, Seoul, Korea
Attention: Financing Department
Telephone: (822)311-5280
Facsimile: (822)755-8788
Telex: K24402
Except as otherwise specified herein, all notices and other
communications shall be deemed to have been duly given on (i) the date of
receipt if delivered personally, (ii) the date fourteen (14) days after posting
if sent by mail, (iii) the date five (5) days after delivery to the courier if
sent by internationally recognized courier service, or (iv) the date of
transmission if transmitted by telex or facsimile message (with confirmed
answerback in the case of telex), whichever shall first occur; provided that
notices to be given by any of the Borrowers to the Lender shall be effective
only when received by the Lender. Except as otherwise expressly provided
herein all notices hereunder and all documents or instruments delivered in
connection with this transaction shall be in the English language or
accompanied by a certified English language translation.
17 Page 100 of 194
<PAGE> 101
16. Benefit of Agreement
(A) This Agreement shall be binding upon and enure to the benefit
of each party hereto and its successors and any permitted assignee or
transferee.
(B) Neither Borrower may assign or transfer all or any of its rights,
benefits and obligations hereunder or under the Note issued by it.
(C) The Lender may assign, transfer or participate, and any participant may
further subparticipate, all or any portion of its rights and obligations
hereunder and under the Notes. Any assignment by the Lender of all or
part of its rights and obligations hereunder and under the Notes shall
be effective and binding on each of the Borrowers upon notice from the
Lender. Upon any transfer, assignment or participation by the Lender
or subparticipation by a participant, the transferee, assignee,
participant or subparticipant shall be entitled, to the extent of the
interest transferred to the benefit of the indemnities, tax
reimbursements and rights of set-off of the Lender pursuant to the
provision of this Agreement as fully as if a party hereto. The acts of
the Lender or the failure of the Lender to act hereunder shall in all
circumstances be conclusive and binding on any transferee, assignee,
participant or subparticipant of the Lender's interest hereunder. The
Lender may provide to any potential assignee, transferee or
participant, and each participant may provide to any potential
subparticipant, such information as is reasonably necessary in
connection with the proposed transfer, assignment, participation or
subparticipation.
17. Costs and Expenses
(A) The Borrowers shall, jointly and severally, from time to time
on demand of the Lender reimburse the Lender for all costs and expenses
(including legal fees, expenses of travel, communication and printing
and all other out-of-pocket expenses) incurred by it in the negotiation
and preparation of this Agreement, the Notes, the related documents and
the preservation and/or enforcement of any of its rights hereunder and
thereunder.
(B) The Borrower shall, jointly and severally, pay all stamp, registration
and other taxes to which this Agreement or any judgment given in
connection herewith is or at any time may be subject and shall indemnify
the Lender against any liabilities, costs, claims and expenses resulting
from any failure by any of the Borrowers to pay or any delay of the
Borrower in paying any such tax.
18. Law
This Agreement shall be governed by and construed in accordance with
laws of the State of New York, U.S.A.
18 Page 101 of 194
<PAGE> 102
19. Jurisdiction; Waivers
(A) Each of the borrowers hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or the Note issued by it,
or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States
of America for the Southern District of New York, and appellate
courts from any thereof; and
(ii) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or
hereafter have to venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court.
(B) To the extent that any of the Borrowers may in any jurisdiction claim
for itself or its assets or revenues immunity from suit, execution,
attachment (whether in aid of execution, before judgment or otherwise)
or other legal process and to the extent that in any such jurisdiction
there may be attributed to itself or its assets or revenues such
immunity (whether or not claimed) the Borrower agrees not to claim and
irrevocably waives such immunity to the full extent permitted by the
laws of such jurisdiction.
(C) Each of the Borrowers irrevocably appoints the New York Office of
Hyundai Heavy Industries Co., Ltd., located at 300 Sylvan Avenue,
Englewood Cliffs, New Jersey 07632, U.S.A., as its agent to accept on
its behalf service of any and all process or other documents which may
be served in any action or proceedings in any of such courts and
further agrees that service upon such agent shall constitute valid and
effective service upon it. Such service shall be deemed completed on
delivery to the process agent (whether or not it is forwarded to and
received by any of the Borrowers). If for any reason a process agent
ceases to be able to act as such or no longer has an address in New
York, New York, within 30 days from the date of the occurrence of such
event, each of the Borrowers irrevocably agrees to appoint a substitute
process agent acceptable to the Lender, and to deliver to the Lender a
copy of the new process agent's acceptance of such appointment.
(D) Each of the Borrowers further irrevocably consents to service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
airmail, postage prepaid, to the Borrower at its address set forth in
Clause 15. Nothing herein shall affect the right of the Lender to
serve process in any other manner permitted by law.
(E) EACH OF THE BORROWERS AND THE LENDER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR THE NOTES AND FOR ANY COUNTER CLAIM
THEREIN.
19 Page 102 of 194
<PAGE> 103
20. Miscellaneous
(A) This Agreement constitutes the entire agreement of the parties with
respect to the subject matter thereof and may be amended by an
instrument in writing signed by the parties hereto.
(B) This Agreement may be signed in counterparts. Any single counterpart
or a set of counterparts signed, in either case, by the parties hereto
shall constitute a full and original agreement for all purposes.
(C) If any one or more of the provisions contained in this Agreement or any
document executed in connection herewith shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired.
(D) No failure or delay in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and not exclusive of any rights
or remedies provided by law.
(E) A Clause or Appendix is a reference to a clause hereof or appendix
hereto; and a sub-clause is a reference to a sub-clause of the Clause
in which the reference appears.
AS WITNESS the hands of the duly authorized representatives of the parties
hereto the day and year first before written.
BORROWER A HYUNDAI ELECTRONICS INDUSTRIES CO.
By: /s/ Il Sun Kim
-------------------------------
Name: IL SUN KIM
Title: Director
BORROWER B HYUNDAI MERCHANT MARINE CO., LTD.
By: /s/ Jong Hun Kim
-------------------------------
Name: JONG HUN KIM
Title: General Manager
LENDER THE NIPPON CREDIT BANK LIMITED,
LOS ANGELES AGENCY
By: /s/ Kaneyoshi Saito
-------------------------------
Name: KANEYOSHI SAITO
Title: Chief Rep. of Seoul
20 Page 103 of 194
<PAGE> 104
APPENDIX A
Form of Notice of Advance
From: HYUNDAI ELECTRONICS INDUSTRIES CO.
HYUNDAI MERCHANT MARINE CO., LTD.
To: THE NIPPON CREDIT BANK LIMITED, LOS ANGELES AGENCY
January ___, 1994
Dear Sirs,
We refer to the loan facility agreement (the "Agreement") dated January
28, 1994 and made between us as Borrowers and you as the Lender.
Terms defined in the Agreement have the same meanings herein.
We hereby give you notice that pursuant to the Agreement Hyundai
Electronics Industries Co., as Borrower A, wishes to drawdown Advance A of
U.S.$44,998,800, and Hyundai Merchant Marine Co., Ltd., as Borrower B, wishes
to drawdown Advance B of U.S.$29,999,200 on January ___, 1994. Please credit
the proceeds of [both Advance A and Advance B to account no. 1484004218
(ABA# 121000358; Swift Code# BOFAUS6S) in the name of Maxtor Corporation with
Bank of America located at 1850 Gateway Blvd., Concord, California 94520].
The proceeds of the Advances will be used by us as the funds for overseas
investments.
We confirm that at the date hereof the representations set out in
Clause 8 of the Agreement are true and that no Default or Event of Default has
occurred.
__________________________________
Name:
Title:
for and on behalf of
HYUNDAI ELECTRONICS INDUSTRIES CO.
__________________________________
Name:
Title:
for and on behalf of
MERCHANT MARINE CO., LTD.
21 Page 104 of 194
<PAGE> 105
APPENDIX B
Condition Precedent Documents
1. Certified copies of the Korean texts of the Articles of
Incorporation of, and the Korean Commercial Registry extracts
regarding, each of the Borrowers and the Guarantor, each as
amended to date, accompanied by true and correct English
translations thereof.
2. A sealed certificate of the Representative Director of each of
the Borrowers and the Guarantor certifying:
(a) resolutions of the Board of Directors of each of the
Borrowers or the Guarantor, as the case may be, authorizing
the execution and delivery of this Agreement and the relevant
Note or the Guaranty and the performance of its terms by the
Borrower or the Guarantor, as the case may be;
(b) the incumbency and the specimen signatures of the
Persons authorized to execute and deliver this Agreement or
the Guaranty, as the case may be, and any other documents
contemplated herein or therein for and on behalf of each of
the Borrowers or the Guarantor as the case may be; and
(c) any other matters as shall be requested by the
Lender.
3. A seal certificate of the Representative Director of each of
the Borrowers or the Guarantor giving the certificate referred to
in item 2 above.
4. Certified copies of all governmental approvals necessary in
connection with the execution, delivery, performance and
enforceability of this Agreement, the Notes or the Guaranty and
the transaction contemplated hereby or thereby.
5. Legal Opinion of Shin & Kim, Korean legal counsel to the
Lender, in form and substance satisfactory to the Lender.
6. Process agent appointment letters executed by each of the
Borrowers and the Guarantor, as the case may be and accepted
by the New York area office of Hyundai Heavy Industries Co.,
Ltd.
7. Guaranty duly executed by the Representative Director of the
Guarantor.
8. The Notes, each duly executed by the Representative Director
of the relevant Borrower.
9. Such other documents and opinions as the Lender may request.
22 Page 105 of 194
<PAGE> 106
APPENDIX C
LOAN GUARANTY
GUARANTY, dated as of January 28, 1994, made by HYUNDAI HEAVY INDUSTRIES
CO., LTD, a corporation organized and existing under the laws of the Republic of
Korea (the "Guarantor"). Except as otherwise defined herein, terms used herein
and defined in the Loan Agreement (as hereinafter defined) shall be used herein
as so defined.
W I T N E S S E T H :
WHEREAS, Hyundai Electronics Industries Co., Ltd. and Hyundai Merchant
Marine Co., Ltd. (collectively, the "Borrowers"; individually, a "Borrower")
have entered into a Loan Agreement, dated as of January 28, 1994 (as modified,
supplemented or amended from time to time, the "Loan Agreement"), with THE
NIPPON CREDIT BANK LIMITED, LOS ANGELES AGENCY as the lender (the "Lender"),
pursuant to which the Lender has agreed to make the Advances in the aggregate
amount of Seventy Four Million Nine Hundred Ninety Eight Thousand Dollars
(U.S.$74,998,000) to the Borrowers upon the terms and subject to the conditions
set forth therein;
WHEREAS, the Guarantor and the Borrowers are engaged in related business
and the Guarantor acknowledges the direct and indirect benefits to be derived
by it by the Advances to be made by the Lender to the Borrowers; and
WHEREAS, it is a condition precedent to the obligation of the Lender to
make the Advances to, and for the account of, the Borrowers that the Guarantor
shall have executed and delivered this Guaranty to the Lender, and the Guarantor
desires to execute and deliver this Guaranty;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Guarantor, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby makes the following representations and
warranties to the Lender and hereby covenants and agrees with the Lender, as
follows:
1. The Guarantor irrevocably and unconditionally guarantees as a
primary obligor and not as a surety merely the full and prompt payment when
due (whether at stated maturity, by acceleration or otherwise) of
the principal of and interest on (including interest accruing on or after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrowers, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Advances and of all other obligations and liabilities (including, without
limitation, indemnities, fees and interest thereon) of the Borrowers now
existing or hereafter incurred under, arising out of or in connection with the
Loan Agreement, the Notes or any document related thereto and the due
performance and compliance with the terms of any of them by the Borrowers, in
each case strictly in accordance with the terms thereof (collectively, the
"Guaranteed Obligations"). If any payment or performance obligations of the
Borrowers under the Loan Agreement, the Notes or any document related thereto
are stayed, enjoined or otherwise prevented, the Guarantor, upon demand
therefor, shall pay to the Person entitled thereto, or shall perform, as the
case may be, the obligations which would have been due or performed under such
document had such payment or performance not been stayed, enjoined or otherwise
prevented. All
23 Page 106 of 194
<PAGE> 107
payments by the Guarantor under this Guaranty shall be made on the same basis
as payments by the Borrowers under the document with respect to which the
relevant Guaranteed Obligations have been incurred. The Guarantor agrees that
the guaranty contained herein is a guaranty of payment and not merely of
collection.
2. The Guarantor hereby waives notice of acceptance of
this Guaranty and notice of any liability to which it may apply, and waives
presentment, demand of payment, protest, notice of dishonor or nonpayment of
any such liability, suit or taking of other action by the Lender against, and
any other notice to, any party liable thereon (including the Guarantor or any
other guarantor).
3. The Lender may, at any time and from time to time, without the
consent of or notice to the Guarantor, without incurring any responsibility
to the Guarantor, without impairing or releasing the obligations
of the Guarantor hereunder, upon or without any terms or conditions and in
whole or in part:
(a) change the manner, place or terms of payment
of, and/or change or extend the time of payment of, renew or alter, any of the
Guaranteed Obligations, any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the guaranty herein made shall
apply to the Guaranteed Obligations as so changed, extended, renewed or
altered;
(b) sell, exchange, release, surrender, realize
upon or otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure or howsoever securing,
the Guaranteed Obligations or any liabilities (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, and/or
any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrowers or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof;
(e) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrowers to the Lender regardless of what
liability or liabilities of the Borrowers remain unpaid;
(f) consent to or waive any breach of, or any act, omission or
default under, the Loan Agreement, the Notes or any document related thereto,
or otherwise amend, modify or supplement the Loan Agreement, the Notes or any
document related thereto; and/or
(g) act or fail to act in any manner referred to in this
Guaranty which may deprive the Guarantor of its right to subrogation against
the Borrowers to recover full indemnity for any payments made pursuant
to this Guaranty.
4. The obligations of the Guarantor under this Guaranty are absolute
and unconditional and shall remain in full force and effect without regard
to, and shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation: (a) any action or inaction by the Lender as contemplated in
Section 3
24 Page 107 of 194
<PAGE> 108
of this Guaranty; (b) any invalidity, irregularity or unenforceability of all
or part of the Guaranteed Obligations or of any security therefor; (c) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrowers or the Guarantor against the Lender; or (d) any other circumstances
whatsoever (with or without notice to or knowledge of the Borrowers or the
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrowers of the Guaranteed Obligations, or of the
Guarantor under this Guaranty, in bankruptcy or in any other instance.
5. Notwithstanding anything to the contrary in this Guaranty, the
Guarantor hereby irrevocably waives all rights which may have arisen in
connection with this Guaranty to be subrogated to any of the rights
(whether contractual, under the Bankruptcy Code, including Section 509 thereof,
under common law or otherwise) of the Lender against the Borrowers or against
the Lender for the payment of the Guaranteed Obligations. The Guarantor
further irrevocably waives all contractual, common law, statutory or other
rights of reimbursement, contribution, exoneration or indemnity (or any similar
right) from or against the Borrowers or any other Person which may have arisen
in connection with this Guaranty or against the Borrowers under any security
document. So long as the Guaranteed Obligations remain outstanding, if any
amount shall be paid by or on behalf of any Borrower to the Guarantor on
account of any of the rights waived in this paragraph, such amount shall be
held by the Guarantor in trust, segregated from other funds of the Guarantor,
and shall, forthwith upon receipt by the Guarantor, be turned over to the
Lender in the exact form received by the Guarantor (duly endorsed by the
Guarantor to the Lender, if required), to be applied against the Guaranteed
Obligations, whether matured or unmatured, in such order as the Lender may
determine. The provisions of this paragraph shall survive the term of this
Guaranty and the payment in full of the Guaranteed Obligations.
6. In order to induce the Lenders to make Advances to the Borrowers,
the Guarantor makes the following representations, warranties and agreements:
(a) The Guarantor (i) is a duly organized and validly existing
corporation under the laws of the Republic of Korea and (ii) has the power and
authority to own its property and assets and to transact the business in which
it is engaged.
(b) The Guarantor has the corporate power to execute, deliver
and perform the terms and provisions of this Guaranty and has taken all
necessary corporate action to authorize the execution, delivery and
performance by it of this Guaranty. The Guarantor has duly executed and
delivered this Guaranty, and this Guaranty constitutes its legal, valid and
binding obligation enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent transfers, moratorium or similar laws effecting the
equitable principles (whether enforcement is sought by proceeding in equity or
at law).
(c) Neither the execution, delivery or performance by the
Guarantor of this Guaranty, nor compliance by it with the terms and provisions
hereof, (i) will contravene any provision of any law, statute, rule or
regulation or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any lien upon any of the property or
assets of the Guarantor pursuant to the terms of any indenture, mortgage, deed
of trust, credit agreement, loan
25 Page 108 of 194
<PAGE> 109
agreement or any other agreement, contract or instrument to which the Guarantor
is a party or by which it or any of its property or assets is bound or to which
it may be subject, which conflict, breach, default or lien will have a material
adverse effect on (x) the Guarantor or any of its subsidiaries, (y) the ability
of the Guarantor to perform its obligations hereunder or (z) any of the rights
of the Lender hereunder, or (iii) will violate any provision of the Articles of
Incorporation or By-Laws of the Guarantor.
(d) The Guarantor has obtained all consents, licenses, approvals
and authorizations and has effected all declarations, filings and
registrations necessary for the valid execution, delivery, performance,
legality, validity and enforceability of this Guaranty, and a license from a
designated Class A foreign exchange bank, if any, in respect of Dollar
payments due hereunder and under any document under which the Guaranteed
Obligation arise and the same are in full force and effect. All application,
filings and reports delivered to any government agency by or on behalf of the
Guarantor in connection with this Guaranty have been truthfully completed and
duly filed, and true and correct copies of such applications, filings and
reports and all related consents, licenses, approvals, authorizations,
declarations, filings and registrations have been delivered to the Lender. The
Guarantor undertakes, and undertakes to cause the Borrowers, to obtain all
consents, licenses, approvals, authorization and permits and to effect all
declaration, filings and registrations, which become necessary in the future
for the performance or enforceability of this Guaranty and the Guaranteed
Obligations.
(e) There are no actions, suits or proceedings pending or, to the
best knowledge of the Guarantor, threatened (i) with respect to the loan
Agreement, the Notes, this Guaranty or any other document related hereto or
thereto or (ii) that are reasonably likely to materially and adversely affect
the business, operations, property, assets, condition (financial or otherwise)
or prospects of the Guarantor.
(f) The Guarantor is not entitled to any immunity, whether
characterized as sovereign immunity or otherwise, from any legal proceedings,
whether in the United States of America, the Republic of Korea or elsewhere,
to enforce or collect upon this Guaranty (including, without limitation,
immunity from service of process, immunity from jurisdiction of any court or
tribunal, and immunity of any of its property from attachment prior to entry
of judgment and from attachment in aid of execution, or from execution, upon a
judgment) in respect of itself or its property, and insofar as the Guarantor
or any of its property should at any time become entitled to any such
immunity, the Guarantor, in respect of its obligations under this Guaranty,
expressly and irrevocably waives any such immunity in any action or proceeding.
(g) The obligations of the Guarantor under this Guaranty ranks at
least pari passu with all other unsecured indebtedness of the Guarantor.
7. This Guaranty is a continuing one and all liabilities to which
it applies or may apply under the terms hereof shall be conclusively presumed
to have been created in reliance hereon. No failure or delay on the part of
the Lender in exercising any right, power or privilege hereunder and no course
of dealing between the Guarantor, the Lender shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege. The
rights, powers and remedies herein expressly provided are cumulative and not
exclusive of any rights, powers or remedies which the Lender would otherwise
have. No notice to or demand on the Guarantor in any case shall entitle
26 Page 109 of 194
<PAGE> 110
the Guarantor to any other further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Lender to any other
or further action in any circumstances without notice or demand.
8. This Guaranty shall be binding upon the Guarantor and
its successors and assigns and shall inure to the benefit of the Lender and
their respective successors and assigns.
9. Neither this Guaranty nor any provision hereof may be
assigned by the Guarantor, changed, waived, discharged or terminated unless
such assignment, change, waiver, discharge or termination is in writing signed
by and consented to by the Lender as provided in the Loan Agreement.
10. The Guarantor acknowledges that an executed (or conformed)
copy of each transaction document has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
11. In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such rights,
upon the occurrence of an Event of Default, the Lender is hereby authorized at
any time or from time to time, without presentment, demand, protest, or other
notice of any kind to the Guarantor or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time held
or owing by the Lender (including without limitation by branches and agencies
of the Lender, if any, wherever located) to or for the credit or the account of
the Guarantor against and on account of the Guaranteed Obligations,
irrespective of whether or not the Lender shall have made any demand hereunder.
12. All notices and other communications hereunder shall be made
at the addresses, in the manner and with the effect provided in Section 15 of
the Loan Agreement, provided that, for this purpose, the address of the
Guarantor shall be the one specified opposite its signature below.
13. If claim is ever made upon the Lender for repayment
or recovery of any amount or amounts received in payment or on account of any
of the Guaranteed Obligations and any of the aforesaid payees repays all or
part of said amount by reason of (a) any judgment, decree or order of any court
of administrative body having jurisdiction over such payee or any of its
property or (b) any settlement or compromise of any such claim effected by such
payee with any such claimant (including the Borrowers), then and in such event
the Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon it, notwithstanding any revocation hereof or
the cancellation of the Loan Agreement, and the Guarantor shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee, and the Guarantor agrees that it will indemnify the Lender on
demand for all reasonable costs and expenses (including legal fees) incurred by
the Lender in connection with such repayment or recovery, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
14. This Guaranty and the rights and obligations of the
Lender and the Guarantor hereunder shall be construed in accordance with and
governed by the law of the State of New York. Any legal
27 Page 110 of 194
<PAGE> 111
action or proceeding with respect to this Guaranty may be brought in the courts
of the State of New York or of the United Sates of the Southern District of New
York, and by execution and delivery of this Agreement, the Guarantor hereby
irrevocably accepts of itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Guarantor
hereby irrevocably designates, appoints and empowers its New York area office,
located on the date hereof at 300 Sylvan Avenue, Englewood Cliffs, New Jersey
07632, U.S.A., as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property, service of
any and all legal process, summons, notices and documents which may be served
in any such action or proceeding. If for any reason such designee, appointee
and agent shall cease to be available to act as such, the Guarantor agrees to
designate a new designee, appointee and agent in New York City on the terms and
for the purposes of this provision satisfactory to the Lender. The Guarantor
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Guarantor at
its address set forth opposite its signature below, such service to become
effective thirty (30) days after such mailing. Nothing herein shall affect the
right of the Lender to serve process in any other manner permitted by law or to
commence legal proceeding or otherwise proceed against the Guarantor in any
other jurisdiction. The Guarantor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with the
Guaranty brought in the courts referred to above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum.
15. The obligation of the Guarantor to make payment in Dollars of
any Guaranteed Obligation due hereunder shall not be discharged or satisfied by
any tender, or any recovery pursuant to any judgment, which is expressed in or
converted into any currency other than Dollars, except to the extent such
tender or recovery shall result in the actual receipt by the Lender of the full
amount of Dollars expressed to be payable in respect of any such Guaranteed
Obligations. The obligation of the Guarantor to make payment in Dollars as
aforesaid shall be enforceable as an alternative or additional cause of action
for the purpose of recovery in Dollars of the amount, if any, by which such
actual receipt shall fall short of the full amount of Dollars expressed to be
payable in respect of any such Guaranteed Obligations, and shall not be
affected by judgment being obtained for any other sums due under this Guaranty.
16. This Guaranty is to be a continuing guarantee and shall remain
in full force and effect until all moneys now or hereafter payable by the
Borrowers under the Loan Agreement, the Notes or any related document to which
it is a party shall have been paid or satisfied in full, and is in addition to
and not in substitution for, and shall not be prejudiced or affected by, any
other security or guarantee now or hereafter held by the Lender.
17. Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibited or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
18. The Guarantor hereby agrees to pay all costs and expenses,
including attorneys' fees and disbursements, incurred by the Lender in the
enforcement of any and all terms of this Guaranty.
28 Page 111 of 194
<PAGE> 112
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.
HYUNDAI HEAVY INDUSTRIES CO., LTD
By
------------------------------------
Name:
Title:
Seal:
Address: 140-2 Kye-dong,
Chongro-ku,
Seoul, Korea
Attention:
Telephone:
Facsimile:
Telex:
Answerback:
29 Page 112 of 194
<PAGE> 113
APPENDIX D
PROMISSORY NOTE
US$[29,999,200]
[44,998,800]
January ___, 1994
FOR VALUE RECEIVED, the undersigned, [HYUNDAI ELECTRONICS INDUSTRIES CO.]
[HYUNDAI MERCHANT MARINE CO., LTD.], a corporation organized and existing under
the laws of the Republic of Korea ("Borrower [A][B]"), hereby promised to pay
to the order of THE NIPPON CREDIT BANK LIMITED, LOS ANGELES AGENCY (the
"Lender"), at 550 South Hope Street, Suite 2500, Los Angeles, California 90017,
U.S.A., on the Repayment Date, as defined in the Loan Agreement dated as of
January 28, 1994 (the same as amended, modified or supplemented from time to
time, the "Loan Agreement"), among the Borrower [A][B], [Hyundai Electronics
Industries Co., Ltd.] [Hyundai Merchant Marine Co., Ltd.] and the Lender, the
aggregate unpaid principal amount of the Advance [A][B] made to the Borrower
[A][B] by the Lender pursuant to the Loan Agreement in lawful money of the
United States of America in immediately available funds, and to pay interest
from the date hereof on the principal amount hereof from time to time
outstanding in like funds, at the rate or rates per annum and payable on the
dates provided in the Loan Agreement. Terms not defined herein have the
meanings set forth in the Loan Agreement.
Borrower [A][B] promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from their due
dates at the rate or rates provided in the Loan Agreement.
Borrower [A][B] hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on the schedule attached hereto and
made a part hereof or on a continuation thereof which shall be attached hereto
and made a part hereof, or otherwise recorded by such holder in its internal
records; provided, however, that the failure of the holder hereof to make such a
notation or any error in such notation shall not affect the obligations of
Borrower [A][B] under this Note.
This Note is one of the Notes referred to in the Loan Agreement, which,
among other things, contains provisions for the acceleration of the maturity
hereof upon the happening of certain events, for optional prepayment of the
principal hereof prior to the maturity hereof and for the amendment or waiver
of certain provisions of the Loan Agreement, all upon the terms and conditions
therein specified. This Note shall be construed in accordance with and
governed by the laws of the State of New York, the United States of America.
[HYUNDAI ELECTRONIC INDUSTRIES CO.]
[HYUNDAI MERCHANT MARINE CO., LTD.]
by
---------------------------------
Name:
Title:
30 Page 113 of 194
<PAGE> 114
Loans and Payments
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Principal of Name of Person
Date of Drawdown Amount of Loan Note to Date Making Notation
- ---------------- -------------- ------------ ---------------
</TABLE>
31 Page 114 of 194
<PAGE> 115
Exhibit 3
LOAN AGREEMENT
US$37,499,000
HYUNDAI HEAVY INDUSTRIES CO., LTD.
- BORROWER -
AMERICAN EXPRESS BANK LTD.
- LENDER -
AMERICAN EXPRESS BANK LTD.
- AGENT -
JANUARY 28, 1994
1 Page 115 of 194
<PAGE> 116
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Page
------- ----
<S> <C>
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.01 Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.02 Availability Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.03 Banking Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.04 Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.05 Dollars or US$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.06 Drawdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.07 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.08 Interbank Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.09 Interest Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.10 Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.11 Interest Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.12 Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.13 Letter Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.14 Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.15 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.16 Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.17 Repayment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.18 Headings and References . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2. THE LOAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.01 Purpose and Amount of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.02 Drawdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.03 Cancellation of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3. INTEREST, DEFAULT INTEREST AND FEES . . . . . . . . . . . . . . . . . . . . . 9
3.01 Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.02 Interest Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.03 Default Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.04 Front-End Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.05 Agency Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.06 Stamp Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.07 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.08 Maximum Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
2 Page 110 of 194
<PAGE> 117
<TABLE>
<CAPTION>
Article
-------
Page
----
<S> <C> <C>
4. PAYMENT AND REPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.01 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.02 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.03 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.04 Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.05 Banking Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.06 Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.07 Loan Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5. SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.01 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6. YIELD PROTECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.01 Substitute Basis of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.02 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.03 Compliance Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.04 Change of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.05 Adversity Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.06 Funding Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.07 Dollar Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7. BORROWER'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 15
7.01 Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.02 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.03 Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.04 Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.05 Agreement Binding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.06 Other Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.07 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.08 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.09 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.10 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.12 Title to Properties; Possession Under Leases . . . . . . . . . . . . . . . . . . 16
8. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.01 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.02 Rights; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.03 Representations & Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.04 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.05 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
3 Page 117 of 194
<PAGE> 118
<TABLE>
<CAPTION>
Article Page
------- ----
<S> <C> <C>
8.06 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.07 Merger; Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.08 Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.09 Further Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.01 Initial Drawdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.02 Subsequent Drawdowns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.03 Other Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.01 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.02 Consequences of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11. AGENT AND LENDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.02 Decision of Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.03 Reimbursement for Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.04 Liability and Credit Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.05 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.06 Agent; Other Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.07 Payments, Notices and Determinations by the Agent . . . . . . . . . . . . . . 23
11.08 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.01 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.02 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.03 Waiver; Cumulative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.04 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.06 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.07 Waiver of Sovereign Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.08 Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.09 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
12.10 Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
12.11 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
12.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
4 Page 118 of 194
<PAGE> 119
<TABLE>
<CAPTION>
EXHIBITS
--------
<S> <C> <C>
EXHIBIT A Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
EXHIBIT B Notice of Drawdown . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
EXHIBIT C Drawdown Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 31
EXHIBIT D Transfer Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
5 Page 119 of 194
<PAGE> 120
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is entered into as of this 28th
day of January, 1994 by and among:
HYUNDAI HEAVY INDUSTRIES CO., LTD., a juridical person (chusik hoesa)
organized and existing under the laws of Republic of Korea ("Korea"),
with its registered head office at 1, Jeonha-dong, Dong-ku, Ulsan,
Kyungsangnam-do, Korea (the "Borrower"); and
AMERICAN EXPRESS BANK LTD., a bank organized and existing under the
laws of the State of Connecticut acting through its Singapore branch
at 16 Collyer Quay, Raffles Place, Singapore 0104 (the "Lender"); and
AMERICAN EXPRESS BANK LTD., acting through its Singapore branch as
agent for the Lender (referred to herein in such capacity as the
"Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Agent and the Lender to
provide loans in an aggregate principal amount not to exceed Thirty-Seven
Million Four Hundred Ninety Nine Thousand Dollars (US$37,499,000) to finance
the investment in Maxtor Corporation at 211 Riveroaks Parkway, San Jose, CA,
U.S.A.; and
WHEREAS, subject to the terms and conditions of the Agreement, the
Lender has agreed to extend to the Borrower the loans so requested by the
Borrower.
NOW, THEREFORE, it is hereby agreed as follows:
Article 1. Definitions.
In addition to those terms defined above, as used herein the following terms
shall have the meanings set forth below, which shall include both the singular
and plural thereof.
1.01 "Advance" shall mean an advance in same day funds (or such other
Dollar funds as are then customary for the settlement of international
loan transactions) on behalf of the Borrower by the Lender of a
Drawdown as specified in Section 2.02 hereof.
1.02 "Availability Period" shall mean a period beginning the date of this
Agreement and ending three (3) months thereafter.
1.03 "Banking Day" shall mean a day on which banks are open for business in
New York, Singapore, Seoul and Hong Kong and on which deposit
transactions in Dollars are being carried out in the London interbank
market ("Interbank Market").
1.04 "Commitment" shall mean Thirty-Seven Million Four Hundred Ninety Nine
Thousand Dollars (US$37,499,000) or where the context so requires, the
obligation of the Lender to make the Advances to the Borrower in an
aggregate principal amount not exceeding such amount subject to the
terms and conditions of this Agreement.
6 Page 120 of 194
<PAGE> 121
1.05 "Dollars" or "US$" shall mean dollars in the lawful currency of the
United States of America.
1.06 "Drawdown" shall mean the borrowing by the Borrower of all or any part
of the Commitment.
1.07 "Event of Default" shall have the meaning set forth in Section 10.01.
1.08 "Interbank Rate" shall mean, with respect to each Interest Period, the
interest rate which is determined by the Lender in its sole discretion
to be the arithmetic mean of the rates per annum (rounded upwards, if
necessary, to the nearest 1/16%) quoted on the LIBO page (or such
other page as may display London interbank offered rates of major
banks for Dollar deposits) on the Reuter Monitor Money Rates Services
(or if such quote is unavailable on the relevant Interest
Determination Date, the rate quoted by a reference bank in London
selected by the Lender) for the period corresponding to such Interest
Period at approximately 11:00 a.m. (London time) on the Interest
Determination Date prior to the commencement of such Interest Period.
1.09 "Interest Determination Date" shall mean the date which is two (2)
days during which banks are open for business in London prior to the
first day of each Interest Period.
1.10 "Interest Payment Date" shall mean the last day of each Interest
Period.
1.11 "Interest Period" shall mean the period commencing on the date of the
first Drawdown and having a duration of three (3) or six (6) months
(such period to be selected at the Borrower's option) and each period
thereafter commencing on the last day of the then current Interest
Period and having a duration of three (3) or six (6) months (such
period to be selected at the Borrower's option);provided, that with
respect to any Drawdown after the first Drawdown the first Interest
Period with respect to such Drawdown shall commence on the date of
such Drawdown and terminate on the last day of the then current
Interest Period; provided, further, that the last Interest Period
which commences prior to the Repayment Date shall terminate on the
Repayment Date. Notwithstanding the above, "Interest Period" shall
also mean with respect to any amounts in default, such periods as the
Lender shall elect pursuant to Section 3.03(a).
1.12 "Lending Office" shall mean such office or offices of the Lender (or
its successor) as may be from time to time designated as the Lending
Office, the initial Lending Offices being specified in the preamble of
this Agreement.
1.13 "Letter Agreements" shall mean the Letter Agreements as defined in
Section 3.05 hereof.
1.14 "Loan" shall mean the outstanding balance from time to time of all
Drawdowns made by the Borrower under this Agreement.
1.15 "Note" shall mean the note payable to the order of the Lender, issued
by the Borrower substantially in the form of Exhibit A hereto and in
any event in form and substance satisfactory to the Agent.
7 Page 121 of 194
<PAGE> 122
1.16 "Person" shall mean any individual, company, corporation, partnership,
joint venture, trust or unincorporated association or any state or
government or any agency, instrumentality or political subdivision of
any state or government.
1.17 "Repayment Date" shall mean the fifth anniversary date of the date of
the execution of this Agreement.
1.18 In this Agreement:
(a) headings are inserted for convenience only and shall not affect
the construction of this Agreement and, unless otherwise
specified, all references to Sections and Exhibits are to
Sections and Exhibits of this Agreement;
(b) references to "month" shall mean the period commencing on one day
in a calendar month and ending on the numerically corresponding
day in the next calendar month; provided that if a period
commences on the last day in a calendar month or if there is no
numerically corresponding day in the month in which the period
ends, that period shall end on the last day in that later month,
and the references to "months" shall be construed accordingly;
(c) references to any document are to be construed as references to
such document as amended or supplemented from time to time; and
(d) references to any enactment shall include re-enactments,
amendments and extensions thereof.
Article 2. The Loan.
2.01 Purpose and Amount of Loan. To assist the Borrower in financing the
investment in Maxtor Corporation in California, U.S.A., and subject to
the terms and conditions hereof and in reliance, inter alia, on the
representations of the Borrower set forth in Article 7, the Lender
hereby agrees to make Advances in favor of the Borrower in an
aggregate amount up to the Commitment during the Availability Period
according to the procedure set forth in Section 2.02; provided, that
neither the Agent nor the Lender shall have any responsibility as to
the Borrower's application of the Advances or the Loan.
2.02 Drawdown. (a) Subject to the terms and conditions hereof, the
Borrower may borrow in an aggregate amount up to but not exceeding the
Commitment on any Banking Day during the Availability Period in one or
more Advances each in the minimum amount of Five Million Dollars
(US$5,000,000) or a higher amount which is an integral multiple of One
Million Dollars (US$1,000,000) or a lower amount equal to the then
undrawn amount of the Commitment, by the Borrower's instructing the
Lender through the Agent to make Advances. The Lender shall not have
any obligation to lend hereunder after the last day of the
Availability Period.
(b) The Borrower shall give the Agent a notice of Drawdown,
substantially in the form of Exhibit B hereto, at least three (3)
Banking Days (or such shorter period as the Lender shall otherwise
agree) prior to the proposed date of such Drawdown, provided, that
on the
8 Page 122 of 194
<PAGE> 123
proposed date of such Drawdown all applicable conditions precedent
specified in Article 9 have been satisfied. Such notice once received
by the Agent shall be irrevocable and binding on the Borrower and the
Borrower shall reimburse the Agent and the Lender, on demand, for any
costs or losses incurred by the Agent and the Lender in the event that
the Borrower does not satisfy all conditions precedent applicable to
such Drawdown on the date of Drawdown.
(c) Upon receipt of the notice of Drawdown, the Agent shall
notify the Lender of the date of Drawdown and the amount of the
Advance. Upon receipt of such notice the Lender shall make
available its Advance to the Agent on the date of Drawdown.
2.03 Cancellation of Commitment. The Borrower may not cancel all or any
part of the Commitment before the expiration of the Availability
Period except as expressly provided in this Agreement; provided that
any part of the undrawn Commitment as of the final date of the
Availability Period shall be automatically cancelled.
Article 3. Interest, Default Interest and Fees.
3.01 Interest Rate. Subject to Section 3.08 below, the rate of interest on
the Loan for each Interest Period shall be four-fifths of one percent
(0.8%) per annum above the Interbank Rate (the "Interest Rate").
3.02 Interest Determination. The applicable Interest Rate for any given
Interest Period shall be determined on the relevant Interest
Determination Date. Promptly after each Interest Determination Date,
the Agent shall notify the Borrower and the Lender of the Interest
Rate and the amount of interest to be payable on the Interest Payment
Date for the relevant Interest Period.
3.03 Default Interest. (a) In the event the Borrower fails to make
payment of all or any portion of the Loan when due or any other
payment due hereunder (whether at its stated maturity, by acceleration
or otherwise), the Borrower shall pay interest on the unpaid amount,
to the extent permitted by law, from and including such due date until
the payment of said sum in full (after as well as before judgment) in
Dollars at a rate equal to one percent (1.0%)per annum above the
Interest Rate with respect to the immediately preceding Interest
Period calculated pursuant to Section 3.01 above, or at the option of
the Agent, at the rate that is one and four-fifths of one percent
(1.8%) per annum in excess of the Interbank Rate for interest periods
of one day, one week, one month or three months (as the Agent shall
elect in its sole discretion) determined on the Banking Day succeeding
that on which the Agent became aware of the default and for successive
interest periods thereafter so long as such amount remains unpaid.
Such interest shall be payable on the last day of each such interest
period and at any other time on demand of the Agent.
(b) In addition to payment of such default interest, the Borrower
shall indemnify the Lender, on demand, against any costs or losses
resulting from the Borrower's failing to pay when due any amounts
of principal or interest hereunder.
3.04 Front-End Fee. The Borrower agrees to pay to the Agent for the
account of the Agent and in the discretion of the Agent for the
account of the Lender a front-end fee as separately agreed
9 Page 123 of 194
<PAGE> 124
between the Borrower and the Agent by a front-end fee letter agreement
being entered into concurrently herewith and considered to be
incorporated herein.
3.05 Agency Fee. During the term of this Agreement, the Borrower shall pay
to the Agent for its own account an agency fee in the amount as
separately agreed between the Borrower and the Agent by an agency fee
letter agreement being entered into concurrently herewith and
considered to be incorporated herein (the front-fee letter agreement
and the agency fee letter agreement being hereinafter collectively
referred to as the "Letter Agreements"). The agency fee shall be
payable annually in advance not later than thirty (30) days from the
date hereof for the first year and thereafter on each anniversary of
the date hereof.
3.06 Stamp Taxes. The Borrower shall pay promptly all stamp, documentary
and other like duties, levies, imposts, charges, fees, deductions or
withholdings of any nature by any taxing authority to which this
Agreement, the Letter Agreements and the Note (or any of them) may be
subject or give rise and shall indemnify the Agent and the Lender on
demand against any and all liabilities with respect to or resulting
from any delay or omission on the part of the Borrower to pay any such
levies, duties, imposts, charges, fees, deductions or withholdings.
3.07 Costs. The Borrower shall, whether or not any portion of the
Commitment is advanced, pay to the Agent in the manner specified by
the Agent on demand, the charges including but not limited to legal
fees, printing costs, travel expenses, communication charges, signing
and publicity costs incurred by or on behalf of the Agent or the
Lender in connection with the negotiation, preparation, execution,
delivery and implementation of this Agreement (and actual or proposed
restructuring, rescheduling, amendment or modification hereto or
request therefor and any waiver hereunder), the Letter Agreements and
all documents executed pursuant hereto, and all costs, expenses and
amounts whatsoever, including the fees and expenses of counsel, which
the Agent or the Lender may expend or become liable for in demanding,
suing for, recovering and receiving payment of any sum due hereunder
and under any documents executed pursuant hereto.
3.08 Maximum Interest Rate. (a) Nothing in this Agreement or the Note to
the contrary shall require the Borrower to pay interest at a rate
exceeding the maximum rate permitted by applicable law. Neither this
Section nor Section 12.06 is intended to limit the rate of interest
payable for the account of the Lender to the maximum rate permitted by
the laws of the State of New York (or any other applicable law) if a
higher rate is permitted with respect to such Lender by supervening
provisions of the United States Federal law.
(b) If the amount of interest payable for the account of the Lender
on any Interest Payment Date in respect of the immediately preceding
Interest Period, computed pursuant to this Agreement, would exceed the
maximum amount permitted by applicable law to be charged by such
Lender, the amount of interest payable for its account on such
Interest Payment Date shall automatically be reduced to such maximum
permissible amount.
(c) If the amount of interest payable for the account of the Lender
in respect of any Interest Period is reduced pursuant to sub-section
(b) and the amount of interest payable for its account in respect of
any subsequent Interest Period would be less than the maximum amount
permitted by law to be charged by the Lender, then the amount of
interest payable
10 Page 124 of 194
<PAGE> 125
for its account in respect of such subsequent Interest Period shall be
automatically increased to such maximum permissible amount; provided
that at no time shall the aggregate amount by which interest paid for
the account of the Lender has been increased pursuant to this sub-
section (c) exceed the aggregate amount by which interest paid for
its account has theretofore been reduced pursuant to sub-section (b).
Article 4. Payment and Repayment
4.01 Interest. Interest at the applicable Interest Rate shall be payable
in arrears on each Interest Payment Date and shall be calculated on
the basis of the actual number of days elapsed and a year of 360 days.
Interest shall accrue from and including the first day of an Interest
Period to but not including the last day of such Interest Period.
4.02 Repayment. The Borrower shall repay the full amount of the Loan to
the Lender on the Repayment Date; provided, that the Agent or the
Lender may call the Loan at any time in accordance with the provisions
hereof.
4.03 Prepayment. The Borrower may prepay the Loan in whole or in part in
minimum amount of Five Million Dollars (US$5,000,000) and an integral
multiple thereof on any Interest Payment Date without any penalty or
premium upon giving of sixty (60) days' prior notice to the Agent;
provided that such prepayment shall be accompanied by payment of all
interest and other amounts then due hereunder. Any partial prepayment
shall be applied in inverse order of maturity and sums prepaid may not
be reborrowed.
4.04 Application of Payments. Notwithstanding anything herein to the
contrary, all payments made to or collected by the Agent or the Lender
hereunder, under the Letter Agreements or under the Note shall be
applied by the Agent for its own account and/or for the account of the
Lender in the following order of priority, (1) to any amount then due
and payable to the Agent or the Lender hereunder, under the Letter
Agreements, or under the Note, not otherwise listed in this Section,
(2) to any fee then due and payable, (3) to any accrued default
interest then due and payable, (4) to accrued interest then due and
payable, (5) to principal then due and payable, and (6) to prepayment
of the Loan as provided in Section 4.03.
4.05 Banking Day. Whenever any payment or calculation is to be made on a
day which is not a Banking Day, such payment or calculation may be
made on the next succeeding Banking Day unless, with respect to
payments, as a result thereof, such payment would be made in the next
calendar month, in which case payment shall be made on the next
preceding Banking Day. Any adjustment so made shall, as appropriate,
be reflected in the computation of interest, fees and other amounts
due hereunder.
4.06 Place of Payment. All sums payable to the Agent by the Borrower or
the Lender hereunder or under any document contemplated hereby,
including but not limited to payments of principal and interest, the
fees and any costs or expenses shall be payable in same day funds to
the account of the Agent (account no. 001107) with American Express
Bank Ltd. in New York, U.S.A., no later than 10:00 a.m. (New York
time) on the due date thereof or to such other account or at such
place as the Agent may by notice to the Borrower instruct.
11 Page 125 of 194
<PAGE> 126
4.07 Loan Account. The Agent shall open and maintain on its books a loan
account in the Borrower's name and showing the Advances, the Loan,
repayments, prepayments, the computation and payment of interest and
other amounts due and sums paid hereunder. Such loan account shall be
conclusive and binding on the Borrower as to the amount at any time
due from the Borrower, absent manifest error in computation.
Article 5. Security.
5.01 Note. (a) As a condition precedent to the first Drawdown hereunder,
the Borrower shall deliver to the Agent the Note payable to the Agent
for the account of the Agent and the Lender in the principal amount
equal to the Commitment duly executed by the Borrower.
(b) The Note may be divided, replaced or consolidated at the option
of the Agent, in whole or in part, at a time or times designated by
the Agent.
Article 6. Yield Protection.
6.01 Substitute Basis of Borrowing. (a) If the Agent has determined on
any Interest Determination Date that Dollar deposits for periods equal
to the relevant Interest Period and in an amount comparable to the
Advances to be outstanding during such Interest Period are not
available to prime banks in the London interbank market, or the Agent
has been notified on any Interest Determination Date by the Lender
that the Interbank Rate does not accurately reflect the cost to the
Lender of making or maintaining the Advances during such Interest
Period, then the Agent shall so notify the Borrower and the Lender.
(b) The Agent in consultation with the Lender, promptly after the
giving of such notice, shall enter into negotiations with the Borrower
in good faith with a view to agreeing on an alternative mutually
acceptable basis for funding the Loan and for determining the Interest
Rates from time to time applicable to the Loan (hereinafter referred
to as the "Substitute Basis of Borrowing"). If at the expiry of
thirty (30) days from the date of the notice, the Agent, with the
written concurrence of the Lender, and the Borrower have agreed on
such Substitute Basis of Borrowing, then it shall be retroactive to
and take effect from the beginning of the then current Interest
Period.
(c) If at the expiry of thirty (30) days from the date of any such
notice, no Substitute Basis of Borrowing has been agreed upon, then
(i) the Borrower shall prepay the Loan on the thirtieth day after the
date of such notice, and (ii) interest shall be payable on the Loan at
the rate which is four-fifths of one percent (0.8%) per annum above
the per annum interest rate which shall be notified to the Agent by
the Lender as representing the cost to the Lender of funding (whether
in Dollars or any other currency) the Advances during such period.
6.02 Taxes. (a) Any and all payments made by the Borrower hereunder or
under any instrument delivered hereunder shall be made free and clear
of and without deduction for any present or future taxes, levies,
imposts, deductions, charges, or withholdings, and all liabilities
with respect thereto (excluding taxes imposed on net income of the
Lender or the Agent by the jurisdiction of its incorporation and any
political subdivisions thereof) (all such non-excluded taxes
hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to make any such deduction from any payment hereunder,
then (i) the sum payable shall
12 Page 126 of 194
<PAGE> 127
be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section) the Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes, or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder
or from the execution, delivery or registration of, or otherwise with
respect to, any instrument delivered hereunder (hereinafter referred
to as "Other Taxes").
(c) The Borrower will indemnify the Agent and the Lender for the full
amount of Taxes or Other Taxes (including without limitation any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under
this Section) paid by the Agent and the Lender or any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally assessed. This indemnification shall be paid
within thirty (30) days from the date the Agent or the Lender makes
written demand therefor.
(d) Within thirty (30) days after the date of any payment of Taxes
the Borrower will furnish to the Agent, at its address referred to in
Section 12.11, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in sub-sections (a) through (d) above shall survive the
payment in full of principal and interest hereunder and under any
instrument delivered hereunder.
(f) If the Borrower shall be required to reimburse the Agent or the
Lender or make any payment under sub-sections (a) through (e) above in
respect of any Taxes or Other Taxes imposed by a law or regulation
which comes into effect after the date of this Agreement, the Borrower
shall be free at any time within thirty (30) days of the effectiveness
of the requirement of such reimbursement or payment to prepay the Loan
as provided in Section 6.05, subject to giving the Agent not less than
five (5) Banking Days' prior notice thereof.
6.03 Compliance Costs. (a) The cost of maintaining any reserves or
special deposits against the Advances and any other cost of complying
with any law, regulation or condition with respect to the Advances or
relating in any way to funding or renewing the Advances, including
without limitation any reserve or special deposit requirement, any
restraint, guideline or policy not having the force of law with which
the Lender may comply, shall be reimbursed by the Borrower to the
Agent on behalf of the Lender who shall furnish the Agent with a
statement of the nature and amount of such cost for delivery to the
Borrower. For purposes of this sub-section 6.03(a), the term,
"Lender," shall be deemed to include the head office of the Lender as
well as any other branch of such head office.
13 Page 127 of 194
<PAGE> 128
(b) If the Borrower shall be required to reimburse the Lender under
sub-section 6.03(a) in respect of any law or regulation which comes
into effect after the date of this Agreement, the Borrower shall be
free at any time within thirty (30) days of the effectiveness of the
requirement of such payment to prepay, without penalty, the Advances
as provided in Section 6.05(?), subject to giving the Agent not less
than five (5) Banking Days prior notice thereof.
6.04 Change of Law. Notwithstanding any other provision herein, in the
event that any change in any applicable law, rule or regulation or in
the interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof
shall make it unlawful for the Lender to (i) honor the Commitment or
(ii) maintain the Advances, then the Commitment shall terminate and
the Borrower shall forthwith, or within such longer period as may be
allowed by such law, rule, regulation or interpretation, prepay,
without penalty, the Loan as provided in Section 6.05. Upon the
concurrence of any such change terminating the Commitment or making it
unlawful for the Lender to maintain the Loan as aforesaid, the Lender
shall promptly notify the Agent thereof and shall furnish the Agent
evidence certified by the Lender as to such change for delivery to the
Borrower.
6.05 Adversity Prepayment. (a) If the Borrower shall exercise its right
to prepay the Loan pursuant to Section 6.02 or 6.03, or if the
Borrower shall be required to prepay the Loan pursuant to Section 6.01
or 6.04, the Borrower shall pay such amounts, together with interest
accrued thereon to the date of prepayment (computed on the Substitute
Basis of Borrowing, if applicable, for the time it is in effect)
together with such additional amounts as may be necessary to
compensate the Lender for any costs or losses resulting from such
prepayment. Any such prepayment shall not relieve the Borrower from
paying all other amounts payable under Section 6.01, 6.02, 6.03 or
6.04.
(b) In the event that the Commitment has not yet been advanced and
the Borrower prepays all or a portion of the Loan then outstanding in
accordance with the provisions of Section 6.01, 6.02, 6.03 or 6.04,
the Commitment shall be cancelled.
6.06 Funding Costs. For purposes of Sections 2.02, 3.03, 6.05 and 10.02
the costs and losses of the Lender shall include, but shall not be
limited to, any loss arising from the re-employment of funds at rates
lower than the cost to the Lender of such funds and any related costs.
The Lender shall certify such costs and losses (including a reasonable
description thereof) to the Agent and the Agent shall notify the
Borrower of the amount thereof for the Lender.
6.07 Dollar Transaction. This is an international loan transaction in
which the specification of Dollars is of the essence, and Dollars
shall be the currency of account and of payment in all events. The
payment obligation hereunder shall not be discharged by an amount paid
in another currency whether pursuant to a judgment or otherwise, to
the extent that the amount so paid on prompt conversion to Dollars
under normal banking procedures does not yield the amount of Dollars
due hereunder. In the event that any payment, whether pursuant to a
judgment or otherwise, upon such conversion and transfer does not
result in payment of such amount of Dollars, the Agent and the Lender
shall be entitled to demand immediate payment of, and shall have a
separate cause of action for, the Dollar deficiency in respect of
payments due.
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Article 7. Borrower's Represeentations and Warranties.
The Borrower represents and warrants to the Agent and the Lender as follows:
7.01 Incorporation. The Borrower is a corporation duly organized and
validly existing under the laws of Korea, has its registered head
office at the address set forth above, has full legal right, power and
authority to execute, deliver and perform its obligations under this
Agreement, the Letter Agreements, the Note and all other documents
executed pursuant hereto, to perform the terms and conditions hereof
and thereof and to own its properties and carry on its business as it
is presently being conducted and is qualified to do business and is in
good standing in each jurisdiction in which it is required to do so.
7.02 Restrictions. There is no constitutional provision, treaty,
convention, statute, law, regulation, decree or similar authority and
no provision of the Borrower's Articles of Incorporation and no
provision of any existing contract, agreement or instrument binding on
the Borrower or affecting its properties which has been or would be
contravened by the execution and delivery of this Agreement, the
Letter Agreements, the Note or any other document or instrument to be
delivered by the Borrower hereunder or by the performance or
observance by the Borrower of any of the terms hereof and thereof.
7.03 Authorizations. All authorizations, approvals, consents and licenses
from all legislative bodies of government, ministries, agencies,
exchange control authorities or other authorities of Korea or the
United States of America or any state thereof, as relevant, in order
for the Borrower (i) to incur the obligations provided for in this
Agreement, the Letter Agreements and the Note, (ii) to execute and
deliver this Agreement, the Letter Agreements, the Note and all other
documents and instruments to be delivered by the Borrower hereunder,
(iii) to perform and observe the terms and provisions hereof and
thereof, (iv) to make all payments hereunder and thereunder in Dollars
and (v) to invest in Maxtor Corporation have been or, by the date of
the first Drawdown, are or will have been duly obtained and are or
will by such date be in full force and effect.
7.04 Legal Actions. No registration, recording or filing is required as a
condition to the legality, validity or enforceability of this
Agreement, the Letter Agreements, the Note or any other documents to
be executed and delivered pursuant to the terms of this Agreement.
7.05 Agreement Binding. This Agreement, the Note and the Letter Agreements
constitute (or will when executed and delivered (in the case of the
Note, for value) constitute) the legal, valid and binding obligations
of the Borrower enforceable in accordance with their respective terms.
The indebtedness and other obligations incurred and to be incurred by
the Borrower under this Agreement, the Letter Agreements and the Note
rank at least pari passu in priority of payment and in all other
respects with all other unsecured indebtedness and obligations of the
Borrower except as separately disclosed to the Agent in writing.
7.06 Other Obligations. The Borrower is not in default under any agreement
to which it is a party or by which it may be bound, a default in
respect of which might have a material adverse effect on the Borrower
or its operations, properties or financial condition.
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<PAGE> 130
7.07 Litigation. No litigation, administrative proceeding or arbitration
is presently pending nor, to the best knowledge of the
Borrower, threatened against it, or any of its properties, which, in
any one case or in the aggregate, might have a material adverse effect
on the Borrower s operations, properties or financial condition or
which would, if successfully prosecuted, prevent the investment by the
Borrower in Maxtor Corporation and there is no competing offer by any
party to purchase or otherwise acquire any shares in Maxtor
Corporation.
7.08 Compliance with Law. The Borrower is in compliance with all
applicable laws of Korea including without limitation the tax laws
thereof.
7.09 Accuracy of Information. All information relating to the Borrower
heretofore delivered to the Agent or the Lender in connection with
this Agreement is complete and correct in all material respects.
7.10 Financial Condition. The balance sheet of the Borrower as of December
31, 1992, together with statements of income and expense and changes
in financial position for the fiscal year then ended, certified by the
chief financial officer of the Borrower, heretofore delivered to the
Agent, fairly present the financial condition of the Borrower and the
results of its operations and transactions, and have been prepared in
accordance with generally accepted accounting principles consistently
applied by the Borrower throughout the periods involved. There are no
liabilities, direct or indirect, fixed or contingent, of the Borrower
as of the dates of such baoance sheets which are not reflected therein
or in the notes thereto.
7.11 Taxes. The Borrower has filed or caused to be filed all tax returns
which to the knowledge of the Borrower are required to be filed and
has paid all taxes shown to be due and payable on said returns or on
any assessment made against it or any of its property and all other
taxes, assessments, fees, liabilities or other charges imposed on it
or any of its property by any governmental authority, except for any
taxes, assessments, fees, liabilities or other charges which are being
contested in good faith and for which reserves which are adequate
under generally accepted accounting principles have been established.
7.12 Title to Properties; Possession Under Leases. The Borrower has good
and marketable title to, or valid leasehold interests in, all
properties and assets reflected on the balance sheet of the Borrower
as of December 31, 1992, referred to in Section 7.10, except for such
immaterial properties and assets as have been disposed of in the
ordinary course of business and except for minor defects in title that
do not interfere with the ability of the Borrower to conduct its
business as now conducted.
Article 8. Covenants.
8.01 Financial Statements. Throughout the life of this Agreement, the
Borrower shall provide the Agent (in sufficient copies for the Agent
and the Lender) with copies of its unaudited financial statements for
the first half of each fiscal year (if available) and its audited
financial statements (consolidated, if available) for each fiscal year
as they are available but in any event not later than ninety (90) days
after the close of the first six month period of each fiscal period
covered by an unaudited financial statement and not later than one
hundred twenty (120) days after the close of each fiscal period
covered by an audited financial statement
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<PAGE> 131
(consolidated, if available), and such other information respecting the
financial condition and operations of the Borrower as the Agent or the
Lender may from time to time reasonably request. Each financial
statement provided hereunder shall have been prepared in accordance
with generally accepted accounting principles consistently applied in
Korea and be accompanied by a certificate executed by a duly
authorized officer of the Borrower stating (i) that as of the date of
such financial statement the Borrower is in full compliance with all
terms and conditions hereof, including without limitation all
financial covenants, and of any document executed pursuant hereto and
(ii) that as of such date no Event of Default and no event which, with
the giving of notice or the passage of time or both, would constitute
an Event of Default has occurred and is continuing.
8.02 Rights; Compliance with Law. The Borrower shall preserve and maintain
its existence under applicable law and all of its rights, privileges
and franchises, not materially alter the nature of its business,
comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, and shall pay
and discharge all applicable taxes, assessments and governmental
charges upon it or upon its properties, promptly when due and, in any
event, prior to the date on which penalties may become attached
thereto.
8.03 Representations & Warranties. The Borrower shall ensure that the
representations and warranties contained in this Agreement remain at
all times true and accurate.
8.04 Litigation. The Borrower shall promptly give notice to the Agent of
any litigation and of any proceedings by or before any governmental
agency and of all disputes concerning the Borrower, or any of its
assets, any of which, in any one case or in the aggregate, might have
a material adverse effect on the operations or financial condition of
the Borrower.
8.05 Inspection. Upon request of the Agent, the Borrower shall give any
representative of the Agent access, during normal business hours, to,
and permit the Agent to visit and inspect any of the properties of the
Borrower and to examine or make extracts from, such of its books,
records and documents as may be pertinent to the ability of the
Borrower to perform hereunder or under the documents executed pursuant
hereto.
8.06 Notice. As soon as possible but in any event within ten (10) days
after occurrence, the Borrower shall give written notice to the Agent
of any Event of Default or any event which, with the giving of notice
or passage of time or both, would become an Event of Default and of
any other matter which has resulted or might result in a material
adverse change in the Borrower's operations or financial condition
(each such notice setting forth the nature of such event and the steps
being taken by the Borrower to remedy such event).
8.07 Merger; Disposition of Assets. The Borrower shall not, without a
prior written consent of the Lender, reorganize or consolidate with or
merge into any other Person, nor dispose of (whether in one
transaction or in a series of transactions) all or any substantial
part of its property, whether now owned or hereafter acquired.
8.08 Authorizations. The Borrower shall promptly obtain all foreign
exchange control authorizations, if any, and all such other
governmental approvals and filings as shall now or
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<PAGE> 132
hereafter be necessary under applicable laws and regulations for the
Borrower to make and perform this Agreement and to borrow hereunder
and promptly to furnish copies thereof to the Lender, and promptly to
execute, acknowledge, deliver, file, notarize and register at its own
expense all such additional agreements, instruments and documents, and
perform such other acts, as the Lender deems desirable to effectuate
the purposes of this Agreement.
8.09 Further Documents. The Borrower shall execute all such other
documents and instruments and do all such other acts and things as the
Agent or the Lender may reasonably require to carry out the
transactions contemplated herein or in the documents required to be
delivered hereunder.
Article 9. Conditions Precedent.
9.01 Initial Drawdown. The obligation of the Lender to make available its
Advance in respect of the initial Drawdown is subject to fulfillment,
as determined solely by the Agent and its counsel, of the following
conditions precedent on the date of the initial Drawdown:
(a) Authorizations. The Agent shall have received in form and
substance satisfactory to it and to its counsel:
(i) The Articles of Incorporation of and the Commercial Registry
extracts regarding the Borrower;
(ii) The most recent financial statements of the Borrower;
(iii) A duly authenticated copy of the minutes of the Board of
Directors' meeting of the Borrower at which resolutions were
adopted authorizing the execution, delivery and performance of
this Agreement, the Letter Agreements, the Note and all other
agreements and documents to be executed pursuant hereto,
including the incurring of the debt obligations hereunder and
thereunder upon the terms hereof and thereof and authorizing
the person(s) who signed, or will sign, this Agreement, the
Letter Agreements, the Note and all other documents to be
executed pursuant hereto on the Borrower's behalf to do so,
and any power of attorney executed in connection therewith;
(iv) A certificate as to the specimen signature(s) of the person(s)
authorized to execute this Agreement, the Note and all other
documents to be provided hereunder on the Borrower's behalf;
(v) The seal certificates of the representative directors of the
Borrower and the certificates as to the seal impressions of
the directors affixed on the minutes of the Board of
Directors' meeting referred to in item (iii) above;
(b) Government Authorizations. The Agent shall have received, in
form and substance satisfactory to the Agent and its counsel,
certified copies and true and correct English-language translations of
each approval of any government authority of Korea or of the United
States of America or any state thereof, as relevant, necessary or
advisable in connection with the execution, delivery and performance
of this Agreement, the Note and any other document or instrument
required hereunder or thereunder and for the Borrower's
18 Page 132 of 194
<PAGE> 133
investment in Maxtor Corporation, including, without limitation, (i)
the foreign exchange approval of the Borrower's designated Class A
foreign exchange trading bank in Korea required for the execution of
this Agreement and (ii) the approval of the Bank of Korea for the
overseas investment by the Borrower.
(c) Note. The Agent shall have received the executed Note as
required by Section 5.01 of this Agreement.
(d) Opinions. The Agent shall have received (i) the opinion of
Milbank, Tweed, Hadley & McCloy, the special New York counsel to the
Agent and the Lender and (ii) the opinion of Messrs. Kim & Chang,
special Korean counsel to the Agent and the Lender, each in form and
substance satisfactory to the Agent.
(e) Appointment of Process Agents. The Agent shall have received
written confirmation from the agents for service of process appointed
by the Borrower pursuant to Section 12.08 of this Agreement
irrevocably accepting such appointment.
(f) Notice of Drawdown. The Agent shall have received the timely
written notice of the Borrower as specified in Section 2.02(b),
substantially in the form of Exhibit B attached hereto.
(g) Drawdown Certificate. The Agent shall have received on or prior
to the date of Drawdown a certificate of the Borrower, dated the date
of the initial Drawdown, substantially in the form of Exhibit C
attached hereto.
(h) Other Documents. The Agent shall have received such other
approvals, opinions and documents as it may reasonably request.
9.02 Subsequent Drawdowns. The obligation of the Lender to make available
its Advance in respect of each Drawdown after the initial Drawdown is
subject to the fulfillment, as determined solely by the Agent and its
counsel, of the following conditions precedent on the date of such
Drawdown:
(a) All documents and instruments delivered to the Agent pursuant
to Section 9.01 shall continue to be in full force and effect;
and
(b) The Agent shall have received (i) the notice of Drawdown as
specified in Section 2.02, (ii) a Drawdown certificate, dated
the date of such Drawdown, substantially in the form of
Exhibit C hereto, and (iii) such other documents as the Agent
or the Lender may reasonably request.
9.03 Other Conditions Precedent. The obligations of the Lender to make its
Advances in respect of each Drawdown are also subject to the condition
precedent that no Event of Default and no event which, with the
passage of time or the giving of notice or both, would become an Event
of Default shall have occurred and be continuing, and the
representations and warranties made herein shall have remained and
then be true and correct as if also made on the date of such Drawdown
and all legal matters in connection with this Agreement shall be
satisfactory to the Agent and its counsel.
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<PAGE> 134
Article 10. Events of Default.
10.01 Event of Default. Each of the following events and occurrences shall
constitute an Event of Default under this Agreement:
(a) the Borrower fails to make payment in full of any amount which
it is obliged to pay under this Agreement, the Letter Agreements
and/or the Note on the date when such amount is due and payable;
(b) any representation or warranty made or deemed restated by the
Borrower in this Agreement or the Letter Agreements shall be shown to
have been incorrect or misleading in any material respect as of its
date, or any certificate or opinion furnished by the Borrower under
this Agreement proves to have been false or misleading as of its date
in any material respect;
(c) the Borrower fails to perform or violates any other provision
of this Agreement or the Letter Agreements, and such failure or
violation is not remediable or, if remediable, continues unremedied
for a period of ten (10) calendar days from the date the Lender
transmits notice to the Borrower with respect thereto;
(d) any governmental registration or approval granted or required
in connection with this Agreement, the Letter Agreements or the Note
or for the Borrower's investment in Maxtor Corporation is not
obtained, expires or is terminated, revoked, withdrawn or withheld, or
is modified or amended in any manner prejudicing the interests of the
Lender hereunder;
(e) it becomes unlawful for the Borrower to perform any obligation
hereunder, under the Letter Agreements or under the Note or for the
investment in Maxtor Corporation to be consummated;
(f) the Borrower shall fail to pay any money due under any other
agreement (whether or not written) or document evidencing, securing,
guaranteeing or otherwise relating to indebtedness or monetary
obligations of the Borrower or there occurs any other event of default
or other event which, with the giving of notice or the passage of
time, or both, would constitute a default or an event of default under
any such agreement or document and the effect of which is to
accelerate or to permit acceleration of the maturity of such
indebtedness or obligation;
(g) any judgment or decree for money damages or for a fine or
penalty in excess of One Million Dollars (US$1,000,000) or its
equivalent in any other currency is entered against the Borrower and
is not paid, discharged or fully bonded within thirty (30) days;
(h) the whole or a substantial part of the business or assets of
the Borrower shall, without the prior written consent of the Agent, be
confiscated for any reason or sold, transferred or otherwise disposed
of;
(i) the Borrower shall, without the prior written consent of the
Agent (which consent shall not unreasonably be withheld), voluntarily
or involuntarily merge or consolidate with any other entity;
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<PAGE> 135
(j) Korea or any competent authority thereof declares any
moratorium on the payment of its indebtedness or the indebtedness of
any governmental agency or authority thereof or by juridical entities
domiciled or resident in Korea or Korea ceases to be a member in good
standing of the International Monetary Fund and the International Bank
for Reconstruction and Development; the international monetary
reserves of Korea become subject to any mortgage, lien, security
interest, pledge, charge, or other encumbrance or preferred
arrangement; or Korea segregates all or a portion of its foreign
exchange assets or earnings for the benefit of any creditor or class
of creditors;
(k) the Borrower becomes insolvent or unable to pay its debts when
due or the Borrower commits or permits any act of bankruptcy, which
term shall include (i) filing a petition in any bankruptcy,
reorganization, compulsory composition, winding-up or liquidation
proceeding or other proceeding analogous in purpose or effect, (ii)
failing to have any such petition filed by any other party discharged
within thirty (30) days, (iii) application for or consent to the
appointment of a receiver or trustee for the bankruptcy,
reorganization, compulsory composition, winding-up or liquidation of
the Borrower, (iv) making an assignment for the benefit of creditors,
(v) the admission in writing by the Borrower of its inability to pay
its debts, (vi) the entry of any court order or judgment confirming
the bankruptcy or insolvency of the Borrower or approving any
reorganization, compulsory composition, winding-up or liquidation of
the Borrower or a substantial portion of its respective assets or
(vii) any meeting of the Borrower is convened or any other preparatory
steps are taken for the purposes of considering an application for an
administration order in relation to the Borrower or such an
administration order is made by a court; or
(l) any circumstances occur which in the opinion of the Agent
provide reasonable grounds for belief that the Borrower may not (or
may not be able to) perform its obligations hereunder, under the
Letter Agreements or under the Note.
10.02 Consequences of Default. (a) Upon the happening of any of the
foregoing Events of Default and at the option of the Lender, (i) the
obligation of the Agent and/or the Lender to permit Drawdowns shall
immediately cease; (ii) the Agent may and, upon the written
instruction of the Lender, shall declare, by notice to the Borrower,
the principal of and accrued interest on the Loan and all other
amounts then owed by the Borrower to the Agent and the Lender
immediately due and payable;provided, that upon the happening of any
event specified in Section 10.01(k), the principal of and accrued
interest in the Loan and all other amounts then owed by the Borrower
to the Agent and the Lender shall become immediately due and payable
and the obligations of the Agent and/or the Lender to permit Drawdowns
shall immediately cease without any notice to the Borrower; (iii) the
Agent may take any other action, exercise any other right or pursue
any other remedy conferred upon the Agent and/or the Lender by this
Agreement or the Note or by any applicable law or regulation or
otherwise as a consequence of such Event of Default.
(b) The Borrower shall also pay to the Lender on demand such
additional amounts as may be necessary to compensate the Lender for
any costs or losses resulting from such Event of Default. No waiver
of any Event of Default shall constitute a waiver of any other or any
succeeding Event of Default except to the extent provided in such
waiver.
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Article 11. Agent and Lender.
11.01 Appointment. The Lender hereby appoints the Agent to act as its agent
as herein specified and irrevocably authorizes the Agent to take such
action on its behalf under the provisions of this Agreement and any
other agreements and instruments referred to herein and to exercise
such powers hereunder and thereunder as are specifically delegated to
the Agent and such powers as are reasonably incidental thereto. In
performing its functions and duties hereunder the Agent does not
assume and shall not be deemed to have assumed any obligation towards
or relationship of agency or trust with or for the Borrower.
11.02 Decision of Lender. The Agent shall to the extent practicable under
the circumstances consult with the Lender prior to taking action on
behalf of the Lender under this Agreement. The Agent shall not take
any action contrary to the written direction of the Lender and shall
take any lawful action in accordance with the provisions of this
Agreement prescribed in a written direction of the Lender. The Agent
may decline to take any action except upon the written direction of
the Lender and the Agent may obtain a ratification by the Lender of
any action taken by it under this Agreement. In each case the Agent
shall have no liability to the Borrower or the Lender for any action
taken by it upon the direction of the Lender or if ratified by the
Lender, nor shall the Agent have any liability for any failure to act
(except as contemplated in Section 11.07) unless the Agent has been
instructed to act by the Lender. Notwithstanding anything herein to
the contrary, the Agent need not take any action on behalf of the
Lender unless and until it is indemnified to its satisfaction for any
and all consequences of such action.
11.03 Reimbursement for Expenses. The Lender agrees to reimburse the Agent
for its own account for all expenses incurred by the Agent for which
the Agent is entitled to reimbursement from the Borrower pursuant to
Section 3.07, in the event the Borrower fails to make such
reimbursement.
11.04 Liability and Credit Appraisal. Neither the Agent nor any of its
officers, directors, employees or agents shall be liable for any
action taken or omitted by it or them hereunder, or in connection
herewith, except for its or their gross negligence or willful
misconduct. The Agent shall not be responsible for any recitals,
statements, representations or warranties herein or in any information
supplied by or on behalf of the Borrower or for the execution,
effectiveness, genuineness, validity or enforceability of the Loan,
this Agreement, the Letter Agreements, the Note or any other document
executed in connection herewith, or be required (except upon the
written direction of the Lender) to make any inquiry concerning the
performance or observance by the Borrower of any of the terms,
provisions or conditions of this Agreement. The Lender represents and
warrants to the Agent that it has made an independent credit
investigation and appraisal of the Borrower on the basis of such
documents and information as it has deemed appropriate and that it has
entered into this Agreement on the basis of such independent
appraisal, and the Lender represents and warrants that it shall
continue to make its own credit appraisal. The Lender agrees to
indemnify and hold the Agent harmless from and against any and all
liabilities, damages, penalties, judgments, suits, expenses and other
costs of any kind or nature whatsoever imposed on, incurred by or
asserted against the Agent in respect of their obligations hereunder,
except for its gross negligence or willful misconduct.
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<PAGE> 137
11.05 Reliance by Agent. The Agent shall be entitled to rely upon any
communication or document believed by it to be genuine and correct and
to have been signed, sent or made by the proper person or persons and
to act upon the advice of legal counsel and other experts selected by
it concerning all matters pertaining to this Agreement and its duties
hereunder, and shall not be liable to any of the other parties hereto
for any of the consequences of such reliance. The Agent may rely for
the purposes of the giving of notice or the disbursement of funds on
the name and address of the Lender contained herein or as notified to
the Agent pursuant to Section 12.11.
11.06 Agent; Other Banking. The Agent and its affiliates may, without
liability to account, engage in any kind of banking, trust or other
business with the Borrower as if it were not the Agent or affiliate.
In addition, the Agent and each of its affiliates shall be entitled to
receive from the Borrower its portion of any fee in connection with
this transaction without any liability to account therefor to the
Lender except as the Agent and its affiliates may have expressly
agreed.
11.07 Payments, Notices and Determinations by the Agent. (a) The Agent
shall distribute to the Lender in like funds upon receipt the Lender's
share of all amounts of principal and interest, and to the Lender its
share of all fees and all other amounts received by the Agent from the
Borrower hereunder on behalf of the Lender. If at any time the Agent
makes available to the Lender amounts due from the Borrower hereunder,
which the Borrower has failed to make available to the Agent, the
Lender shall on request forthwith refund such amounts to the Agent
together with interest thereon at the rate which is notified by the
Agent to the Lender as representing the cost to the Agent of funding
(whether in Dollars or any other currency) such amounts.
(b) The Agent shall promptly notify the Lender of all notices
served by the Borrower. Determinations of Interest Rates, Interest
Periods, Interest Determination Dates, funding costs and amounts of
interest, default interest and other sums due hereunder contained in
notices from the Agent shall be conclusive and binding on the Borrower
and the Lender, absent manifest error in computation or transmission.
11.08 Successor Agent. Subject to the appointment and acceptance of a
successor agent as provided below, the Agent may resign at any time by
giving written notice thereof to the Lender and the Borrower, and the
Agent may be removed at any time with or without cause by the Lender.
Upon any such resignation or removal, the Lender shall have the right
to appoint a successor agent. If no successor agent shall have been
so appointed by the Lender and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving of notice of
resignation or the Lender's removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lender, appoint a successor
agent, which shall be a bank which has an office in Hong Kong or in
Seoul, Korea. Upon the acceptance of any appointment as Agent
hereunder by a successor agent, such successor agent 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 its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article 11 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 the Agent hereunder. Notwithstanding the above, if all
the parties
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<PAGE> 138
hereto agree in writing, the Agent may assign all of its rights and
obligations hereunder without having to comply with the above
provisions of this Section 11.08.
Article 12. Miscellaneous.
12.01 Term. The term of this Agreement shall commence on the date first set
forth above and shall end on the Repayment Date hereunder or, if
later, upon payment in full of all principal, interest and other sums
payable by the Borrower hereunder or under the Note. The
representations and warranties of the Borrower set forth herein shall
survive the making of the Loan and the indemnities of the Borrower
contained herein shall survive repayment of the Loan.
12.02 Entire Agreement. This Agreement and the documents referred to herein
constitute the entire obligation of the parties hereto with respect to
the subject matter hereof and shall supersede any prior expressions of
intent or understandings with respect to this transaction. Any
amendment hereto shall be in writing, signed by or on behalf of the
parties hereto.
12.03 Waiver; Cumulative Rights. The failure or delay of the Agent or the
Lender to require performance by the Borrower of any provision of this
Agreement shall not affect its right to require performance of such
provision unless and until such performance has been waived in writing
by the Agent in accordance with the terms hereof. Each and every
right granted to the Agent or the Lender hereunder or under any other
document or instrument delivered hereunder or in connection herewith,
or allowed to it at law shall be cumulative and may be exercised in
part or in whole from time to time.
12.04 Assignment. (a) This Agreement shall be binding upon and shall be
enforceable by the Borrower, the Agent and the Lender and their
respective heirs, successors and assigns, except that the Borrower
shall have no right to assign or transfer its rights or obligations
hereunder. An assignment by the Lender of all or a part of its rights
and obligations hereunder may be made by giving to the Agent and the
Borrower a notice of assignment, or by giving to the Agent a transfer
certificate substantially in the form of Exhibit D hereto. Upon any
transfer, assignment or subparticipation by the Lender, the
transferee, assignee or subparticipant shall be entitled, to the
extent of the interest transferred, to the benefit of the indemnities,
tax reimbursements and rights of set-off of a Lender pursuant to the
provisions of this Agreement as fully as if a party hereto. The acts
of the Lender or the failure of the Lender to act hereunder shall in
all circumstances be conclusive and binding on any transferee,
assignee or subparticipant of the Lender's interest hereunder.
(b) The Agent or the Lender may disclose to any potential
assignee, transferee or sub-participant of all or any part of its
rights or obligations under this Agreement or to any Person who may
otherwise enter into contractual relations with the Agent or the
Lender in relation to this Agreement, such information about the
Borrower and/or its related entities as the Agent or the Lender thinks
fit.
12.05 Indemnification. The Borrower agrees to indemnify and hold harmless
the Agent and the Lender from and against any and all losses, claims,
damages and liabilities caused by any
24 Page 138 of 194
<PAGE> 139
untrue or misleading statements made to the Agent or the Lender or
caused by any omission of a material fact necessary to make the
statements so made not misleading.
12.06 Governing Law. This Agreement and the Note shall be governed by and
construed in accordance with the laws of the State of New York.
12.07 Waiver of Sovereign Immunity. The Borrower represents and warrants
that this Agreement, the Letter Agreements and the Note are commercial
rather than public or governmental acts and that the Borrower is not
entitled to claim immunity from legal proceedings with respect to
itself or any of its property on the grounds of sovereignty or
otherwise under any law or in any jurisdiction where an action may be
brought for the enforcement of any of the obligations arising under or
relating to this Agreement, the Letter Agreements and the Note. To
the extent that the Borrower or any of its properties has or hereafter
may acquire any right to immunity from set-off, legal proceedings,
attachment prior to judgment, other attachment or execution of
judgment on the grounds of sovereignty or otherwise, the Borrower
hereby irrevocably waives such rights to immunity in respect of its
obligations arising under or relating to this Agreement and the Note.
12.08 Jurisdiction. (a) The Borrower irrevocably consents that any legal
action or proceeding against it or any of its property with respect to
this Agreement, the Letter Agreements and the Note may be brought in
any court of the State of New York or any Federal court of the United
States of America located in the City and State of New York, United
States of America, or in any court located in Seoul, Korea, as the
Agent or the Lender may elect, and by execution and delivery of this
Agreement the Borrower hereby irrevocably submits to and accepts with
regard to any such action or proceeding for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Borrower hereby irrevocably designates,
appoints and empowers the Representative Office of the Lender
currently at 300 Sylvan Ave., Englewood Cliffs, N.J. 07632, U.S.A. for
the time being as its agent to receive for and on its behalf service
of process in the State of New York in any legal action or proceeding
with respect to this Agreement and the Note. It is understood that a
copy of any such process served on such agent shall be promptly
forwarded by registered airmail by the person commencing such
proceeding to the Borrower at its address set forth in Section 12.11,
but the failure of the Borrower to receive such copy shall not affect
in any way the service of process as aforesaid. The Borrower further
irrevocably consents to service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified airmail, postage prepaid,
to the Borrower at its address set forth in Section 12.11. Nothing
herein shall affect the right of the Agent to serve process in any
other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Borrower in any other jurisdiction. The
Borrower further agrees that, to the extent permitted by law, final
judgment against it in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdiction within or
outside the State of New York by suit on the judgment, a certified or
exemplified copy of which shall be conclusive evidence of the fact and
of the amount of its indebtedness.
(b) The Borrower hereby waives any right it may have under the
laws of any jurisdiction to commence by publication any legal action
or proceeding with respect to this Agreement or any document or
agreement executed pursuant hereto. The Borrower hereby irrevocably
25 Page 139 of 194
<PAGE> 140
waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to any suit, action or proceeding
arising out of or relating to this Agreement, the Letter Agreements
and the Note being brought in the State of New York, and hereby
further irrevocably waives any claim that any such suit, action or
proceeding brought in a court in the State of New York has been
brought in an inconvenient forum.
12.09 Waiver of Jury Trial. EACH OF THE BORROWER, THE AGENT AND THE LENDER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.10 Set-Offs. To the extent permitted by law, the Lender shall have the
right to apply amounts on deposit or account with the Lender, at its
head office or at any branch, subsidiary or affiliate of its head
office in reduction of amounts past due hereunder and under the Note.
12.11 Notices. Any communication, demand or notice to be given hereunder
shall be given in writing by hand or sent by mail, facsimile
transmission or telex as follows:
To the Borrower: HYUNDAI HEAVY INDUSTRIES CO., LTD.
140-2, Kye-dong
Chongro-ku, Seoul
Korea
Attention: Finance Department
FACSIMILE: (822) 746-4662
TELEPHONE: (822) 746-4555
TELEX: K28361 HDYARD
To the Agent
and Lender: AMERICAN EXPRESS BANK LTD.
Singapore Branch
16 Collyer Quay
Raffles Place
Singapore 0104
Attention: Mr. Barat Parshar
Senior Director
FACSIMILE: (65) 534-3022
TELEPHONE: (65) 538-4833
TELEX: RS 21172
or to each party, at such other address or number as such party may
designate by notice in writing to the other party. Notices delivered
by hand shall be deemed received upon delivery; notices sent by
postage prepaid registered airmail shall be deemed received seven (7)
days after sending and notice sent by facsimile or telex shall be
deemed received at
26 Page 140 of 194
<PAGE> 141
the time of the dispatch thereof, answerback received or appropriate
evidence of receipt confirmed.
All notices, demands, requests, statements or other communications to
be made or given by the Borrower hereunder shall be in the English
language. Any documents required to be delivered pursuant to this
Agreement which are not in the English language must be accompanied by
a certified English language translation thereof and in the event of
any conflict between the original of the document and the English
language translation thereof, the English language translation shall
prevail.
12.12 Severability. If any one or more of the provisions contained
in this Agreement or any document executed in connection
herewith shall be invalid, illegal or unenforceable in any
respect under any applicable law, the validity, legality and
enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby.
12.13 Counterparts. This Agreement may be signed in any number of
counterparts. Any single counterpart or a set of counterparts
signed, in either case, by all the parties hereto shall
constitute a full and original agreement for all purposes.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized signatories as of
the day and year first written above.
BORROWER: HYUNDAI HEAVY INDUSTRIES CO., LTD.
By /s/ Yeong Ki Lee
--------------------------------------
Name: YEONG KI LEE
Title:
AGENT: AMERICAN EXPRESS BANK LTD.
By /s/ S.D. Lee
--------------------------------------
Name: S.D. LEE
Title: Senior Director
LENDER: AMERICAN EXPRESS BANK LTD.
By /s/ S.D. Lee
--------------------------------------
Name: S.D. LEE
Title: Senior Director
27 Page 141 of 194
<PAGE> 142
Exhibit A
NOTE
Date: (Date of Initial Drawdown)
Amount: US$37,499,000
FOR VALUE RECEIVED, Hyundai Heavy Industries Co., Ltd., a corporation organized
and existing under the laws of the Republic of Korea (the "Borrower"),
unconditionally promises to pay to the order of American Express Bank Ltd. as
the agent of the Lender (including its successors or assigns, the "Agent")
under the Agreement referred to below to the account of the Agent in favor of
the Lender with [ ] at [ ] New
York, New York, U.S.A. (account number ) the principal sum of up to
Thirty-Seven Million Four Hundred Ninety Nine Thousand United States Dollars
(US$37,499,000) or such lesser amount as may be advanced by the Lender and
endorsed below on [ ], 1999, pursuant to the terms of a loan
agreement dated as of __________, 1994 among the Borrower, the lender named
therein, and American Express Bank Ltd. as Agent (the "Agreement"), to which
reference is hereby made and which is incorporated herein by reference. Terms
not defined herein have the meanings set forth in the Agreement.
The Borrower further promises to pay interest on the unpaid balance hereof
from the date hereof until paid in full at the rates and in the manner and
calculated in accordance with the provisions of the Agreement.
The principal of and interest on this Note shall be payable in lawful money of
the United States of America (same day funds or such other Dollar funds as may
be determined by the Lender to be customary for the settlement of international
banking transactions).
In case an Event of Default as defined in the Agreement shall occur, the
principal of and accrued interest on this Note may be declared or become due
and payable in the manner and with the effect provided in the Agreement,
presentment, demand, protest or notice of any kind being expressly waived by
the Borrower.
The Borrower hereby authorizes and empowers the Agent to acknowledge on its
behalf by endorsement below the receipt by the Borrower of each Drawdown.
28 Page 142 of 194
<PAGE> 143
This Note shall be governed by and construed in accordance with the laws of the
State of New York.
HYUNDAI HEAVY INDUSTRIES CO., LTD.
By ________________________________
Name:
Title:
<TABLE>
<CAPTION>
======================================================================================
Principal of Acknowledgment of
Date of Drawdown Amount of Drawdown Note to Date Borrower
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
======================================================================================
</TABLE>
29 Page 143 of 194
<PAGE> 144
Exhibit B
(Letterhead of the Borrower)
Date:
To: American Express Bank Ltd.
16 Collyer Quay
Raffles Place
Singapore 0104
as Agent for the Lender named in
the Agreement referred to below
Notice of Drawdown
Gentlemen:
Hyundai Heavy Industries Co., Ltd. (the "Borrower") hereby gives
notice, in accordance with Section 2.02 of the loan agreement dated as of
___________________, 1994 (the "Agreements"), of the Borrower's intent to draw
down thereunder and requests that a Drawdown be made on _________________, 1994
in the amount of __________________________ Dollars. All sums advanced to the
Borrower shall be transferred to account no._________________ at ______________
________________________________________________________ standing in the name of
___________________________________________.
The Borrower hereby certifies to you that as of the date of this
notice no Event of Default, and no event which with the giving of notice or the
passing of time, or both, would constitute an Event of Default, has occurred,
that the representations and warranties contained in the Agreement remain true
and correct as of the date of this notice, and that all applicable conditions
precedent specified in Sections *(9.01) (9.02) and 9.03 of the Agreement have
been satisfied.
The terms used herein have the meanings ascribed to them in the
Agreement.
Hyundai Heavy Industries Co., Ltd.
By ___________________________________
Name:
Title:
* delete as appropriate
30 Page 144 of 194
<PAGE> 145
Exhibit C
(Letterhead of the Borrower)
Date:
American Express Bank Ltd.
16 Collyer Quay
Raffles Place
Singapore 0104
as Agent for the Lender named in
the Agreement referred to below
Drawdown Certificate
Gentlemen:
Hyundai Heavy Industries Co., Ltd. (the "Borrower") does hereby certify that:
1. as of the date hereof no event has occurred which constitutes or which with
the giving of notice or the passing of time, or both, would constitute, an
Event of Default under the loan agreement (the "Agreement") dated as of
_______________, 1994 among the Borrower, the Lender, and American Express
Bank Ltd. as Agent;
2. all the representations and warranties of the Borrower contained in the
Agreement remain true and correct as of the date hereof;
3. all of the covenants of the Borrower set forth in the Agreement have been
fully met and performed as of the date hereof; and
4. all of the conditions precedent for this Drawdown required under the
Agreement have been met as of the date hereof and all documents heretofore
delivered as conditions precedent continue in full force and effect.
IN WITNESS WHEREOF, Hyundai Heavy Industries Co., Ltd. has executed
this certificate this _______ day of _____________________, 1994.
Hyundai Heavy Industries Co., Ltd.
By ________________________________
Name:
Title:
31 Page 145 of 194
<PAGE> 146
Exhibit D
To: American Express Bank Ltd.
16 Collyer Quay
Raffles Place
Singapore 0104
TRANSFER CERTIFICATE
relating to the Loan Agreement (the "Loan Agreement") dated [ ], 1994
whereby a loan facility of US$37,499,000 was made available to Hyundai Heavy
Industries Co., Ltd. (the "Borrower") by American Express Bank Ltd. on whose
behalf you (the "Agent") act as agent in connection therewith.
1. [Transferor Lender] (the "Lender") confirms the accuracy of the
summary of its participation in the Loan Agreement set out in the Schedule
below and requests [Transferee] (the "Transferee") to accept and procure the
transfer to the Transferee of [ ]% of such participation in the principal
amount of US$[ ] by countersigning and delivering this Transfer
Certificate to the Agent at its address for the service of notices specified in
the Loan Agreement.
2. The Transferee hereby requests the Agent to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the purpose of
Section 12.04 of the Loan Agreement so as to take effect in accordance with the
terms thereof on [date of transfer] [or, if later, the day falling 3 Banking
Days after that on which the Agent receives this Transfer Certificate] (the
"Date of Transfer").
3. The Transferee confirms that it has received a copy of the Loan
Agreement together with such other information as it has required in connection
with this transaction and that it has not relied and will not hereafter rely on
the Lender to check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any such information and
further agrees that it has not relied and will not rely on the Lender to assess
or keep under review on its behalf the financial condition, creditworthiness,
affairs, status or nature of the Borrower.
4. The Transferee hereby undertakes to the Lender and each of the other
parties to the Loan Agreement that it will perform in accordance with their
terms all those obligations which by the terms of the Loan Agreement will be
assumed by it after delivery of this Transfer Certificate to the Agent with
effect from the Date of Transfer.
5. The Lender makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness, adequacy
or enforceability of the Loan Agreement or any document relating thereto and
assumes no responsibility for the financial condition of the Borrower or for
the performance and observance by the Borrower of any of its obligations under
the Loan Agreement or any document relating thereto and any and all such
conditions and warranties, whether express or implied by law or otherwise, are
hereby excluded.
6. As from the Date of Transfer, any payment shall be made available to
the Transferee to the Transferee's account no. [ ] with [ ].
32 Page 146 of 194
<PAGE> 147
7. The Lender hereby gives notice that nothing herein or in the Loan
Agreement (or any document relating thereto) shall oblige the Lender to (i)
accept a re-transfer from the Transferee of the whole or any part of its
rights, benefits and/or obligations under the Loan Agreement transferred
pursuant hereto or (ii) support any losses directly or indirectly sustained or
incurred by the Transferee for any reason whatsoever including, without
limitation, the non-performance by the Borrower or any other party to the Loan
Agreement (or any document relating thereto) of its obligations under any such
document. The Transferee hereby acknowledges the absence of any such
obligation as is referred to in (i) or (ii) above.
8. This Transfer Certificate and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with the
laws of the State of New York.
[Transferor Lender] [Transferee]
By: By:
----------------------------------
Date: Lending Office:
----------------------
Address:
-----------------------------
Attention:
---------------------------
Facsimile No.:
-----------------------
Telex No.:
---------------------------
Date:
--------------------------------
33 Page 147 of 194
<PAGE> 148
The Schedule
<TABLE>
<S> <C> <C>
Commitment Drawn Portion Undrawn Portion
---------- ------------- ---------------
</TABLE>
34 Page 148 of 194
<PAGE> 149
Exhibit 4
LOAN AGREEMENT
US$37,499,000
HYUNDAI CORPORATION
- BORROWER -
AMERICAN EXPRESS BANK LTD.
- LENDER -
AMERICAN EXPRESS BANK LTD.
- AGENT -
JANUARY 28, 1994
1 Page 149 of 194
<PAGE> 150
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Page
------- ----
<S> <C> <C>
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.01 Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.02 Availability Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.03 Banking Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.04 Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.05 Dollars or US$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.06 Drawdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.07 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.08 Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.09 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.10 Interbank Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.11 Interest Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.12 Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.13 Interest Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.14 Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.15 Letter Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.16 Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.17 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.18 Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.19 Repayment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.20 Headings and References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2. THE LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.01 Purpose and Amount of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.02 Drawdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.03 Cancellation of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. INTEREST, DEFAULT INTEREST AND FEES . . . . . . . . . . . . . . . . . . . . . . . . 8
3.01 Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.02 Interest Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.03 Default Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.04 Front-End Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.05 Agency Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.06 Stamp Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.07 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.08 Maximum Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
2 Page 150 of 194
<PAGE> 151
<TABLE>
<CAPTION>
Article Page
------- ----
<S> <C> <C>
4. PAYMENT AND REPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.01 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.02 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.03 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.04 Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.05 Banking Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.06 Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.07 Loan Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5. SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.01 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.02 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6. YIELD PROTECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.01 Substitute Basis of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.02 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.03 Compliance Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.04 Change of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.05 Adversity Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.06 Funding Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.07 Dollar Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7. BORROWERS REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 14
7.01 Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.02 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.03 Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.04 Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.05 Agreement Binding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.06 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.07 Other Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.09 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.10 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.11 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.13 Title to Properties; Possession Under Leases . . . . . . . . . . . . . . . . . . 16
8. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.01 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.02 Rights; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.03 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.04 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
3 Page 151 of 194
<PAGE> 152
<TABLE>
<CAPTION>
Article Page
------- ----
<S> <C> <C>
8.05 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.06 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.07 Merger; Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.08 Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.09 Further Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.01 Initial Drawdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.02 Subsequent Drawdowns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.03 Other Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.01 Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.02 Consequences of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11. AGENT AND LENDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.02 Decision of Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.03 Reimbursement for Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.04 Liability and Credit Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.05 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.06 Agent; Other Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.07 Payments, Notices and Determinations by the Agent . . . . . . . . . . . . . . . . 23
11.08 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.01 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.02 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.03 Waiver; Cumulative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.04 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.06 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.07 Waiver of Sovereign Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.08 Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.09 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
12.10 Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
12.11 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
12.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
4 Page 152 of 194
<PAGE> 153
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is entered into as of this 28th
day of January, 1994 by and among:
HYUNDAI CORPORATION, a juridical person (chusik hoesa) organized and
existing under the laws of Republic of Korea ("Korea"), with its
registered head office at 140-2, Kye-dong, Chongro-ku, Seoul, Korea
(the "Borrower");
AMERICAN EXPRESS BANK LTD., a bank organized and existing under the
laws of the State of Connecticut acting through its Singapore branch
at 16 Collyer Quay, Raffles Place, Singapore 0104 (the "Lender"); and
AMERICAN EXPRESS BANK LTD., acting through its Singapore branch as
agent for the Lender (referred to herein in such capacity as the
"Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Agent and the Lender to
provide loans in an aggregate principal amount not to exceed Thirty-Seven
Million Four Hundred Ninety Nine Thousand Dollars (US$37,499,000) to finance
the investment in Maxtor Corporation at 211 Riveroaks Parkway, San Jose, CA,
U.S.A.; and
WHEREAS, subject to the terms and conditions of the Agreement, the
Lender has agreed to extend to the Borrower the loans so requested by the
Borrower.
NOW, THEREFORE, it is hereby agreed as follows:
Article 1. Definitions.
In addition to those terms defined above, as used herein the following terms
shall have the meanings set forth below, which shall include both the singular
and plural thereof.
1.01 "Advance" shall mean an advance in same day funds (or such other Dollar
funds as are then customary for the settlement of international loan
transactions) on behalf of the Borrower by the Lender of a Drawdown as
specified in Section 2.02 hereof.
1.02 "Availability Period" shall mean a period beginning the date of this
Agreement and ending three (3) months thereafter.
1.03 "Banking Day" shall mean a day on which banks are open for business in
New York, Singapore, Seoul and Hong Kong and on which deposit
transactions in Dollars are being carried out in the London inter bank
market ("Interbank Market").
1.04 "Commitment" shall mean Thirty-Seven Million Four Hundred Ninety Nine
Thousand Dollars (US$37,499,000) or where the context so requires, the
obligation of the Lender to make the Advances to the Borrower in an
aggregate principal amount not exceeding such amount subject to the
terms and conditions of this Agreement.
5 Page 153 of 194
<PAGE> 154
1.05 "Dollars" or "US$" shall mean dollars in the lawful currency of the
United States of America.
1.06 "Drawdown" shall mean the borrowing by the Borrower of all or any part
of the Commitment.
1.07 "Event of Default" shall have the meaning set forth in Section 10.01.
1.08 "Guarantor" shall mean Hyundai Heavy Industries Co., Ltd., a
corporation (chusik hoesa) organized and existing under the laws of
Korea with its registered head office at 1, Cheonha-dong, Dong-ku,
Ulsan, Kyungsangnam-do, Korea.
1.09 "Guaranty" shall mean the irrevocable and unconditional guaranty by
the Guarantor of the repayment of the Loan, interest thereon and all
other sums becoming due hereunder, or under the Note or the Letter
Agreement to the Agent or the Lender, which guaranty shall be
substantially in the form of Exhibit A hereto and in any event in the
form and substance satisfactory to the Agent and its counsel.
1.10 "Interbank Rate" shall mean, with respect to each Interest Period, the
interest rate which is determined by the Lender in its sole discretion
to be the arithmetic mean of the rates per annum (rounded upwards, if
necessary, to the nearest 1/16%) quoted on the LIBO page (or such
other page as may display London interbank offered rates of major
banks for Dollar deposits) on the Reuter Monitor Money Rates Services
(or if such quote is unavailable on the relevant Interest
Determination Date, the rate quoted by a reference bank in London
selected by the Lender) for the period corresponding to such Interest
Period at approximately 11:00 a.m. (London time) on the Interest
Determination Date prior to the commencement of such Interest Period.
1.11 "Interest Determination Date" shall mean the date which is two (2) days
during which banks are open for business in London prior to the first
day of each Interest Period.
1.12 "Interest Payment Date" shall mean the last day of each Interest
Period.
1.13 "Interest Period" shall mean the period commencing on the date of the
first Drawdown and having a duration of three (3) or six (6) months
(such period to be selected at the Borrower's option) and each period
thereafter commencing on the last day of the then current Interest
Period and having a duration of three (3) or six (6) months (such
period to be selected at the Borrower's option); provided, that with
respect to any Drawdown after the first Drawdown the first Interest
Period with respect to such Drawdown shall commence on the date of
such Drawdown and terminate on the last day of the then current
Interest Period; provided, further, that the last Interest Period
which commences prior to the Repayment Date shall terminate on the
Repayment Date. Notwithstanding the above, "Interest Period" shall
also mean with respect to any amounts in default, such periods as the
Lender shall elect pursuant to Section 3.03(a).
1.14 "Lending Office" shall mean such office or offices of the Lender (or
its successor) as may be from time to time designated as the Lending
Office, the initial Lending Offices being specified in the preamble of
this Agreement.
6 Page 154 of 194
<PAGE> 155
1.15 "Letter Agreements" shall mean the Letter Agreements as defined in
Section 3.05 hereof.
1.16 "Loan" shall mean the outstanding balance from time to time of all
Drawdowns made by the Borrower under this Agreement.
1.17 "Note" shall mean the note payable to the order of the Lender, issued
by the Borrower substantially in the form of Exhibit B hereto and in
any event in form and substance satisfactory to the Agent.
1.18 "Person" shall mean any individual, company, corporation, partnership,
joint venture, trust or unincorporated association or any state or
government or any agency, instrumentality or political subdivision of
any state or government.
1.19 "Repayment Date" shall mean the fifth anniversary date of the date of
the execution of this Agreement.
1.20 In this Agreement:
(a) headings are inserted for convenience only and shall not
affect the construction of this Agreement and, unless
otherwise specified, all references to Sections and Exhibits
are to Sections and Exhibits of this Agreement;
(b) references to "month" shall mean the period commencing on one
day in a calendar month and ending on the numerically
corresponding day in the next calendar month; provided that if
a period commences on the last day in a calendar month or if
there is no numerically corresponding day in the month in
which the period ends, that period shall end on the last day
in that later month, and the references to "months" shall be
construed accordingly;
(c) references to any document are to be construed as references
to such document as amended or supplemented from time to time;
and
(d) references to any enactment shall include re-enactments,
amendments and extensions thereof.
Article 2. The Loan.
2.01 Purpose and Amount of Loan. To assist the Borrower in financing the
investment in Maxtor Corporation in California, U.S.A., and subject to
the terms and conditions hereof and in reliance, inter alia, on the
representations of the Borrower set forth in Article 7, the Lender
hereby agrees to make Advances in favor of the Borrower in an
aggregate amount up to the Commitment during the Availability Period
according to the procedure set forth in Section 2.02; provided, that
neither the Agent nor the Lender shall have any responsibility as to
the Borrower's application of the Advances or the Loan.
7 Page 155 of 194
<PAGE> 156
2.02 Drawdown. (a) Subject to the terms and conditions hereof, the
Borrower may borrow in an aggregate amount up to but not exceeding the
Commitment on any Banking Day during the Availability Period in one or
more Advances each in the minimum amount of Five Million Dollars
(US$5,000,000) or a higher amount which is an integral multiple of One
Million Dollars (US$1,000,000) or a lower amount equal to the then
undrawn amount of the Commitment, by the Borrower s instructing the
Lender through the Agent to make Advances. The Lender shall not have
any obligation to lend hereunder after the last day of the
Availability Period.
(b) The Borrower shall give the Agent a notice of Drawdown,
substantially in the form of Exhibit C hereto, at least three (3)
Banking Days (or such shorter period as the Lender shall otherwise
agree) prior to the proposed date of such Drawdown, provided, that on
the proposed date of such Drawdown all applicable conditions precedent
specified in Article 9 have been satisfied. Such notice once received
by the Agent shall be irrevocable and binding on the Borrower and the
Borrower shall reimburse the Agent and the Lender, on demand, for any
costs or losses incurred by the Agent and the Lender in the event that
the Borrower does not satisfy all conditions precedent applicable to
such Drawdown on the date of Drawdown.
(c) Upon receipt of the notice of Drawdown, the Agent shall notify
the Lender of the date of Drawdown and the amount of the Advance.
Upon receipt of such notice the Lender shall make available its
Advance to the Agent on the date of Drawdown.
2.03 Cancellation of Commitment. The Borrower may not cancel all or any
part of the Commitment before the expiration of the Availability
Period except as expressly provided in this Agreement; provided that
any part of the undrawn Commitment as of the final date of the
Availability Period shall be automatically cancelled.
Article 3. Interest, Default Interest and Fees.
3.01 Interest Rate. Subject to Section 3.08 below, the rate of interest on
the Loan for each Interest Period shall be four-fifths of one percent
(0.8%) per annum above the Interbank Rate (the "Interest Rate").
3.02 Interest Determination. The applicable Interest Rate for any given
Interest Period shall be determined on the relevant Interest
Determination Date. Promptly after each Interest Determination Date,
the Agent shall notify the Borrower and the Lender of the Interest
Rate and the amount of interest to be payable on the Interest Payment
Date for the relevant Interest Period.
3.03 Default Interest. (a) In the event the Borrower fails to make
payment of all or any portion of the Loan when due or any other
payment due hereunder (whether at its stated maturity, by acceleration
or otherwise), the Borrower shall pay interest on the unpaid amount,
to the extent permitted by law, from and including such due date until
the payment of said sum in full (after as well as before judgment) in
Dollars at a rate equal to one percent (1.0%) per annum above the
Interest Rate with respect to the immediately preceding Interest
Period calculated pursuant to Section 3.01 above, or at the option of
the Agent, at the rate that is one and four-fifths of one percent
(1.8%) per annum in excess of the Interbank Rate for interest
8 Page 156 of 194
<PAGE> 157
periods of one day, one week, one month or three months (as the Agent
shall elect in its sole discretion) determined on the Banking Day
succeeding that on which the Agent became aware of the default and for
successive interest periods thereafter so long as such amount remains
unpaid. Such interest shall be payable on the last day of each such
interest period and at any other time on demand of the Agent.
(b) In addition to payment of such default interest, the Borrower
shall indemnify the Lender, on demand, against any costs or losses
resulting from the Borrower's failing to pay when due any amounts of
principal or interest hereunder.
3.04 Front-End Fee. The Borrower agrees to pay to the Agent for the
account of the Agent and in the discretion of the Agent for the
account of the Lender a front-end fee as separately agreed between the
Borrower and the Agent by a front-end fee letter agreement being
entered into concurrently herewith and considered to be incorporated
herein.
3.05 Agency Fee. During the term of this Agreement, the Borrower shall pay
to the Agent for its own account an agency fee in the amount as
separately agreed between the Borrower and the Agent by an agency fee
letter agreement being entered into concurrently herewith and
considered to be incorporated herein (the front-fee letter agreement
and the agency fee letter agreement being hereinafter collectively
referred to as the "Letter Agreements"). The agency fee shall be
payable annually in advance not later than thirty (30) days from the
date hereof for the first year and thereafter on each anniversary of
the date hereof.
3.06 Stamp Taxes. The Borrower shall pay promptly all stamp, documentary
and other like duties, levies, imposts, charges, fees, deductions or
withholdings of any nature by any taxing authority to which this
Agreement, the Letter Agreements, the Note and the Guaranty (or any of
them) may be subject or give rise and shall indemnify the Agent and
the Lender on demand against any and all liabilities with respect to
or resulting from any delay or omission on the part of the Borrower to
pay any such levies, duties, imposts, charges, fees, deductions or
withholdings.
3.07 Costs. The Borrower shall, whether or not any portion of the
Commitment is advanced, pay to the Agent in the manner specified by
the Agent on demand, the charges including but not limited to legal
fees, printing costs, travel expenses, communication charges, signing
and publicity costs incurred by or on behalf of the Agent or the
Lender in connection with the negotiation, preparation, execution,
delivery and implementation of this Agreement (and actual or proposed
restructuring, rescheduling, amendment or modification hereto or
request therefor and any waiver hereunder), the Letter Agreements and
all documents executed pursuant hereto, and all costs, expenses and
amounts whatsoever, including the fees and expenses of counsel, which
the Agent or the Lender may expend or become liable for in demanding,
suing for, recovering and receiving payment of any sum due hereunder
and under any documents executed pursuant hereto.
3.08 Maximum Interest Rate. (a) Nothing in this Agreement or the Note to
the contrary shall require the Borrower to pay interest at a rate
exceeding the maximum rate permitted by applicable law. Neither this
Section nor Section 12.06 is intended to limit the rate of interest
payable for the account of the Lender to the maximum rate permitted by
the laws of the State
9 Page 157 of 194
<PAGE> 158
of New York (or any other applicable law) if a higher rate is
permitted with respect to such Lender by supervening provisions of the
United States Federal law.
(b) If the amount of interest payable for the account of the Lender
on any Interest Payment Date in respect of the immediately preceding
Interest Period, computed pursuant to this Agreement, would exceed the
maximum amount permitted by applicable law to be charged by such
Lender, the amount of interest payable for its account on such
Interest Payment Date shall automatically be reduced to such maximum
permissible amount.
(c) If the amount of interest payable for the account of the Lender
in respect of any Interest Period is reduced pursuant to sub-section
(b) and the amount of interest payable for its account in respect of
any subsequent Interest Period would be less than the maximum amount
permitted by law to be charged by the Lender, then the amount of
interest payable for its account in respect of such subsequent
Interest Period shall be automatically increased to such maximum
permissible amount; provided that at no time shall the aggregate amount
by which interest paid for the account of the Lender has been
increased pursuant to this sub-section (c) exceed the aggregate
amount by which interest paid for its account has theretofore been
reduced pursuant to sub-section (b).
Article 4. Payment and Repayment.
4.01 Interest. Interest at the applicable Interest Rate shall be payable in
arrears on each Interest Payment Date and shall be calculated on the
basis of the actual number of days elapsed and a year of 360 days.
Interest shall accrue from and including the first day of an Interest
Period to but not including the last day of such Interest Period.
4.02 Repayment. The Borrower shall repay the full amount of the Loan to
the Lender on the Repayment Date; provided, that the Agent or the
Lender may call the Loan at any time in accordance with the provisions
hereof.
4.03 Prepayment. The Borrower may prepay the Loan in whole or in part in
minimum amount of Five Million Dollars (US$5,000,000) and an integral
multiple thereof on any Interest Payment Date without any penalty or
premium upon giving of sixty (60) days' prior notice to the Agent;
provided that such prepayment shall be accompanied by payment of all
interest and other amounts then due hereunder. Any partial prepayment
shall be applied in inverse order of maturity and sums prepaid may not
be reborrowed.
4.04 Application of Payments. Notwithstanding anything herein to the
contrary, all payments made to or collected by the Agent or the Lender
hereunder, under the Letter agreements, under the Note or under the
Guaranty shall be applied by the agent for its own account and/or for
the account of the Lender in the following order of priority, (l) to
any amount then due and payable to the Agent or the Lender hereunder,
under the Letter Agreements, under the Note, or under the Guaranty not
otherwise listed in this Section, (2) to any fee then due and payable,
(3) to any accrued default interest then due and payable, (4) to
accrued interest then due and payable, (5) to principal then due and
payable, and (6) to prepayment of the Loan as provided in Section
4.03.
10 Page 158 of 194
<PAGE> 159
4.05 Banking Day. Whenever any payment or calculation is to be made on a
day which is not a Banking Day, such payment or calculation may be
made on the next succeeding Banking Day unless, with respect to
payments, as a result thereof, such payment would be made in the next
calendar month, in which case payment shall be made on the next
preceding Banking Day. Any adjustment so made shall, as appropriate,
be reflected in the computation of interest, fees and other amounts
due hereunder.
4.06 Place of Payment. All sums payable to the Agent by the Borrower or
the Lender hereunder or under any document contemplated hereby,
including but not limited to payments of principal and interest, the
fees and any costs or expenses shall be payable in same day funds to
the account of the Agent (account no. 001107) with American Express
Bank Ltd. in New York, U.S.A., no later than 10:00 a.m. (New York
time) on the due date thereof or to such other account or at such
place as the Agent may by notice to the Borrower instruct.
4.07 Loan Account. The Agent shall open and maintain on its books a loan
account in the Borrower's name and showing the Advances, the Loan,
repayments, prepayments, the computation and payment of interest and
other amounts due and sums paid hereunder. Such loan account shall be
conclusive and binding on the Borrower as to the amount at any time
due from the Borrower, absent manifest error in computation.
Article 5. Security.
5.01 Note. (a) As a condition precedent to the first Drawdown hereunder,
the Borrower shall deliver to the Agent the Note payable to the Agent
for the account of the Agent and the Lender in the principal amount
equal to the Commitment duly executed by the Borrower.
(b) The Note may be divided, replaced or consolidated at the option
of the agent, in whole or in part, at a time or times designated by
the Agent.
5.02 Guaranty. The Borrower shall, prior to the first Drawdown, deliver to
the Agent the Guaranty duly executed by the Guarantor.
Article 6. Yield Protection.
6.01 Substitute Basis of Borrowing. (a) If the Agent has determined on
any Interest Determination Date that Dollar deposits for periods equal
to the relevant Interest Period and in an amount comparable to the
Advances to be outstanding during such Interest Period are not
available to prime banks in the London interbank market, or the Agent
has been notified on any Interest Determination Date by the Lender
that the Interbank Rate does not accurately reflect the cost to the
Lender of making or maintaining the Advances during such Interest
Period, then the Agent shall so notify the Borrower and the Lender.
(b) The Agent in consultation with the Lender, promptly after the
giving of such notice, shall enter into negotiations with the Borrower
in good faith with a view to agreeing on an alternative mutually
acceptable basis for funding the Loan and for determining the Interest
Rates from time to time applicable to the Loan (hereinafter referred
to as the "Substitute Basis of Borrowing"). If at the expiry of
thirty (30) days from the date of the notice, the Agent, with the
written concurrence of the Lender, and the Borrower have agreed on
such
11 Page 159 of 194
<PAGE> 160
Substitute Basis of Borrowing, then it shall be retroactive to and
take effect from the beginning of the then current Interest Period.
(c) If at the expiry of thirty (30) days from the date of any such
notice, no Substitute Basis of Borrowing has been agreed upon, then
(i) the Borrower shall prepay the Loan on the thirtieth day after the
date of such notice, and (ii) interest shall be payable on the Loan at
the rate which is four-fifths of one percent (0.8%) per annum above the
per annum interest rate which shall be notified to the Agent by the
Lender as representing the cost to the Lender of funding (whether in
Dollars or any other currency) the Advances during such period.
6.02 Taxes. (a) Any and all payments made by the Borrower hereunder or
under any instrument delivered hereunder shall be made free and clear
of and without deduction for any present or future taxes, levies,
imposts, deductions, charges, or withholdings, and all liabilities
with respect thereto (excluding taxes imposed on net income of the
Lender or the Agent by the jurisdiction of its incorporation and any
political subdivisions thereof) (all such non-excluded taxes
hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to make any such deduction from any payment hereunder,
then (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes, or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder
or from the execution, delivery or registration of, or otherwise with
respect to, any instrument delivered hereunder (hereinafter referred
to as "Other Taxes").
(c) The Borrower will indemnify the Agent and the Lender for the full
amount of Taxes or Other Taxes (including without limitation any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under
this Section) paid by the Agent and the Lender or any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally assessed. This indemnification shall be paid
within thirty (30) days from the date the Agent or the Lender makes
written demand therefor.
(d) Within thirty (30) days after the date of any payment of Taxes
the Borrower will furnish to the Agent, at its address referred to in
Section 12.11, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in sub-sections (a) through (d) above shall survive the
payment in full of principal and interest hereunder and under any
instrument delivered hereunder.
12 Page 160 of 194
<PAGE> 161
(f) If the Borrower shall be required to reimburse the Agent or the
Lender or make any payment under sub-sections (a) through (e) above in
respect of any Taxes or Other Taxes imposed by a law or regulation
which comes into effect after the date of this Agreement, the Borrower
shall be free at any time within thirty (30) days of the effectiveness
of the requirement of such reimbursement or payment to prepay the Loan
as provided in Section 6.05, subject to giving the Agent not less than
five (5) Banking Days' prior notice thereof.
6.03 Compliance Costs. (a) The cost of maintaining any reserves or
special deposits against the Advances and any other cost of complying
with any law, regulation or condition with respect to the Advances or
relating in any way to funding or renewing the Advances, including
without limitation any reserve or special deposit requirement, any
restraint, guideline or policy not having the force of law with which
the Lender may comply, shall be reimbursed by the Borrower to the
Agent on behalf of the Lender who shall furnish the Agent with a
statement of the nature and amount of such cost for delivery to the
Borrower. For purposes of this sub-section 6.03(a), the term,
"Lender," shall be deemed to include the head office of the Lender as
well as any other branch of such head office.
(b) If the Borrower shall be required to reimburse the Lender under
sub-section 6.03(a) in respect of any law or regulation which comes
into effect after the date of this Agreement, the Borrower shall be
free at any time within thirty (30) days of the effectiveness of the
requirement of such payment to prepay, without penalty, the Advances
as provided in Section 6.05, subject to giving the Agent not less than
five (5) Banking Days' prior notice thereof.
6.04 Change of Law. Notwithstanding any other provision herein, in the
event that any change in any applicable law, rule or regulation or in
the interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof
shall make it unlawful for the Lender to (i) honor the Commitment or
(ii) maintain the Advances, then the Commitment shall terminate and
the Borrower shall forthwith, or within such longer period as may be
allowed by such law, rule, regulation or interpretation, prepay,
without penalty, the Loan as provided in Section 6.05. Upon the
occurrence of any such change terminating the Commitment or making it
unlawful for the Lender to maintain the Loan as aforesaid, the Lender
shall promptly notify the Agent thereof and shall furnish the Agent
evidence certified by the Lender as to such change for delivery to the
Borrower.
6.05 Adversity Prepayment. (a) If the Borrower shall exercise its right
to prepay the Loan pursuant to Section 6.02 or 6.03, or if the
Borrower shall be required to prepay the Loan pursuant to Section 6.01
or 6.04, the Borrower shall pay such amounts, together with interest
accrued thereon to the date of prepayment (computed on the Substitute
Basis of Borrowing, if applicable, for the time it is in effect)
together with such additional amounts as may be necessary to
compensate the Lender for any costs or losses resulting from such
prepayment. Any such prepayment shall not relieve the Borrower from
paying all other amounts payable under Section 6.01, 6.02, 6.03 or
6.04.
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(b) In the event that the Commitment has not yet been advanced and
the Borrower prepays all or a portion of the Loan then outstanding in
accordance with the provisions of Section 6.01, 6.02, 6.03 or 6.04,
the Commitment shall be cancelled.
6.06 Funding Costs. For purposes of Sections 2.02, 3.03, 6.05 and 10.02
the costs and losses of the Lender shall include, but shall not be
limited to, any loss arising from the re-employment of funds at rates
lower than the cost to the Lender of such funds and any related costs.
The Lender shall certify such costs and losses (including a reasonable
description thereof) to the Agent and the Agent shall notify the
Borrower of the amount thereof for the Lender.
6.07 Dollar Transaction. This is an international loan transaction in
which the specification of Dollars is of the essence, and Dollars
shall be the currency of account and of payment in all events. The
payment obligation hereunder shall not be discharged by an amount paid
in another currency whether pursuant to a judgment or otherwise, to
the extent that the amount so paid on prompt conversion to Dollars
under normal banking procedures does not yield the amount of Dollars
due hereunder. In the event that any payment, whether pursuant to a
judgment or otherwise, upon such conversion and transfer does not
result in payment of such amount of Dollars, the Agent and the Lender
shall be entitled to demand immediate payment of, and shall have a
separate cause of action for, the Dollar deficiency in respect of
payments due.
Article 7. Borrower's Representations and Warranties.
The Borrower represents and warrants to the Agent and the Lender as follows:
7.01 Incorporation. The Borrower is a corporation duly organized and
validly existing under the laws of Korea, has its registered head
office at the address set forth above, has full legal right, power and
authority to execute, deliver and perform its obligations under this
Agreement, the Letter Agreements, the Note and all other documents
executed pursuant hereto, to perform the terms and conditions hereof
and thereof and to own its properties and carry on its business as it
is presently being conducted and is qualified to do business and is in
good standing in each jurisdiction in which it is required to do so.
7.02 Restrictions. There is no constitutional provision, treaty,
convention, statute, law, regulation, decree or similar authority and
no provision of the Borrower's Articles of Incorporation and no
provision of any existing contract, agreement or instrument binding on
the Borrower or affecting its properties which has been or would be
contravened by the execution and delivery of this Agreement, the
Letter Agreements, the Note or any other document or instrument to be
delivered by the Borrower hereunder or by the performance or
observance by the Borrower of any of the terms hereof and thereof.
7.03 Authorizations. All authorizations, approvals, consents and licenses
from all legislative bodies of government, ministries, agencies,
exchange control authorities or other authorities of Korea or the
United States of America or any state thereof, as relevant, in order
for the Borrower (i) to incur the obligations provided for in this
Agreement, the Letter Agreements and the Note, (ii) to execute and
deliver this Agreement, the Letter Agreements, the Note and all other
documents and instruments to be delivered by the Borrower hereunder,
(iii) to
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perform and observe the terms and provisions hereof and thereof, (iv)
to make all payments hereunder and thereunder in Dollars and (v) to
invest in Maxtor Corporation have been or, by the date of the first
Drawdown, are or will have been duly obtained and are or will by such
date be in full force and effect.
7.04 Legal Actions. No registration, recording or filing is required as a
condition to the legality, validity or enforceability of this
Agreement, the Letter Agreements, the Note or any other documents to
be executed and delivered pursuant to the terms of this Agreement.
7.05 Agreement Binding. This Agreement, the Note and the Letter Agreements
constitute (or will when executed and delivered (in the case of the
Note, for value) constitute) the legal, valid and binding obligations
of the Borrower enforceable in accordance with their respective terms.
The indebtedness and other obligations incurred and to be incurred by
the Borrower under this Agreement, the Letter Agreements and the Note
rank at least pari passu in priority of payment and in all other
respects with all other unsecured indebtedness and obligations of the
Borrower except as separately disclosed to the Agent in writing.
7.06 Guaranty. The Guaranty has been duly authorized and when executed will
constitute legal, valid and binding obligations, enforceable against
the Guarantor in accordance with its terms.
7.07 Other Obligations. Neither the Borrower nor the Guarantor is in
default under any agreement to which it is a party or by which it may
be bound, a default in respect of which might have a material adverse
effect on the Borrower or the Guarantor or their respective
operations, properties or financial condition.
7.08 Litigation. No litigation, administrative proceeding or arbitration is
presently pending or, to the best knowledge of the Borrower,
threatened against it, the Guarantor or any of their properties,
which, in any one case or in the aggregate, might have a material
adverse effect on the Borrower's operations, properties or financial
condition or which would, if successfully prosecuted, prevent the
investment by the Borrower in Maxtor Corporation and there is no
competing offer by any party to purchase or otherwise acquire any
shares in Maxtor Corporation.
7.09 Compliance with Law. The Borrower is in compliance with all
applicable laws of Korea including without limitation the tax laws
thereof.
7.10 Accuracy of Information. All information relating to the Borrower
heretofore delivered to the Agent or the Lender in connection with
this Agreement is complete and correct in all material respects.
7.11 Financial Condition. The balance sheet of the Borrower as of December
31, 1992, together with statements of income and expense and changes
in financial position for the fiscal year then ended, certified by the
chief financial officer of the Borrower, heretofore delivered to the
Agent, fairly present the financial condition of the Borrower and the
results of its operations and transactions, and have been prepared in
accordance with generally accepted accounting principles consistently
applied by the Borrower throughout the periods involved.
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There are no liabilities, direct or indirect, fixed or contingent, of
the Borrower as of the dates of such balance sheets which are not
reflected therein or in the notes thereto.
7.12 Taxes. The Borrower has filed or caused to be filed all tax returns
which to the knowledge of the Borrower are required to be filed and
has paid all taxes shown to be due and payable on said returns or on
any assessment made against it or any of its property and all other
taxes, assessments, fees, liabilities or other charges imposed on it
or any of its property by any governmental authority, except for any
taxes, assessments, fees, liabilities or other charges which are being
contested in good faith and for which reserves which are adequate
under generally accepted accounting principles have been established.
7.13 Title to Properties; Possession Under Leases. The Borrower has good
and marketable title to, or valid leasehold interests in, all
properties and assets reflected on the balance sheet of the Borrower
as of December 31, 1992, referred to in Section 7.11, except for such
immaterial properties and assets as have been disposed of in the
ordinary course of business and except for minor defects in title that
do not interfere with the ability of the Borrower to conduct its
business as now conducted.
Article 8. Covenants.
8.01 Financial Statements. Throughout the life of this Agreement, the
Borrower shall provide the Agent (in sufficient copies for the Agent
and the Lender) with copies of its unaudited financial statements for
the first half of each fiscal year (if available) and its audited
financial statements (consolidated, if available) for each fiscal year
as they are available but in any event not later than ninety (90) days
after the close of the first six month period of each fiscal period
covered by an unaudited financial statement and not later than one
hundred twenty (120) days after the close of each fiscal period
covered by an audited financial statement (consolidated, if
available), and such other information respecting the financial
condition and operations of the Borrower as the Agent or the Lender
may from time to time reasonably request. Each financial statement
provided hereunder shall have been prepared in accordance with
generally accepted accounting principles consistently applied in Korea
and be accompanied by a certificate executed by a duly authorized
officer of the Borrower stating (i) that as of the date of such
financial statement the Borrower is in full compliance with all terms
and conditions hereof, including without limitation all financial
covenants, and of any document executed pursuant hereto and (ii) that
as of such date no Event of Default and no event which, with the
giving of notice or the passage of time or both, would constitute an
Event of Default has occurred and is continuing.
8.02 Rights; Compliance with Law. The Borrower shall preserve and maintain
its existence under applicable law and all of its rights, privileges
and franchises, not materially alter the nature of its business,
comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, and shall pay
and discharge all applicable taxes, assessments and governmental
charges upon it or upon its properties, promptly when due and, in any
event, prior to the date on which penalties may become attached
thereto.
8.03 Representations & Warranties. The Borrower shall ensure that the
representations and warranties contained in this Agreement remain at
all times true and accurate.
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8.04 Litigation. The Borrower shall promptly give notice to the Agent of
any litigation and of any proceedings by or before any governmental
agency and of all disputes concerning the Borrower, or any of its
assets, any of which, in any one case or in the aggregate, might have
a material adverse effect on the operations or financial condition of
the Borrower.
8.05 Inspection. Upon request of the Agent, the Borrower shall give any
representative of the Agent access, during normal business hours, to,
and permit the Agent to visit and inspect any of the properties of the
Borrower and to examine or make extracts from, such of its books,
records and documents as may be pertinent to the ability of the
Borrower to perform hereunder or under the documents executed pursuant
hereto.
8.06 Notice. As soon as possible but in any event within ten (10) days
after occurrence, the Borrower shall give written notice to the Agent
of any Event of Default or any event which, with the giving of notice
or passage of time or both, would become an Event of Default and of
any other matter which has resulted or might result in a material
adverse change in the Borrower's operations or financial condition
(each such notice setting forth the nature of such event and the steps
being taken by the Borrower to remedy such event).
8.07 Merger; Disposition of Assets. The Borrower shall not, without a
prior written consent of the Lender, reorganize or consolidate with or
merge into any other Person, nor dispose of (whether in one
transaction or in a series of transactions) all or any substantial
part of its property, whether now owned or hereafter acquired.
8.08 Authorizations. The Borrower shall promptly obtain all foreign
exchange control authorizations, if any, and all such other
governmental approvals and filings as shall now or hereafter be
necessary under applicable laws and regulations for the Borrower to
make and perform this Agreement and to borrow hereunder and promptly
to furnish copies thereof to the Lender, and promptly to execute,
acknowledge, deliver, file, notarize and register at its own expense
all such additional agreements, instruments and documents, and perform
such other acts, as the Lender deems desirable to effectuate the
purposes of this Agreement.
8.09 Further Documents. The Borrower shall execute all such other
documents and instruments and do all such other acts and things as the
Agent or the Lender may reasonably require to carry out the
transactions contemplated herein or in the documents required to be
delivered hereunder.
Article 9. Conditions Precedent.
9.01 Initial Drawdown. The obligation of the Lender to make available its
Advance in respect of the initial Drawdown is subject to fulfillment,
as determined solely by the Agent and its counsel, of the following
conditions precedent on the date of the initial Drawdown:
(a) Authorizations. The Agent shall have received in form and
substance satisfactory to it and to its counsel:
(i) The Articles of Incorporation of and the Commercial Registry
extracts regarding each of the Borrower and the Guarantor;
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(ii) The most recent financial statements of each of the Borrower
and the Guarantor;
(iii) A duly authenticated copy of the minutes of the Board of
Directors' meeting of the Borrower at which resolutions were
adopted authorizing the execution, delivery and performance of
this Agreement, the Letter Agreements, the Note and all other
agreements and documents to be executed pursuant hereto,
including the incurring of the debt obligations hereunder and
thereunder upon the terms hereof and thereof and authorizing
the person(s) who signed, or will sign, this Agreement, the
Letter Agreements, the Note and all other documents to be
executed pursuant hereto on the Borrower's behalf to do so,
and any power of attorney executed in connection therewith;
(iv) A certificate as to the specimen signature(s) of the person(s)
authorized to execute this Agreement, the Note and all other
documents to be provided hereunder on the Borrower's behalf;
(v) The duly executed Guaranty, a duly certified copy of the
minutes of the Board of Directors' meeting of the Guarantor at
which resolutions were adopted authorizing the execution,
delivery and performance by the Guarantor of the Guaranty and
authorizing the persons who have executed or will execute the
Guaranty to do so, and any power of attorney executed in
connection therewith, together with the specimen signature(s)
of the person(s) authorized to execute the Guaranty; and
(vi) The seal certificates of the representative directors of the
Borrower and the Guarantor and the certificates as to the seal
impressions of the directors affixed on the minutes of the
Board of Directors' meeting referred to in items (iii) and (v)
above;
(b) Government Authorizations. The Agent shall have received, in
form and substance satisfactory to the Agent and its counsel,
certified copies and true and correct English-language translations
of each approval of any government authority of Korea or of the United
States of America or any state thereof, as relevant, necessary or
advisable in connection with the execution, delivery and performance
of this Agreement, the Note, the Guaranty and any other document or
instrument required hereunder or thereunder and for the Borrower's
investment in Maxtor Corporation, including, without limitation, (i)
the foreign exchange approval of the Borrower's designated Class A
foreign exchange trading bank in Korea required for the execution of
this Agreement and the Guaranty and (ii) the approval of the Bank of
Korea for the overseas investment by the Borrower.
(c) Guaranty. The Agent shall have received the executed Guaranty as
required by Section 5.02 of this Agreement.
(d) Note. The Agent shall have received the executed Note as
required by Section 5.01 of this Agreement.
(e) Opinions. The Agent shall have received (i) the opinion of
Milbank, Tweed, Hadley & McCloy, the special New York counsel to the
Agent and the Lender and (ii) the opinion of Messrs. Kim & Chang,
special Korean counsel to the Agent and the Lender, each in form and
substance satisfactory to the Agent.
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(f) Appointment of Process Agents. The Agent shall have received
written confirmation from the agents for service of process appointed
by the Borrower pursuant to Section 12.08 of this Agreement and by the
Guarantor pursuant to Clause 12.03 of the Guaranty irrevocably
accepting such appointment.
(g) Notice of Drawdown. The Agent shall have received the timely
written notice of the Borrower as specified in Section 2.02(b),
substantially in the form of Exhibit C attached hereto.
(h) Drawdown Certificate. The Agent shall have received on or prior
to the date of Drawdown a certificate of the Borrower, dated the date
of the initial Drawdown, substantially in the form of Exhibit D
attached hereto.
(i) Other Documents. The Agent shall have received such other
approvals, opinions and documents as it may reasonably request.
9.02 Subsequent Drawdowns. The obligation of the Lender to make available
its Advance in respect of each Drawdown after the initial Drawdown is
subject to the fulfillment, as determined solely by the Agent and its
counsel, of the following conditions precedent on the date of such
Drawdown:
(a) All documents and instruments delivered to the Agent pursuant
to Section 9.01 shall continue to be in full force and effect;
and
(b) The Agent shall have received (i) the notice of Drawdown as
specified in Section 2.02 (ii) a Drawdown certificate, dated
the date of such Drawdown, substantially in the form of
Exhibit D hereto, and (iii) such other documents as the Agent
or the Lender may reasonably request.
9.03 Other Conditions Precedent. The obligations of the Lender to make its
Advances in respect of each Drawdown are also subject to the condition
precedent that no Event of Default and no event which, with the
passage of time or the giving of notice or both, would become an Event
of Default shall have occurred and be continuing, and the
representations and warranties made herein shall have remained and
then be true and correct as if also made on the date of such Drawdown
and all legal matters in connection with this Agreement shall be
satisfactory to the Agent and its counsel.
Article 10. Events of Default.
10.01 Event of Default. Each of the following events and occurrences shall
constitute an Event of Default under this Agreement:
(a) the Borrower fails to make payment in full of any amount which it
is obliged to pay under this Agreement, the Letter Agreements and/or
the Note on the date when such amount is due and payable;
(b) any representation or warranty made or deemed restated by the
Borrower in this Agreement or the Letter Agreements or by the
Guarantor in the Guaranty shall be shown to
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have been incorrect or misleading in any material respect as of its
date, or any certificate or opinion furnished by the Borrower or the
Guarantor under this Agreement or the Guaranty proves to have been
false or misleading as of its date in any material respect;
(c) the Borrower or the Guarantor fails to perform or violates any
other provision of this Agreement, the Letter Agreements or the
Guaranty, and such failure or violation is not remediable or, if
remediable, continues unremedied for a period of ten (10) calendar
days from the date the Lender transmits notice to the Borrower with
respect thereto;
(d) any governmental registration or approval granted or required in
connection with this Agreement, the Letter Agreements, the Note or the
Guaranty or for the Borrower's investment in Maxtor Corporation, is
not obtained, expires or is terminated, revoked, withdrawn or
withheld, or is modified or amended in any manner prejudicing the
interests of the Lender hereunder;
(e) it becomes unlawful for the Borrower to perform any obligation
hereunder, under the Letter Agreements or under the Note or for the
investment in Maxtor Corporation to be consummated, or for the
Guarantor to perform its obligations under the Guaranty;
(f) the Borrower or the Guarantor shall fail to pay any money due
under any other agreement (whether or not written) or document
evidencing, securing, guaranteeing or otherwise relating to
indebtedness or monetary obligations of the Borrower or the Guarantor
or there occurs any other event of default or other event which, with
the giving of notice or the passage of time, or both, would constitute
a default or an event of default under any such agreement or document
and the effect of which is to accelerate or to permit acceleration of
the maturity of such indebtedness or obligation;
(g) the Guaranty for any reason has been revoked, modified or becomes
unacceptable to the Agent or the Lender or the Guarantor has breached
any one of the terms thereof;
(h) any judgment or decree for money damages or for a fine or penalty
in excess of One Million Dollars (US$1,000,000) or its equivalent in
any other currency is entered against the Borrower or the Guarantor
and is not paid, discharged or fully bonded within thirty (30) days;
(i) the whole or a substantial part of the business or assets of the
Borrower or the Guarantor shall, without the prior written consent of
the Agent, be confiscated for any reason or sold, transferred or
otherwise disposed of;
(j) the Borrower or the Guarantor shall, without the prior written
consent of the Agent (which consent shall not unreasonably be
withheld), voluntarily or involuntarily merge or consolidate with any
other entity;
(k) Korea or any competent authority thereof declares any moratorium
on the payment of its indebtedness or the indebtedness of any
governmental agency or authority thereof or by juridical entities
domiciled or resident in Korea or Korea ceases to be a member in good
standing of the International Monetary Fund and the International Bank
for Reconstruction and Development; the international monetary
reserves of Korea become subject to any
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mortgage, lien, security interest, pledge, charge, or other
encumbrance or preferred arrangement; or Korea segregates all or a
portion of its foreign exchange assets or earnings for the benefit of
any creditor or class of creditors;
(l) the Borrower or the Guarantor becomes insolvent or unable to pay
its debts when due or the Borrower or the Guarantor commits or permits
any act of bankruptcy, which term shall include (i) filing a petition
in any bankruptcy, reorganization, compulsory composition, winding-up
or liquidation proceeding or other proceeding analogous in purpose or
effect, (ii) failing to have any such petition filed by any other
party discharged within thirty (30) days, (iii) application for or
consent to the appointment of a receiver or trustee for the
bankruptcy, reorganization, compulsory composition, winding-up or
liquidation of the Borrower or the Guarantor, (iv) making an
assignment for the benefit of creditors, (v) the admission in writing
by the Borrower or the Guarantor of its inability to pay its debts,
(vi) the entry of any court order or judgment confirming the
bankruptcy or insolvency of the Borrower or the Guarantor or approving
any reorganization, compulsory composition, winding-up or liquidation
of the Borrower or the Guarantor or a substantial portion of its
respective assets or (vii) any meeting of the Borrower or the
Guarantor is convened or any other preparatory steps are taken for the
purposes of considering an application for an administration order in
relation to the Borrower or the Guarantor or such an administration
order is made by a court; or
(m) any circumstances occur which in the opinion of the Agent provide
reasonable grounds for belief that the Borrower or the Guarantor may
not (or may not be able to) perform its obligations hereunder, under
the Letter Agreements, under the Note or under the Guaranty, as the
case may be.
10.02 Consequences of Default. (a) Upon the happening of any of the
foregoing Events of Default and at the option of the Lender, (i) the
obligation of the Agent and/or the Lender to permit Drawdowns shall
immediately cease; (ii) the Agent may and, upon the written
instruction of the Lender, shall declare, by notice to the Borrower,
the principal of and accrued interest on the Loan and all other
amounts then owed by the Borrower to the Agent and the Lender
immediately due and payable; provided, that upon the happening of any
event specified in Section 10.01(1), the principal of and accrued
interest in the Loan and all other amounts then owed by the Borrower
to the Agent and the Lender shall become immediately due and payable
and the obligations of the Agent and/or the Lender to permit Drawdowns
shall immediately cease without any notice to the Borrower; (iii) the
Agent may take any other action, exercise any other right or pursue
any other remedy conferred upon the Agent and/or the Lender by this
Agreement, the Note or the Guaranty or by any applicable law or
regulation or otherwise as a consequence of such Event of Default.
(b) The Borrower shall also pay to the Lender on demand such
additional amounts as may be necessary to compensate the Lender for
any costs or losses resulting from such Event of Default. No waiver of
any Event of Default shall constitute a waiver of any other or any
succeeding Event of Default except to the extent provided in such
waiver.
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Article 11. Agent and Lender.
11.01 Appointment. The Lender hereby appoints the Agent to act as its agent
as herein specified and irrevocably authorizes the Agent to take such
action on its behalf under the provisions of this Agreement and any
other agreements and instruments referred to herein and to exercise
such powers hereunder and thereunder as are specifically delegated to
the Agent and such powers as are reasonably incidental thereto. In
performing its functions and duties hereunder the Agent does not
assume and shall not be deemed to have assumed any obligation towards
or relationship of agency or trust with or for the Borrower.
11.02 Decision of Lender. The Agent shall to the extent practicable under
the circumstances consult with the Lender prior to taking action on
behalf of the Lender under this Agreement. The Agent shall not take
any action contrary to the written direction of the Lender and shall
take any lawful action in accordance with the provisions of this
Agreement prescribed in a written direction of the Lender. The Agent
may decline to take any action except upon the written direction of
the Lender and the Agent may obtain a ratification by the Lender of
any action taken by it under this Agreement. In each case the Agent
shall have no liability to the Borrower or the Lender for any action
taken by it upon the direction of the Lender or if ratified by the
Lender, nor shall the Agent have any liability for any failure to act
(except as contemplated in Section 11.07) unless the Agent has been
instructed to act by the Lender. Notwithstanding anything herein to
the contrary, the Agent need not take any action on behalf of the
Lender unless and until it is indemnified to its satisfaction for any
and all consequences of such action.
11.03 Reimbursement for Expenses. The Lender agrees to reimburse the Agent
for its own account for all expenses incurred by the Agent for which
the Agent is entitled to reimbursement from the Borrower pursuant to
Section 3.07, in the event the Borrower fails to make such
reimbursement.
11.04 Liability and Credit Appraisal. Neither the Agent nor any of its
officers, directors, employees or agents shall be liable for any
action taken or omitted by it or them hereunder, or in connection
herewith, except for its or their gross negligence or willful
misconduct. The Agent shall not be responsible for any recitals,
statements, representations or warranties herein or in any information
supplied by or on behalf of the Borrower or the Guarantor or for the
execution, effectiveness, genuineness, validity or enforceability of
the Loan, this Agreement, the Letter Agreements, the Note, the
Guaranty or any other document executed in connection herewith, or be
required (except upon the written direction of the Lender) to make any
inquiry concerning the performance or observance by the Borrower of
any of the terms, provisions or conditions of this Agreement or by the
Guarantor of the Guaranty. The Lender represents and warrants to the
Agent that it has made an independent credit investigation and
appraisal of the Borrower and the Guarantor on the basis of such
documents and information as it has deemed appropriate and that it has
entered into this Agreement on the basis of such independent
appraisal, and the Lender represents and warrants that it shall
continue to make its own credit appraisal. The Lender agrees to
indemnify and hold the Agent harmless from and against any and all
liabilities, damages, penalties, judgments, suits, expenses and other
costs of any kind or nature whatsoever
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imposed on, incurred by or asserted against the Agent in respect of
their obligations hereunder, except for its gross negligence or
willful misconduct.
11.05 Reliance by Agent. The Agent shall be entitled to rely upon any
communication or document believed by it to be genuine and correct and
to have been signed, sent or made by the proper person or persons and
to act upon the advice of legal counsel and other experts selected by
it concerning all matters pertaining to this Agreement and its duties
hereunder, and shall not be liable to any of the other parties hereto
for any of the consequences of such reliance. The Agent may rely for
the purposes of the giving of notice or the disbursement of funds on
the name and address of the Lender contained herein or as notified to
the Agent pursuant to Section 12.11.
11.06 Agent; Other Banking. The Agent and its affiliates may, without
liability to account, engage in any kind of banking, trust or other
business with the Borrower as if it were not the Agent or affiliate.
In addition, the Agent and each of its affiliates shall be entitled to
receive from the Borrower its portion of any fee in connection with
this transaction without any liability to account therefor to the
Lender except as the Agent and its affiliates may have expressly
agreed.
11.07 Payments, Notices and Determinations by the Agent. (a) The Agent
shall distribute to the Lender in like funds upon receipt the Lender's
share of all amounts of principal and interest, and to the Lender its
share of all fees and all other amounts received by the Agent from the
Borrower hereunder on behalf of the Lender. If at any time the Agent
makes available to the Lender amounts due from the Borrower hereunder,
which the Borrower has failed to make available to the Agent, the
Lender shall on request forthwith refund such amounts to the Agent
together with interest thereon at the rate which is notified by the
Agent to the Lender as representing the cost to the Agent of funding
(whether in Dollars or any other currency) such amounts.
(b) The Agent shall promptly notify the Lender of all notices served
by the Borrower. Determinations of Interest Rates, Interest Periods,
Interest Determination Dates, funding costs and amounts of interest,
default interest and other sums due hereunder contained in notices
from the Agent shall be conclusive and binding on the Borrower and the
Lender, absent manifest error in computation or transmission.
11.08 Successor Agent. Subject to the appointment and acceptance of a
successor agent as provided below, the Agent may resign at any time by
giving written notice thereof to the Lender and the Borrower, and the
Agent may be removed at any time with or without cause by the Lender.
Upon any such resignation or removal, the Lender shall have the right
to appoint a successor agent. If no successor agent shall have been
so appointed by the Lender and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving of notice of
resignation or the Lender's removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lender, appoint a successor
agent, which shall be a bank which has an office in Hong Kong or in
Seoul, Korea. Upon the acceptance of any appointment as Agent
hereunder by a successor agent, such successor agent 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 its duties and obligations hereunder. After any
23 Page 171 of 194
<PAGE> 172
retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article 11 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 the Agent hereunder. Notwithstanding the above, if all
the parties hereto agree in writing, the Agent may assign all of its
rights and obligations hereunder without having to comply with the
above provisions of this Section 11.08.
Article 12. Miscellaneous.
12.01 Term. The term of this Agreement shall commence on the date first set
forth above and shall end on the Repayment Date hereunder or, if
later, upon payment in full of all principal, interest and other sums
payable by the Borrower hereunder or under the Note. The
representations and warranties of the Borrower set forth herein shall
survive the making of the Loan and the indemnities of the Borrower
contained herein shall survive repayment of the Loan.
12.02 Entire Agreement. This Agreement and the documents referred to herein
constitute the entire obligation of the parties hereto with respect to
the subject matter hereof and shall supersede any prior expressions of
intent or understandings with respect to this transaction. Any
amendment hereto shall be in writing, signed by or on behalf of the
parties hereto.
12.03 Waiver; Cumulative Rights. The failure or delay of the Agent or the
Lender to require performance by the Borrower of any provision of this
Agreement shall not affect its right to require performance of such
provision unless and until such performance has been waived in writing
by the Agent in accordance with the terms hereof. Each and every
right granted to the Agent or the Lender hereunder or under any other
document or instrument delivered hereunder or in connection herewith,
or allowed to it at law shall be cumulative and may be exercised in
part or in whole from time to time.
12.04 Assignment. (a) This Agreement shall be binding upon and shall be
enforceable by the Borrower, the Agent and the Lender and their
respective heirs, successors and assigns, except that the Borrower
shall have no right to assign or transfer its rights or obligations
hereunder. An assignment by the Lender of all or a part of its rights
and obligations hereunder may be made by giving to the Agent and the
Borrower a notice of assignment, or by giving to the Agent a transfer
certificate substantially in the form of Exhibit E hereto. Upon any
transfer, assignment or subparticipation by the Lender, the
transferee, assignee or subparticipant shall be entitled, to the
extent of the interest transferred, to the benefit of the indemnities,
tax reimbursements and rights of set-off of a Lender pursuant to the
provisions of this Agreement as fully as if a party hereto. The acts
of the Lender or the failure of the Lender to act hereunder shall in
all circumstances be conclusive and binding on any transferee,
assignee or subparticipant of the Lender's interest hereunder.
(b) The Agent or the Lender may disclose to any potential assignee,
transferee or sub-participant of all or any part of its rights or
obligations under this Agreement or to any Person who may otherwise
enter into contractual relations with the Agent or the Lender in
relation to this Agreement, such information about the Borrower and/or
its related entities as the Agent or the Lender thinks fit.
24 Page 172 of 194
<PAGE> 173
12.05 Indemnification. The Borrower agrees to indemnify and hold harmless
the Agent and the Lender from and against any and all losses, claims,
damages and liabilities caused by any untrue or misleading statements
made to the Agent or the Lender or caused by any omission of a
material fact necessary to make the statements so made not misleading.
12.06 Governing Law. This Agreement and the Note shall be governed by and
construed in accordance with the laws of the State of New York.
12.07 Waiver of Sovereign Immunity. The Borrower represents and warrants
that this Agreement, the Letter Agreements and the Note are commercial
rather than public or governmental acts and that the Borrower is not
entitled to claim immunity from legal proceedings with respect to
itself or any of its property on the grounds of sovereignty or
otherwise under any law or in any jurisdiction where an action may be
brought for the enforcement of any of the obligations arising under or
relating to this agreement, the Letter Agreements and the Note. To
the extent that the Borrower or any of its properties has or hereafter
may acquire any right to immunity from set-off, legal proceedings,
attachment prior to judgment, other attachment or execution of
judgment on the grounds of sovereignty or otherwise, the Borrower
hereby irrevocably waives such rights to immunity in respect of its
obligations arising under or relating to this Agreement and the Note.
12.08 Jurisdiction. (a) The Borrower irrevocably consents that any legal
action or proceeding against it or any of its property with respect to
this Agreement, the Letter Agreements and the Note may be brought in
any court of the State of New York or any Federal court of the United
States of America located in the City and State of New York, United
States of America, or in any court located in Seoul, Korea, as the
Agent or the Lender may elect, and by execution and delivery of this
Agreement the Borrower hereby irrevocably submits to and accepts with
regard to any such action or proceeding for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Borrower hereby irrevocably designates,
appoints and empowers Hyundai Corp. (U.S.A.) at 300 Sylvan Ave.,
Englewood Cliffs, N.J. 07632, U.S.A. for the time being as its agent
to receive for and on its behalf service of process in the State of
New York in any legal action or proceeding with respect to this
Agreement and the Note. It is understood that a copy of any such
process served on such agent shall be promptly forwarded by registered
airmail by the person commencing such proceeding to the Borrower at
its address set forth in Section 12.11, but the failure of the
Borrower to receive such copy shall not affect in any way the service
of process as aforesaid. The Borrower further irrevocably consents to
service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified airmail, postage prepaid, to the Borrower at its address set
forth in Section 12.11. Nothing herein shall affect the right of the
Agent to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Borrower
in any other jurisdiction. The Borrower further agrees that, to the
extent permitted by law, final judgment against it in any such action
or proceeding shall be conclusive and may be enforced in any other
jurisdiction within or outside the State of New York by suit on the
judgment, a certified or exemplified copy of which shall be conclusive
evidence of the fact and of the amount of its indebtedness.
25 Page 173 of 194
<PAGE> 174
(b) The Borrower hereby waives any right it may have under the laws
of any jurisdiction to commence by publication any legal action or
proceeding with respect to this Agreement or any document or agreement
executed pursuant hereto. The Borrower hereby irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or
hereafter have to any suit, action or proceeding arising out of or
relating to this Agreement, the Letter Agreements and the Note being
brought in the State of New York, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in a
court in the State of New York has been brought in an inconvenient
forum.
12.09 Waiver of Jury Trial. EACH OF THE BORROWER, THE AGENT AND THE LENDER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.10 Set-Offs. To the extent permitted by law, the Lender shall have the
right to apply amounts on deposit or account with the Lender, at its
head office or at any branch, subsidiary or affiliate of its head
office in reduction of amounts past due hereunder and under the Note.
12.11 Notices. Any communication, demand or notice to be given hereunder
shall be given in writing by hand or sent by mail, facsimile
transmission or telex as follows:
To the Borrower: HYUNDAI CORPORATION
140-2, Kye-dong
Chongro-ku, Seoul
Korea
Attention: Finance Department
FACSIMILE: (822) 746-1090
TELEPHONE: (822) 746-1832
TELEX: K23175 HDCORP
To the Agent
and Lender: AMERICAN EXPRESS BANK LTD.
Singapore Branch
16 Collyer Quay
Raffles Place
Singapore 0104
Attention: Mr. Barat Parshar
Senior Director
FACSIMILE: (65) 534-3022
TELEPHONE: (65) 538-4833
TELEX: RS 21172
or to each party, at such other address or number as such party may
designate by notice in writing to the other party. Notices delivered
by hand shall be deemed received upon
26 Page 174 of 194
<PAGE> 175
delivery; notices sent by postage prepaid registered airmail shall be
deemed received seven (7) days after sending and notice sent by
facsimile or telex shall be deemed received at the time of the
dispatch thereof, answerback received or appropriate evidence of
receipt confirmed.
All notices, demands, requests, statements or other communications to
be made or given by the Borrower hereunder shall be in the English
language. Any documents required to be delivered pursuant to this
Agreement which are not in the English language must be accompanied by
a certified English language translation thereof and in the event of
any conflict between the original of the document and the English
language translation thereof, the English language translation shall
prevail.
12.12 Severability. If any one or more of the provisions contained in this
Agreement or any document executed in connection herewith shall be
invalid, illegal or unenforceable in any respect under any applicable
law, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
12.13 Counterparts. This Agreement may be signed in any number of
counterparts. Any single counterpart or a set of counterparts signed,
in either case, by all the parties hereto shall constitute a full and
original agreement for all purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized signatories as of the day and
year first written above.
BORROWER: HYUNDAI CORPORATION
By: /s/ Doo Soo Kang
----------------------
Name: DOO SOO KANG
Title:
AGENT: AMERICAN EXPRESS BANK LTD.
By: /s/ S.D. Lee
----------------------
Name: S.D. LEE
Title: Senior Director
LENDER: AMERICAN EXPRESS BANK LTD.
By: /s/ S.D. Lee
----------------------
Name: S.D. LEE
Title: Senior Director
27 Page 175 of 194
<PAGE> 176
GUARANTY
January 28, 1994
To: AMERICAN EXPRESS BANK LTD.
16 Collyer Quay
Raffles Place
Singapore 0104
as Agent for
American Express Bank Ltd. as lender
named in the Loan Agreement
referred to below
Dear Sirs:
1. Guaranty
1.01 We, the undersigned, Hyundai Heavy Industries Co., Ltd. (the
"Guarantor"), for and in consideration of the Lender (as defined
hereinafter) entering into the Loan Agreement (as defined hereinafter)
with, and making the Advances to, Hyundai Corporation (the "Borrower")
and for other good and valuable consideration which the Guarantor
hereby acknowledges having received, hereby irrevocably and
unconditionally:
(a) guarantee to American Express Bank Ltd. as agent (including
its successors or assigns, the "Agent"), and American Express
Bank Ltd. as lender (including any successor or assigns, the
"Lender") the prompt performance by the Borrower (including
its permitted successors and assigns under the Loan Agreement
hereinafter referred to) of all its obligations under or in
connection with the loan agreement (the "Loan Agreement")
dated January 28, 1994 and made by and among the Borrower, the
Lender and the Agent for advances of up to US$37,499,000 and
the payment of all sums payable now or in the future to the
Agent, and the Lender by the Borrower thereunder or in
connection therewith in each case when and as the same shall
become due; and
(b) undertake to the Agent that, if and whenever the Borrower
shall be in default in the payment of any sum to be payable by
the Borrower to the Agent or the Lender under or in connection
with the Loan Agreement, the Guarantor shall pay such sum on
demand against a certificate of the Agent stating the amount
due and stating that the Borrower has failed to fulfill any
one or more obligations under the Loan Agreement, which
certificate shall be conclusive as to the amount due save for
manifest error.
Terms defined in the Loan Agreement shall bear the same meanings when
used herein.
1.02 Without prejudice to the rights of the Agent and the Lender against
the Borrower, the Guarantor unconditionally and irrevocably agrees
that, if any sums hereby guaranteed are not recoverable on the basis
of a guarantee (whether by reason of any legal limitation, illegality,
disability or incapacity on or of the Borrower or the Guarantor or any
other Person or by reason of any other fact or circumstance and
whether or not known to or discoverable by the
28 Page 176 of 194
<PAGE> 177
Agent), then the Guarantor will, as a separate independent stipulation
and as a primary obligor, on demand indemnify the Agent and the Lender
against any loss or liability suffered or incurred by the Agent and
the Lender as a result thereof.
1.03 The Guarantor hereby agrees that this Guaranty shall be a continuing
security and shall not be satisfied, discharged or affected by any
intermediate payment or settlement of any sum or sums owing or payable
by the Guarantor hereunder and shall remain in full force and effect
until the moneys and liabilities hereby guaranteed have been
unconditionally and irrevocably paid and discharged in full to the
satisfaction of the Agent and the Lender.
1.04 Any settlement or discharge under this Guaranty between the Agent and
the Lender and the Guarantor shall be conditional upon no security or
payment to the Agent by the Borrower, the Guarantor or any other
Person being avoided or set-aside or ordered to be refunded or reduced
by virtue of any provision or enactment relating to bankruptcy,
insolvency or liquidation for the time being in force, and if such
condition is not satisfied, the Agent shall be entitled to recover
from the Guarantor on demand the value of such security or the amount
of any such payment as if such settlement or discharge had not
occurred.
1.05 The obligation of the Guarantor hereunder shall not be affected by any
act, omission, matter or thing which, but for this provision, might
operate to release or otherwise exonerate the Guarantor from its
obligations hereunder in whole or in part, including without
limitation, and whether or not known to or discoverable by the
Guarantor, the Borrower, the Agent or any other Person:
(a) any time or waiver granted to or composition with the Borrower
or any other Person; or
(b) the taking, variation, compromise, renewal or release of or
refusal or neglect to perfect or enforce any rights, remedies
or securities against the Borrower or any other Person; or
(c) any legal limitation, disability, dissolution, incapacity or
other circumstances relating to the Borrower or any other
Person including, without limitation, the event that Korea or
Hong Kong or any competent authority thereof declares any
moratorium on the payment of its indebtedness by any
governmental agency or authority thereof or by juridical
entities domiciled or resident in Korea or Hong Kong; or
(d) any amendment or supplement to the Loan Agreement or any other
document or security; or
(e) the dissolution, amalgamation, reconstruction or
reorganization of the Borrower or any other Person; or
(f) the unenforceability or invalidity of any obligations of the
Borrower or any other Person under the Loan Agreement or any
other document or security.
1.06 The Guarantor acknowledges and agrees that:
(a) it has not received any security from the Borrower or any
other Person for the giving of this Guaranty and it will not
take any such security without the prior written consent of
29 Page 177 of 194
<PAGE> 178
the Agent and the Guarantor will hold any security taken in
breach of this provision in trust for the Agent;
(b) the Agent shall not be bound to enforce any guarantee or
security or to proceed with or take any other steps against
the Borrower or any other Person before enforcing this
Guaranty; and
(c) this Guaranty shall be in addition to, and not in substitution
for, any other rights which the Agent may now or hereafter
have under or by virtue of any guarantee, security, agreement
or lien or by operation of law or under any collateral or
other security now or hereafter held by the Agent or to which
the Agent may be entitled.
1.07 Until the moneys and liabilities hereby guaranteed have been
unconditionally and irrevocably paid and discharged in full to the
satisfaction of the Agent and the Lender, the Guarantor shall not by
virtue of any payment made hereunder on account of such moneys and
liabilities or otherwise howsoever:
(a) be subrogated to any rights, security or moneys held, received
or receivable by the Agent and the Lender; or
(b) be entitled to exercise any right of contribution from any
co-surety liable in respect of such moneys and liabilities
under any other guarantee, security or agreement; or
(c) exercise any right of set-off or counterclaim against the
Borrower or any such co-surety; or
(d) receive claims or have the benefit of any payment,
distribution, security or indemnity from the Borrower or any
such co-surety; or
(e) unless so directed by the Agent (when the Guarantor will prove
in accordance with such directions), claim as a creditor of
the Borrower or any such co-surety in competition with the
Agent.
The Guarantor shall hold in trust for the Agent and forthwith pay or
transfer (as appropriate) to the Agent any such payment (including an
amount equal to any such set-off), distribution or benefit of such
security, indemnity or claim in fact received by it.
1.08 The Agent may at any time keep in a separate account (without
liability to pay interest thereon) for as long as it may think fit,
any moneys received, recovered or realized under this Guaranty or
under any other guarantee, security or agreement relating in whole or
in part to the moneys and liabilities hereby guaranteed without being
under any intermediate obligation to apply the same or any part
thereof in or towards the discharge of such amount, until all moneys
and liabilities hereby guaranteed have been unconditionally and
irrevocably paid in full to the satisfaction of the Agent and the
Lender.
30 Page 178 of 194
<PAGE> 179
2. REPRESENTATIONS AND WARRANTIES
2.01 The Guarantor hereby represents and warrants to the Agent and the
Lender that:
(a) it is a corporation (chusik hoesa) duly organized and validly
existing under the laws of Korea;
(b) it has all necessary powers and authority to issue this
Guaranty and to perform and observe the obligations contained
herein and this Guaranty has been validly authorized by the
Board of Directors of the Guarantor (in full compliance with
the requirements of Article 398 of the Korean Commercial Code
and Article 124 of the Korean Civil Code, if applicable) and
this Guaranty constitutes the legal, valid and binding
obligations of the Guarantor enforceable in accordance with
its terms;
(c) neither the giving of this Guaranty nor the observance of its
terms including without limitation the making of payments
hereunder in Dollars contravenes any law, decree, ordinance,
or similar enactment binding on it; nor does the giving of
this Guaranty or the observance of its terms contravene any
existing mortgage, contract or agreement binding on the
Guarantor;
(d) there are no proceedings pending before any court or to its
knowledge threatened against or affecting the Guarantor, the
Borrower or any of the Guarantor's subsidiaries and there are
no proceedings pending before any governmental agency or
administrative body or to its knowledge threatened against the
Guarantor, the Borrower or any of the Guarantor's subsidiaries
which if adversely determined would materially and adversely
affect the Guarantor's financial condition or the Guarantor's
ability to pay under the terms and conditions of this Guaranty
and the Guarantor's obligations hereunder rank and shall rank
throughout the life hereof at least pari passu with all other
unsecured indebtedness of the Guarantor except for certain
indebtedness preferred by mandatory provisions of law;
(e) the Guarantor has not taken any corporate action and no other
steps have been taken or legal proceedings started or
threatened against it for its winding-up, dissolution or
reorganization or for the appointment of a receiver, trustee
or similar officer of it or of any or all of its assets and
revenues;
(f) this Guaranty constitutes the Guarantor's legal, valid and
binding obligations from the date hereof and will not be
discharged except by complete performance of the respective
obligations of the Borrower contained in the Loan Agreement
and the agreements executed pursuant thereto and the
Guarantor's obligations under this Guaranty;
(g) the Borrower is a corporation duly organized, and validly
existing under the laws of Korea, with which the Guarantor has
common business interest; and
(h) the Guarantor's balance sheet as at December 31, 1992, and the
related statements of income and retained earnings for the
fiscal year then ended, copies of which have been provided to
the Agent, fairly present the Guarantor's financial condition
as at the date of such balance sheet and the results of the
Guarantor's operations for the period ended on
31 Page 179 of 194
<PAGE> 180
such date all in accordance with generally accepted accounting
principles in Korea consistently applied and since the date of
such balance sheet there has been no material adverse change
in the Guarantor's financial condition or operations.
3. UNDERTAKINGS
3.01 The Guarantor undertakes that throughout the period of this Guaranty
it shall provide the Agent with copies of the Guarantor s unaudited
financial statements upon request of the Agent and the Guarantor's
audited financial statements on an annual basis as soon as they are
available but in any event not later than 90 days after the close of
such fiscal period covered by an unaudited financial statements and
not later than 120 days after the close of such fiscal period covered
by an audited financial statements, and such other information
regarding the Guarantor's financial status as the Agent may reasonably
request.
3.02 Each financial statement provided hereunder shall have been prepared
in accordance with generally accepted Korean accounting principles
consistently applied, and be accompanied by a certificate of its duly
authorized officer stating that as of the date of such financial
statement the Guarantor is in full compliance with all terms and
conditions hereof.
3.03 The Guarantor shall do all things necessary or desirable to ensure
that any licenses or consents required to enable the Guarantor to
enter into and perform this Guaranty are maintained in full force and
effect and to secure to the Lender the full benefit of this Guaranty.
The Guarantor hereby agrees to obtain, comply with the terms of and do
all that is necessary in order to lawfully enter into and perform its
obligations under this Guaranty. The Guarantor hereby agrees that it
will, from time to time on a request of the Agent furnish the Agent
with such information about its financial condition as the Agent may
reasonably request.
4. PAYMENTS AND CALCULATIONS, INTEREST
4.01 All payments to be made by the Guarantor to the Agent under this
Guaranty shall be made by not later than 10:00 a.m. (New York time) on
the due date in same day Dollar funds or in such other funds and/or
settled in such other manner as the Agent will specify as being
customary at the time for the settlement of international transactions
of the type contemplated by this Guaranty, to the account of the Agent
with such bank account in New York as the Agent may from time to time
notify to the Guarantor.
4.02 If any sum shall become due on a day which is not a Banking Day, the
due date thereof shall be extended to the next succeeding Banking Day,
unless such Banking Day falls in the next calendar month, in which
event such due date shall be the immediately preceding Banking Day.
4.03 In the event that the Agent does not receive on the due date any sum
due under this Guaranty, the Guarantor shall pay to the Agent on
demand interest on such sum from and including the due date therefor
to the date of actual payment (after as well as before judgment) at
the rate per annum determined in accordance with the terms of Section
3.03 of the Loan Agreement. Any such interest which remains unpaid
shall be compounded at the
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<PAGE> 181
end of each such interest period. All payments of interest hereunder
shall be calculated on the basis of actual days elapsed in a 360 day
year.
5. EXPENSES
5.01 The Guarantor shall pay to the Agent on demand all costs, fees and
expenses (including, but not limited to, legal fees and expenses) and
Taxes (as hereinafter defined) thereon incurred by the Agent in
connection with the preserving or enforcing of, any of its rights
under this Guaranty.
5.02 The Guarantor shall pay promptly all stamp, documentary and other like
present and future taxes, duties, imposts, charges, fees, deductions
or withholdings of any nature (herein referred to as "Taxes") to which
this Guaranty may be subject or give rise and shall indemnify the
Agent on demand against any and all liabilities with respect to or
resulting from any delay or omission on the part of the Guarantor to
pay any such Taxes.
6. CURRENCY INDEMNITY
6.01 If, under any applicable law or regulation, and whether pursuant to a
judgment being made or registered against the Guarantor or the
liquidation of the Guarantor or for any other reason, any payment
under or in connection with this Guaranty is made or fails to be
satisfied in a currency (the "payment currency") other than the
currency in which such payment is due under or in connection with this
Guaranty (the "contractual currency"), then to the extent that the
amount of such payment actually received by the Agent, when converted
into the contractual currency at the rate of exchange, falls short of
the amount due under or in connection with this Guaranty, the
Guarantor, as a separate and independent obligation, shall indemnify
and hold harmless the Agent against the amount of such shortfall. For
the purposes of this Clause 6.01, "rate of exchange" means the rate at
which the Agent is able on or about the date of such payment to
purchase the contractual currency with the payment currency and shall
take into account any premium and other costs of exchange with respect
thereto.
7. NO COUNTERCLAIM, TAXATION
7.01 All payments to be made by or on behalf of the Guarantor to the Agent
pursuant to this Guaranty shall be made (a) without any set-off,
counterclaim or condition whatsoever and (b) free and clear of, and,
without deduction for or on account of, any present or future Taxes,
unless the Guarantor is required by law or regulation to make any such
payment subject to any Taxes.
7.02 In the event that the Guarantor is required by any law or regulation
to make any deduction or withholding on account of any Taxes from any
payment due under this Guaranty, then:
(a) the Guarantor shall notify the Agent promptly as soon as it
becomes aware of such requirement;
(b) the Guarantor shall remit promptly the amount of such Taxes to
the appropriate taxation authority, and in any event prior to
the date on which penalties attach thereto;
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<PAGE> 182
(c) such payment shall be increased by such amount as may be
necessary to ensure that the Agent receives a net amount, free
and clear of all Taxes, equal to the full amount which the
Agent would have received had such payment not been subject to
such Taxes; and
(d) the Guarantor shall indemnify the Agent and the Lender against
any liability of any of them in respect of such Taxes.
7.03 Not later than thirty days after each deduction or withholding of any
such Taxes, the Guarantor shall forward to the Agent evidence
satisfactory to the Agent that such Taxes have been remitted to the
appropriate taxation authority.
8. SET-OFF
8.01 The Guarantor hereby authorizes the Agent and the Lender (without
prior notice) to apply any credit balance (whether or not then due)
which is at any time held by the Agent and the Lender for the account
of the Guarantor at any office of the Agent and the Lender in or
towards satisfaction of any sum then due from the Guarantor to the
Agent or the Lender under this Guaranty and unpaid. The Agent is
authorized to use all or any part of any such credit balance to buy
such other currencies as may be necessary to effect such application.
The Agent shall not be obliged to exercise any of its rights under
this Clause 8.01, which shall be without prejudice and in addition to
any right of set-off, combination of accounts, lien or other rights to
which the Agent is at any time otherwise entitled (whether by
operation of law, contract or otherwise).
9. COMMUNICATIONS
9.01 Any communication, demand or notice to be given to the Guarantor
hereunder shall be deemed to be given when delivered in writing by
mail or when sent by telex or facsimile to:
To Guarantor: Hyundai Heavy Industries Co., Ltd.
140-2, Kye-dong
Chongro-ku, Seoul
Korea
FACSIMILE: (822) 746-4662
TELEX: K28361 HDYARD
or to such other address or telex number that the Guarantor shall
notify the Agent.
9.02 All communications and documents delivered pursuant to or otherwise
relating to this Guaranty shall either be in English or accompanied by
a certified English translation.
9.03 A certificate or determination of the Agent as to any matter provided
for in this Guaranty, in the absence of manifest error, shall be
conclusive and binding on the Guarantor.
34 Page 182 of 194
<PAGE> 183
10. ASSIGNMENTS AND TRANSFERS
10.01 This Guaranty shall be binding upon and inure to the benefit of the
Agent, the Lender and the Guarantor and their respective successors
and permitted assigns and references in this Guaranty to any of them
shall be construed accordingly.
10.02 The Guarantor may not assign or transfer any of its rights and/or
obligations under this Guaranty.
10.03 The Agent or the Lender may assign all or any part of its rights
hereunder to any assignee of all or a similar proportion of its rights
under the Loan Agreement in accordance with the terms of the Loan
Agreement, without the consent of the Guarantor. The Agent shall
notify the Guarantor upon any such assignment.
10.04 The Agent or the Lender may disclose to any potential assignee or
transferee of all or any part of its rights or obligations under this
Guaranty or to any Person who may otherwise enter into contractual
relations with the Agent or the Lender in relation to this Guaranty,
such information about the Guarantor and/or its related entities as
the Agent or the Lender thinks fit.
11. MISCELLANEOUS
11.01 Time shall be of the essence in the performance of the obligations by
the Guarantor under this Guaranty. No delay or omission on the part
of the Agent in exercising any right, power or remedy under this
Guaranty shall impair such right, power or remedy or be construed as a
waiver thereof nor shall any single or partial exercise of any such
right, power or remedy preclude any further exercise thereof or the
exercise of any other right, power or remedy. The rights, powers and
remedies herein provided are cumulative and not exclusive of any
rights, powers and remedies provided by law.
11.02 No failure to exercise any right, power or privilege under this
Guaranty on the part of the Agent shall operate as a waiver thereof.
No waiver by the Agent of any terms of this Guaranty shall be
effective unless in writing.
11.03 If at any time any one or more of the provisions in this Guaranty are
or become invalid, illegal or unenforceable in any respect under any
law or regulation, the validity, legality and enforceability of the
remaining provisions of this Guaranty shall not be in any way affected
or impaired thereby.
11.04 The obligations of the Guarantor under this Guaranty shall remain in
full force and effect until the Agent shall have received all amounts
due or to become due to it hereunder in accordance with the terms
hereof. Without prejudice to the foregoing, the obligations of the
Guarantor under Causes 1.04, 4.03, 5 and 6 shall survive the repayment
of the Loan.
12. LAW AND JURISDICTION
12.01 This Guaranty shall be governed by, and construed in accordance with,
the laws of the State of New York in all respects, including matters
of construction, validity and performance.
35 Page 183 of 194
<PAGE> 184
12.02 Any litigation arising out of or in connection with this Guaranty and
any action or proceeding to execute or otherwise enforce any judgment
obtained against the Guarantor for breach hereof, may be instituted in
the courts of the State of New York or any Federal court of the United
States of America located in the City of New York, or any court
located in Seoul, Korea, as the Agent or the Lender may elect, and by
execution and delivery of this Guaranty the Guarantor generally and
unconditionally submits to each such jurisdiction. The foregoing,
however, shall not limit the rights of the Agent or the Lender to
bring any legal action or proceeding or to obtain execution of
judgment in any other jurisdiction, whether concurrently or not.
12.03 The Guarantor hereby irrevocably and unconditionally designates,
appoints and empowers the Representative Office of the Guarantor
Currently at 300 Sylvan Ave., Englewood Cliffs, N.J. 07632, U.S.A. as
its agent to receive for and on its behalf service of process in the
State of New York in any action or proceeding with respect to this
Guaranty. The Guarantor does hereby agree that the failure of the
aforementioned agent to give notice to the Guarantor of any such
service shall not impair or affect the validity of such service or of
any judgment rendered in any action or proceeding based thereon. The
foregoing, however, shall not limit the right of the Agent or the
Lender to serve process in any other manner permitted by law.
12.04 The Guarantor does hereby waive, to the fullest extent permitted by
applicable law, any objection which the Guarantor may now or hereafter
have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Guaranty brought in the courts in the State
of New York or such other court as the Agent or the Lender may elect
in accordance with the terms of this Guaranty, and does hereby further
irrevocably waive any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
12.05 The Guarantor represents and warrants that this Guaranty is a
commercial rather than a public or governmental act and that the
Guarantor is not entitled to claim immunity from legal proceedings
with respect to itself or any of its property on the grounds of
sovereignty or otherwise under any law or in any jurisdiction where an
action may be brought for the enforcement of any of the obligations
arising under or relating to this Guaranty. To the extent that the
Guarantor or any of its properties has or hereafter may acquire any
right to immunity from set-off, legal proceedings, attachment prior to
judgment, other attachment or execution of judgment on the grounds of
sovereignty or otherwise, the Guarantor hereby irrevocably waives such
rights to immunity in respect of its obligations arising under or
relating to this Guaranty.
IN WITNESS WHEREOF we have executed this Guaranty as of the day and
year first above written.
HYUNDAI HEAVY INDUSTRIES CO., LTD.
By /s/ Yeong Ki Lee
----------------------
Name: YEONG KI LEE
Title:
36 Page 184 of 194
<PAGE> 185
Exhibit 5
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, the persons named below agree* Schedule 13D (including
amendments thereto) with respect to the Common Stock, par value US$0.01 per
share, of Maxtor Corporation, which agreement may be executed in any number of
counterparts and further agree that this Joint Filing Agreement be included as
an exhibit to such joint filings.
Dated: February 3, 1994.
* to the joint filing on HYUNDAI ELECTRONICS INDUSTRIES CO., LTD.
behalf of each of them
of a Statement on By /s/ Jon Yong Kim
-------------------------------------
JOO YONG KIM
President and Representative Director
HYUNDAI HEAVY INDUSTRIES CO., LTD.
By /s/ Joo Yong Kim
------------------------------------
JOO YONG KIM
Attorney-in-fact
HYUNDAI CORPORATION
By /s/ Joo Yong Kim
------------------------------------
JOO YONG KIM
Attorney-in-fact
HYUNDAI MERCHANT MARINE CO., LTD.
By /s/ Joo Yong Kim
------------------------------------
JOO YONG KIM
Attorney-in-fact
1 Page 185 of 194
<PAGE> 186
Exhibit 6
WOON-HYUN LAW AND NOTARY OFFICE
Registered No. 199 4-308
NOTARIAL CERTIFICATE
WOON-HYUN LAW AND NOTARY OFFICE
223, NAEJA-DONG, CHONGRO-KU,
SEOUL, KOREA
2 Page 186 of 194
<PAGE> 187
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That HYUNDAI HEAVY INDUSTRIES CO., LTD., a Korean corporation
("Company"), hereby makes, constitutes and appoints:
JOO-YONG KIM
as its true and lawful attorney in fact for Company and in its name, place and
stead, as its act and deed, and for its use and benefit, to do each and all of
the following:
1. To exercise all voting, consent, approval and other similar
rights of Company with respect to capital stock of Maxtor Corporation, whether
such rights arise by law, charter document, contract or otherwise.
2. To enter into agreements, execute and deliver instruments and
take such other actions as, in each case, such attorney in fact deems advisable
(which shall be conclusively evidenced by his taking such action) for the
purpose of exercising all rights of Company referred to in paragraph 1 above.
3. To execute, file and deliver such reports, schedules, notices
and other documents, and any amendments thereto or other actions relating
thereto, relating to or connected with Maxtor Corporation or capital stock of
Maxtor Corporation as, in each case, such attorney in fact deems advisable
(which shall be conclusively evidenced by his taking such action), including
without limitation one or more Schedules 13D under the Securities Exchange Act
of 1934, as amended, any amendments thereto and any joint filing agreement
relating thereto.
GIVING AND GRANTING unto said attorney in fact full power and
authority to do and perform every act and thing whatsoever incident to the
foregoing as fully to all intents and purposes as Company might or could do
for itself, hereby ratifying and confirming all that such attorney in fact
shall lawfully do or cause to be done by virtue hereof.
IT WITNESS WHEREOF, Purchaser has executed this power this 1st day of
February, 1994.
HYUNDAI HEAVY INDUSTRIES CO., LTD.
By /s/ Jung-Kook Kim
-----------------------------------
JUNG-KOOK KIM
President & Representative Director
3 Page 187 of 194
<PAGE> 188
Registered No. 199 4-308
Notarial Certificate
MR. CHAN-KI, HO
attorney in fact of
MR. JUNG-KOOK, KIM PRESIDENT
OF HYUNDAI HEAVY INDUSTRIES CO., LTD.
appeared before me and admitted said
principal's subscription to the attached
POWER OF ATTORNEY
This is hereby attested on this
1st day of FEB, 1994 at this office
WOON-HYUN LAW AND NOTARY OFFICE
223 NAEJA-DONG, CHONGRO-KU
SEOUL, KOREA
----------------------------------------
Attorney-at-Law
This office has been authorized by the Minister of Justice, Republic of Korea,
to act as Notary Public Since Sept. 1, 1979 under Law No. 4544
4 Page 188 of 194
<PAGE> 189
Exhibit 7
WOON-HYUN LAW AND NOTARY OFFICE
Registered No. 199 4-309
NOTARIAL CERTIFICATE
WOON-HYUN LAW AND NOTARY OFFICE
223, NAEJA-DONG, CHONGRO-KU,
SEOUL, KOREA
5 Page 189 of 194
<PAGE> 190
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That HYUNDAI CORPORATION, a Korean corporation ("Company"), hereby
makes, constitutes and appoints:
JOO-YONG KIM
as its true and lawful attorney in fact for Company and in its name, place and
stead, as its act and deed, and for its use and benefit, to do each and all of
the following:
1. To exercise all voting, consent, approval and other similar
rights of Company with respect to capital stock of Maxtor Corporation, whether
such rights arise by law, charter document, contract or otherwise.
2. To enter into agreements, execute and deliver instruments and
take such other actions as, in each case, such attorney in fact deems advisable
(which shall be conclusively evidenced by his taking such action) for the
purpose of exercising all rights of Company referred to in paragraph 1 above.
3. To execute, file and deliver such reports, schedules, notices
and other documents, and any amendments thereto or other actions relating
thereto, relating to or connected with Maxtor Corporation or capital stock of
Maxtor Corporation as, in each case, such attorney in fact deems advisable
(which shall be conclusively evidenced by his taking such action), including
without limitation one or more Schedules 13D under the Securities Exchange Act
of 1934, as amended, any amendments thereto and any joint filing agreement
relating thereto.
GIVING AND GRANTING unto said attorney in fact full power and
authority to do and perform every act and thing whatsoever incident to the
foregoing as fully to all intents and purposes as Company might or could do
for itself, hereby ratifying and confirming all that such attorney in fact
shall lawfully do or cause to be done by virtue hereof.
IT WITNESS WHEREOF, Purchaser has executed this power this 1st day of
February, 1994.
HYUNDAI CORPORATION
By /s/ Se-Yong Park
-----------------------------------
SE-YONG PARK
President & Representative Director
6 Page 190 of 194
<PAGE> 191
Registered No. 199 4-309
Notarial Certificate
MR. CHAN-KI, HO
attorney in fact of
MR. SE-YONG, PARK PRESIDENT OF HYUNDAI
CORPORATION
appeared before me and admitted said
principal's subscription to the
attached POWER OF ATTORNEY
This is hereby attested on this
1st day of FEB, 1994 at this office
WOON-HYUN LAW AND NOTARY OFFICE
223 NAEJA-DONG, CHONGRO-KU
SEOUL, KOREA
______________________________________
Attorney-at-Law
This office has been authorized by the Minister of Justice, Republic of Korea,
to act as Notary Public Since Sept. 1, 1979 under Law No. 4544
7 Page 191 of 194
<PAGE> 192
Exhibit 8
WOON-HYUN LAW AND NOTARY OFFICE
Registered No. 199 4-310
NOTARIAL CERTIFICATE
WOON-HYUN LAW AND NOTARY OFFICE
223, NAEJA-DONG, CHONGRO-KU,
SEOUL, KOREA
8 Page 192 of 194
<PAGE> 193
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That HYUNDAI MERCHANT MARINE CO., LTD., a Korean corporation
("Company"), hereby makes, constitutes and appoints:
JOO-YONG KIM
as its true and lawful attorney in fact for Company and in its name, place and
stead, as its act and deed, and for its use and benefit, to do each and all of
the following:
1. To exercise all voting, consent, approval and other similar
rights of Company with respect to capital stock of Maxtor Corporation, whether
such rights arise by law, charter document, contract or otherwise.
2. To enter into agreements, execute and deliver instruments and
take such other actions as, in each case, such attorney in fact deems advisable
(which shall be conclusively evidenced by his taking such action) for the
purpose of exercising all rights of Company referred to in paragraph 1 above.
3. To execute, file and deliver such reports, schedules, notices
and other documents, and any amendments thereto or other actions relating
thereto, relating to or connected with Maxtor Corporation or capital stock of
Maxtor Corporation as, in each case, such attorney in fact deems advisable
(which shall be conclusively evidenced by his taking such action), including
without limitation one or more Schedules 13D under the Securities Exchange Act
of 1934, as amended, any amendments thereto and any joint filing agreement
relating thereto.
GIVING AND GRANTING unto said attorney in fact full power and
authority to do and perform every act and thing whatsoever incident to the
foregoing as fully to all intents and purposes as Company might or could do
for itself, hereby ratifying and confirming all that such attorney in fact
shall lawfully do or cause to be done by virtue hereof.
IT WITNESS WHEREOF, Purchaser has executed this power this 1st day of
February, 1994.
HYUNDAI MERCHANT MARINE CO., LTD.
By /s/ Se-Yong Park
-----------------------------------
SE-YONG PARK
President & Representative Director
9 Page 193 of 194
<PAGE> 194
Registered No. 199 4-310
Notarial Certificate
MR. CHAN-KI, HO
attorney in fact of
MR. SE-YONG, PARK PRESIDENT OF HYUNDAI
MERCHANT MARINE CO., LTD.
appeared before me and admitted said
principal's subscription to the attached
POWER OF ATTORNEY
This is hereby attested on this
1st day of FEB, 1994 at this office
WOON-HYUN LAW AND NOTARY OFFICE
223 NAEJA-DONG, CHONGRO-KU
SEOUL, KOREA
_____________________________________
Attorney-at-Law
This office has been authorized by the Minister of Justice, Republic of Korea,
to act as Notary Public Since Sept. 1, 1979 under Law No. 4544
10 Page 194 of 194
