EXHIBIT 10-26
EXECUTION COPY
SUPPLEMENTAL RECEIVABLES PURCHASE AGREEMENT
among
LAM RESEARCH CORPORATION
ABN AMRO BANK N.V., CAYMAN ISLANDS BRANCH
LAM RESEARCH CO., LTD.
and
ABN AMRO BANK N.V., TOKYO BRANCH
RECEIVABLES PURCHASE AGREEMENT
THIS SUPPLEMENTAL AGREEMENT, dated as of June 28, 1995, is entered into by and
among:
(1) LAM RESEARCH CORPORATION, a company incorporated in Delaware and having its
chief executive office at 4650 Cushing Parkway, Fremont, California 94538-
6401 ("LRC");
(2) ABN AMRO BANK N.V., acting through its CAYMAN ISLANDS BRANCH, a branch
licensed in the Cayman Islands and having its office at 335 Madison Avenue,
16th Floor, New York, New York 10017 ("ABN CAYMAN");
(3) LAM RESEARCH CO., LTD., a company incorporated in Japan and having its
registered office at 1-1-10, Oyama, Sagamihara-shi, Kanagawa (in its
capacity as the seller of receivables hereunder, the "SELLER");
(4) ABN AMRO BANK N.V., acting through its TOKYO BRANCH, a branch licensed in
Japan and having its registered office at Shiroyama JT Mori Building, 3-1,
4-chome, Toranomon, Minato-ku, Tokyo (the "PURCHASER"); and
(5) LAM RESEARCH CO., LTD., a company incorporated in Japan and having its
registered office at 1-1-10, Oyama, Sagamihara-shi, Kanagawa (in its
capacity as the collection agent for receivables hereunder, the "COLLECTION
AGENT").
RECITALS:
(A) LRC and the Seller have sold to Sumitomo Metal Industries, Ltd., a Japanese
corporation which has acted as LRC's and the Seller's Japanese distributor
(the "BUYER"), certain semiconductor capital equipment (the "EQUIPMENT") on
account. The Buyer has in turn sold the Equipment to other Japanese
corporations (the "END-USERS") on account.
(B) Pursuant to a Receivables Purchase Agreement dated as of March 23, 1995
(the "EXISTING RECEIVABLES AGREEMENT") among LRC (in its capacity as the
seller thereunder), ABN Cayman and LRC (in its capacity as the collection
agent thereunder), LRC sold to ABN Cayman certain of the receivables owed
to LRC by the Buyer.
(C) The Seller and the Purchaser now have agreed, upon the terms and subject to
the conditions set forth herein, that the Seller will sell to the Purchaser
the receivable described in the FIRST SCHEDULE hereto, which is a
receivable owed to the Seller by the Buyer and arose from the sale by the
Seller to the Buyer of certain of the Equipment (the "RECEIVABLE").
(D) The Collection Agent has agreed, upon the terms and subject to the
conditions set forth herein, to act as the agent of the Purchaser in
connection with the collection of the receivable sold to the Purchaser
pursuant to this Supplemental Agreement.
(E) LRC (in its capacities as both seller and collection agent under the
Existing Receivables Agreement), ABN Cayman, the Seller, the Purchaser and
the Collection Agent now wish to supplement the Existing Receivables
Agreement by entering into this Supplemental Agreement to set forth the
terms and conditions upon which the Purchaser will purchase the Receivable.
THE PARTIES HERETO HEREBY AGREE as follows:
PART 1
INTERPRETATION
1. DEFINITIONS AND INTERPRETATION
1.1 In this Supplemental Agreement and in the Schedules, unless otherwise
defined therein or unless the context otherwise requires, the following terms
shall have the following meanings:
"ABN CAYMAN" has the meaning given to that term in CLAUSE (2) OF THE
INTRODUCTORY PARAGRAPH hereof.
"ACCEPTANCE" means, for any Equipment, the acceptance by the End-User of
such Equipment in a manner which obligates the End-User to pay to the Buyer
an amount equal to the full Face Amount of the Purchased Receivable arising
out of the sale of such Equipment to the Buyer.
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"ADJUSTED LIBO RATE" means, for any period and amount, the per annum rate
equal to the sum of (i) the LIBO Rate for such period and amount plus (ii)
three-fourths of one percent (0.75%).
"ASSIGNMENT" means an assignment substantially in the form of PART 1 OF THE
THIRD SCHEDULE.
"BUYER" has the meaning given to that term in RECITAL (A).
"CAPITAL" means, at any date as of which the amount thereof is to be
determined, the sum of (i) Total Debt and (ii) Tangible Net Worth.
"CLOSING DATE" means June 30, 1995, or such later date as the parties
hereto may agree.
"COLLECTION AGENT" has the meaning given to that term in CLAUSE (5) OF THE
INTRODUCTORY PARAGRAPH hereof.
"COLLECTIONS" means all payments by or on behalf of the Buyer received in
respect of the Receivable, whether in the form of cash, electronic money
transfer or any other form of payment.
"CONTINGENT OBLIGATION" means, as applied to any person, any direct or
indirect liability, contingent or otherwise, of that person with respect to
any indebtedness, lease, dividend, letter of credit or other obligation of
another, including, without limitation, any such obligation directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit
in the ordinary course of business), co-made or discounted or sold with
recourse by that person, or in respect of which that person is otherwise
directly or indirectly liable. The amount of any Contingent Obligations
shall be equal to the amount of the obligation so guaranteed or otherwise
supported.
"CURRENT LIABILITIES" means, at any date as of which the amount thereof is
to be determined, the consolidated current liabilities of LRC and its
subsidiaries determined in accordance with generally accepted accounting
principals.
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"DAILY RATE" means, for any day, the per annum rate equal to the greater of
(i) the rate quoted on such day by two or more commercial banks in Tokyo as
the short-term prime rate for short-term borrowings in Yen by prime
borrowers in Tokyo and (ii) the Adjusted LIBO Rate for one-week Yen
deposits determined by the Purchaser on such day (for delivery two London
Banking Days after such day), such rate to change on each day as the short-
term prime rate and Adjusted LIBO Rate for one-week Yen deposits shall
change.
"DEBT" of any person means, at any date, without duplication, (i) all
obligations of such person for borrowed money, (ii) all obligations of such
person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such person as lessee which are
capitalized in accordance with generally accepted accounting principles,
(v) all obligations of such person as lessee which are not capitalized in
accordance with generally accepted accounting principles but which are
secured by an encumbrance upon any property of such person, and (vi) all
debt secured by an encumbrance on any asset of such person, whether or not
such debt is otherwise guaranteed by such person.
"DISCOUNT AMOUNT" means, for the Purchased Receivable, the product of (i)
the Face Amount of the Purchased Receivable times (ii) the Discount Rate
for the Discount Period and Face Amount for the Purchased Receivable.
"DISCOUNT PERIOD" means, for the Purchased Receivable, the period
commencing on the Closing Date and ending on the Tentative Due Date for the
Purchased Receivable.
"DISCOUNT RATE" means, for any Discount Period and amount, a fraction
(expressed as a percentage rounded up to the nearest one thousandth of one
percent) calculated as follows:
D = L x P/360
---------------
1 + (L x P/360)
Where:
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D = the Discount Rate;
L = the Adjusted LIBO Rate (expressed as a decimal number) for such
Discount Period and amount; and
P = the number of days in such Discount Period.
"DISCOUNT REDUCTION AMOUNT" means, with respect to the Purchased Receivable
if the Payment Date occurs prior to the Tentative Due Date, an amount equal
to the product of (i) the Discount Amount for the Purchased Receivable
times (ii) a fraction (expressed as a percentage rounded down to the
nearest one thousandth of one percent), the numerator of which is the
number of days in the period commencing on the Payment Date and ending on
the Tentative Due Date and the denominator of which is the number of days
in the Discount Period for the Purchased Receivable.
"END-USERS" has the meaning given to that term in RECITAL (A).
"EQUIPMENT" has the meaning given to that term in RECITAL (A).
"EXISTING RECEIVABLES AGREEMENT" has the meaning given to that term in
RECITAL (B).
"FACE AMOUNT" means, for the Receivable, the amount in Yen which is payable
by the Buyer on account of such Receivable, as set forth for the Receivable
in the Assignment.
"FUNDED INTEREST AMOUNT" means, with respect to the Purchased Receivable if
the Scheduled Due Date is set to occur after the Tentative Due Date, an
amount equal to the interest which would have accrued on the Face Amount of
the Purchased Receivable from the Tentative Due Date through the Scheduled
Due Date at the Adjusted LIBO Rate for such period and such Face Amount.
"FUNDED INTEREST ACCRUED AMOUNT" means, with respect to the Purchased
Receivable if the Scheduled Due Date is after the Tentative Due Date and
the Payment Date or the Repurchase Date occurs prior to the Scheduled Due
Date, an amount equal to the product of (i) the Funded Interest Amount for
the Purchased Receivable times (B) a fraction (expressed as a
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percentage rounded up to the nearest one thousandth of one percent), the
numerator of which is the number of days in the period commencing on the
Tentative Due Date and ending on the Payment Date or the Repurchase Date,
as the case may be, and the denominator of which is the number of days in
the period commencing on the Tentative Due Date and ending on the Scheduled
Due Date.
"GUARANTY" means a guaranty of LRC in the form of the Seventh Schedule.
"INSOLVENCY EVENT" means, in relation to any person, its winding-up or
dissolution or the judgment or declaration of insolvency or bankruptcy or
the appointment of an administrator, trustee, liquidator, sequestrator or
similar official over its or any of its reserves or assets, the filing or
presentation of a petition in relation to any of the foregoing or the
commencement of any analogous proceedings in relation thereto, and, in the
case of such filing or presentation made by any third party against it,
such filing or presentation (i) having resulted in a judgment or
declaration of insolvency or bankruptcy or the entry of an order for relief
or the making of an order for its winding-up or dissolution or (ii) having
not been dismissed, discharged, stayed or restrained within thirty (30)
days.
"LIBO RATE" means, for any period and amount:
(i) The per annum rate for deposits in Yen for a term comparable to
such period which appears on the Telerate page 3750 as of 11:00
a.m. (London time) on the second London Banking Day prior to the
first day of such period; or
(ii) If such rate does not appear on the Telerate page 3750 at such
time, the arithmetic mean of the rates (expressed as a percentage
rounded up to the nearest one thousandth of one percent),
determined by the Purchaser to be the per annum rates at which
deposits in Yen are offered to ABN AMRO Bank, N.V., London
Branch, by two or more prime banks in the London interbank market
at or about 11:00 a.m. (London time) on the second London
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Banking Day prior to the first day of such period (for delivery
on the first day of such period) for a term comparable to such
period and in an amount approximately equal to such amount.
"LONDON BANKING DAY" means a day on which commercial banks are open for
business (including dealing in foreign exchange and foreign currency
deposits) in London.
"LRC" has the meaning given to that term in CLAUSE (1) OF THE INTRODUCTORY
PARAGRAPH hereof.
"MATERIAL ADVERSE EFFECT" means in relation to any matter, event or
circumstance concerning the Seller, LRC or the Collection Agent (insofar as
Lam Research Co., Ltd. is the Collection Agent), a likely material adverse
effect on the ability of the person concerned to perform its obligations
under this Supplemental Agreement, the Assignment or any of the other
Transaction Documents.
"ORIGINAL FINANCIAL STATEMENTS OF THE SELLER" means the audited financial
statements of LRC for the financial year ended June 30, 1994 and the
unaudited interim financial statements of LRC for the financial quarter
ended December 31, 1994.
"PARTIAL ACCEPTANCE" means, for any Equipment, the acceptance by the End-
User of such Equipment in a manner which obligates the End-User to pay to
the Buyer an amount equal to a portion of the Face Amount of the Purchased
Receivable arising out of the sale of such Equipment to the Buyer.
"PAYMENT DATE" means, for the Purchased Receivable, the date or each of the
dates on which the Purchased Receivable is paid in full or in any part to
the Purchaser in immediately available funds.
"PERFECTION DOCUMENT" means, for the Purchased Receivable, a written notice
to the Buyer, duly executed by the Seller, notifying the Buyer of the
assignment by the Seller to the Purchaser of the Purchased Receivable, such
notice to be in the form of a document duly date-stamped (KAKUTEI HIZUKE)
by a notary public in accordance with Article 467 (1) and (2)
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of the Civil Code of Japan and in form and substance reasonably
satisfactory to the Purchaser.
"POTENTIAL TERMINATION EVENT" means any event or circumstance which, if it
continued after the giving of any notice, the expiration of any grace
period and/or the satisfaction of any other applicable conditions, would
become a Termination Event.
"PURCHASED RECEIVABLE" means each Receivable which is actually purchased by
the Purchaser pursuant to this Supplemental Agreement, other than any such
Receivable which is repurchased by the Seller pursuant to this Supplemental
Agreement.
"PURCHASE LIMIT" means the remainder of (i) one billion, four hundred
million Yen (Y1,400,000,000) (i.e. the "Purchase Limit" under the Existing
Receivables Agreement) minus (ii) one billion, two hundred million Yen
(Y1,200,000,000).
"PURCHASE ORDER" means, for any Equipment purchased by the Buyer, the
purchase order (or its equivalent regardless of whether it is titled as
such) for such Equipment duly executed and delivered to the Seller by the
Buyer, which shall specify the specification and the ordered quantity of,
and the payment terms for, such Equipment.
"PURCHASE PRICE" has the meaning given to that term in CLAUSE 4.1.
"PURCHASER" has the meaning given to that term in CLAUSE (4) OF THE
INTRODUCTORY PARAGRAPH hereof.
"QUICK ASSETS" means, at any date as of which the amount thereof is to be
determined, the consolidated cash, cash-equivalents, accounts receivable,
and marketable securities with maturities not to exceed 360 days, of LRC
and its subsidiaries determined in accordance with generally accepted
accounting principals.
"RECEIVABLE" has the meaning given to that term in RECITAL (C).
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"RECORDS" means all Sales Agreements, Purchase Orders, contracts, other
documents, books, records and other information maintained by the Seller
with respect to the Purchased Receivable.
"RELATED SECURITY" means, for the Purchased Receivable, (i) all of the
Seller's interest, if any, in the Equipment (including returned Equipment),
if any, the sale of which by the Seller gave rise to the Purchased
Receivable, (ii) all other encumbrances and property subject thereto from
time to time, if any, purporting to secure payment of the Purchased
Receivable, whether pursuant to the Sales Agreement relating to the
Purchased Receivable or otherwise and (iii) all guarantees, insurance or
other agreements or arrangements of any kind from time to time supporting
or securing payment of the Purchased Receivable whether pursuant to the
Sales Agreement relating to the Purchased Receivable or otherwise.
"REPURCHASE DISCOUNT AMOUNT" means, for the Purchased Receivable if it is
to be repurchased by the Seller, the product of (i) the Discount Amount for
the Purchased Receivable times (ii) a fraction (expressed as a percentage
rounded down to the nearest one thousandth of one percent), the numerator
of which is the number of days in the period commencing on the date of
repurchase and ending on the Tentative Due Date and the denominator of
which is the number of days in the Discount Period for the Purchased
Receivable.
"REPURCHASE DATE" has the meaning given to that term in CLAUSE 14.2.
"REPURCHASE PRICE" has the meaning given to that term in CLAUSE 14.3.
"REVISED FACE AMOUNT" means, for the Purchased Receivable related to
Equipment if Partial Acceptance has occurred, the amount in Yen which the
Seller and the Buyer have agreed upon following such Partial Acceptance as
the reduced amount payable by the Buyer on account of the Purchased
Receivable.
"SALES AGREEMENT" means the agreement (whether in writing or oral) between
the Seller and the Buyer with respect to a sale of Equipment governing the
terms and conditions of such
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sale (including the Purchase Order, if any, and all other agreements,
instruments and documents relating or ancillary thereto), as such agreement
may be amended or modified from time to time.
"SCHEDULED DUE DATE" means, for the Purchased Receivable, the date which is
confirmed or agreed between the Seller and the Buyer following the
Acceptance or Partial Acceptance by the Buyer of the related Equipment as
the date on which the Face Amount or the Revised Face Amount, as the case
may be, of the Purchased Receivable is unconditionally payable by the
Buyer.
"SELLER" has the meaning given to that term in CLAUSE (3) OF THE
INTRODUCTORY PARAGRAPH hereof.
"SHIPMENT" means, for any Equipment, the shipment by the Seller of such
Equipment to the Buyer in accordance with the relevant Sales Agreement, the
date of which shall be set forth in the Assignment.
"SUBORDINATED DEBT" means any debt subordinated to the obligations of the
Seller hereunder on terms acceptable to the Purchaser.
"TANGIBLE NET WORTH" means, at any date as of which the amount thereof is
to be determined, the consolidated total assets of LRC and its subsidiaries
MINUS, without duplication, (i) the sum of any amounts attributable to (A)
goodwill, and (B) intangible items such as unamortized debt discount and
expense, patents, trade and service marks and names, copyrights,
franchises, treasury stock, deferred charges and research and development
expenses except prepaid expenses, AND (ii) Total Liabilities.
"TENTATIVE ACCEPTANCE DATE" means, for the Purchased Receivable, the date
which is agreed upon between the Seller and the Purchaser and set forth in
the Assignment as the date on which the Acceptance of the Equipment
relating to the Purchased Receivable is likely to occur, but shall in no
event be later than the date which is 270 days after the date of Shipment
of such Equipment as set forth in the Assignment.
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"TENTATIVE CREDIT PERIOD" means, for the Purchased Receivable, the period
commencing on the Tentative Acceptance Date for the Purchased Receivable
and ending on the Tentative Due Date for the Purchased Receivable.
"TENTATIVE DUE DATE" means, for the Purchased Receivable, the date which is
agreed upon between the Seller and the Purchaser (based upon the payment
terms provided in the Sales Agreement for the Equipment relating to the
Purchased Receivable) and set forth in the Assignment as the date on which
the Payment Date for the Purchased Receivable is likely to occur, but shall
in no event be later than the date which is 225 days after the date of
Acceptance or Partial Acceptance, as the case may be, of such Equipment.
"TERMINATION EVENTS" means those events and conditions set forth in the
FOURTH SCHEDULE.
"TOTAL DEBT" means, at any date as of which the amount thereof is to be
determined, the sum of (i) short-term bank debt, (ii) current maturities of
long-term debt and current portion of capitalized leases, (iii) long term
debt, (iv) capitalized leases and (v) all off-balance sheet obligations
including Contingent Obligations and the face amount of all outstanding
letters of credit (including drawn and unreimbursed amounts).
"TOTAL LIABILITIES" means, at any date as of which the amount thereof is to
be determined, all obligations that should, in accordance with generally
accepted accounting principals be classified as liabilities on the
consolidated balance sheet of LRC.
"TRANSACTION DOCUMENTS" means this Supplemental Agreement, the Assignment,
the Guaranty and all other agreements and documents entered into pursuant
to this Supplemental Agreement or in connection with this Supplemental
Agreement or the transactions contemplated hereby.
1.2 In this Supplemental Agreement:
"business day" means any day (other than a Saturday or a Sunday) on which
banks are open for business in San Francisco, London and Tokyo;
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a "Clause", "Part", "Recital" or "Schedule" is, subject to any contrary
indication, a reference to a clause or part hereof or a recital or schedule
hereto;
an "encumbrance" shall be construed as a reference to a mortgage, charge,
pledge, security interest, lien or other encumbrance securing any
obligation of any person or any other type of preferential arrangement
(including, without limitation, title transfer and retention arrangements)
having a similar effect;
a "person" shall be construed as a reference to any person, firm, company,
corporation, government, state or agency of a state or any association or
partnership (whether or not having separate legal personality) or two or
more of the foregoing;
"stamp duty" shall be construed as a reference to any stamp, registration
or to the transaction or documentary tax (including, without limitation any
penalty or interest payable in connection with any failure to pay or any
delay in paying any of the same);
"tax" shall be construed so as to include any tax, levy, impost, duty or
other charge of a similar nature (including, without limitation, any
penalty or interest payable in connection with any failure to pay or any
delay in paying any of the same); and
the "rehabilitation", "bankruptcy", "dissolution", "insolvency",
"liquidation", "receivership" or "winding-up" of any person shall be
construed so as to include any equivalent or analogous proceedings under
the laws of the jurisdiction in which such person is incorporated (or, if
not a company or corporation, domiciled) or any jurisdiction in which such
person carries on business.
1.3 "Y" and "Yen" denote lawful currency of Japan.
1.4 Save where the contrary is indicated, any reference in this
Supplemental Agreement to:
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(i) this Supplemental Agreement or any other agreement or document
shall be construed as a reference to this Supplemental Agreement,
or, as the case may be, such other agreement or document as the
same may have been, or may from time to time be, amended, varied,
novated or supplemented;
(ii) a statute shall be construed as a reference to such statute as
the same may have been, or may from time to time be, amended or
re-enacted; and
(iii) all calculations of interest shall be made on the basis of a year
of 360 days for actual days elapsed.
1.5 Clause, Part and Schedule headings are for ease of reference only.
1.6 The Seller is acting as the Seller and the Collection Agent under this
Supplemental Agreement and the other Transaction Documents. All references in
this Supplemental Agreement and the other Transaction Documents to the Seller
shall, where the context so permits, be deemed to be a reference to the Seller
acting in each of these capacities.
PART 2
GENERAL PROVISIONS FOR SALE OF RECEIVABLE
2. TERMS OF PURCHASE
2.1 Subject to the terms and conditions set forth herein, the Seller will
sell, and the Purchaser will purchase, the Receivable, PROVIDED THAT the
Purchase Price paid by the Purchaser for the Receivable does not exceed the
Purchase Limit.
2.2 The sale referred to in PART 3 does not constitute and is not
intended to result in the creation or assumption by the Purchaser of any
obligation of the Seller or any other person in connection with the Receivable
or the Sales Agreements, or under any other agreement or instrument relating
thereto.
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2.3 The parties hereto intend that the transactions contemplated by this
Supplemental Agreement constitute a sale and purchase of the Purchased
Receivable. In the event that any court, any other governmental authority or
any other person should construe such transactions as a loan, the parties intend
that such loan constitute a secured loan and, in furtherance of such intent, the
Seller hereby grants to the Purchaser, as security for all obligations of the
Seller under this Supplemental Agreement and the other Transaction Documents, a
security interest in all right, title and interest of the Seller in and to the
Purchased Receivable, all Collections thereof, all Related Security therefor and
all Records relating thereto, whether now owned or hereafter acquired by the
Seller.
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PART 3
SALE OF RECEIVABLE
3. SALE AND PURCHASE
3.1 Subject to the terms and conditions of this Supplemental Agreement,
the Seller hereby agrees to sell on the Closing Date, and the Purchaser agrees
to purchase on such date, all of the Seller's right, title and interest in, to
and under the Receivable including for the avoidance of doubt:
(i) the right to receive all Collections in respect thereof;
(ii) all Related Security with respect to the Receivable and all
proceeds thereof; and
(iii) all Records relating to the Receivable.
3.2 The sale and purchase of the Receivable referred to in CLAUSE 3.1
shall be effected by the completion, execution and delivery of the Assignment.
4. CONSIDERATION
4.1 Subject to adjustment as provided in CLAUSES 6, 7 AND 8, the
consideration payable by the Purchaser for the sale and purchase of the
Purchased Receivable shall be an amount in Yen equal to the Face Amount of the
Purchased Receivable minus the Discount Amount for the Purchased Receivable (the
"PURCHASE PRICE"). The Purchase Price shall be payable in accordance with
CLAUSE 5.1.
5. CLOSING
5.1 Completion of the sale and purchase contemplated by CLAUSE 3.1 shall
take place on the Closing Date (subject to the satisfaction of the conditions
precedent set out in the SECOND SCHEDULE), whereupon:
(i) the Seller shall assign to the Purchaser the Receivable, by the
Seller and the Purchaser
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executing and delivering to the other the Assignment;
(ii) the Seller shall deliver the Sales Agreements to the Purchaser;
(iii) if a promissory note has been issued by the Buyer in favor of the
Seller for the payment of the Receivable, the Seller shall make
endorsement without recourse (mutanpo uragaki) on such promissory
note in favor of the Purchaser and deliver such promissory note
to or to the order of the Purchaser; and
(iv) the Purchaser shall pay the Purchase Price of the Receivable to
the Seller in accordance with CLAUSE 22.1.
PART 4
ADJUSTMENT OF CONSIDERATION
6. ADJUSTMENT AFTER DETERMINATION OF SCHEDULED DUE DATE
6.1 SCHEDULED DUE DATE AFTER TENTATIVE DUE DATE. Except as otherwise
provided in CLAUSE 8.2(ii)(A), if the Seller and the Buyer agree upon the
Scheduled Due Date for the Purchased Receivable prior to the payment of the
Purchased Receivable and such Scheduled Due Date is AFTER the Tentative Due Date
for the Purchased Receivable, then the Seller shall pay to the Purchaser on the
Scheduled Due Date, as a reduction of the Purchase Price for the Purchased
Receivable, the Funded Interest Amount for the Purchased Receivable.
6.2 SCHEDULED DUE DATE PRIOR TO TENTATIVE DUE DATE. If the Seller and the
Buyer agree upon the Scheduled Due Date for the Purchased Receivable prior to
the payment of the Purchased Receivable, such Scheduled Due Date is PRIOR to the
Tentative Due Date for the Purchased Receivable and the Buyer pays the Purchased
Receivable on a day other than the Tentative Due Date, then the Purchaser and
the Seller shall make payments to each other as provided in CLAUSE 8.1 below in
the same manner as though the Scheduled Due Date had not been set.
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7. ADJUSTMENT AFTER PARTIAL ACCEPTANCE
7.1 If the Seller and the Buyer agree upon the Revised Face Amount of the
Purchased Receivable after a Partial Acceptance of the related Equipment, then
the Seller shall pay to the Purchaser on the Tentative Due Date, as a reduction
of the Purchase Price for the Purchased Receivable, an amount equal to the
difference between the Face Amount and the Revised Face Amount of the Purchased
Receivable.
8. ADJUSTMENT AFTER PAYMENT
8.1 PAYMENT DATE PRIOR TO DETERMINATION OF SCHEDULED DUE DATE. If the
Buyer pays the Purchased Receivable before the Seller and the Buyer agree upon
the Scheduled Due Date for the Purchased Receivable and such payment is made on
a day other than the Tentative Due Date, then the Purchaser and the Seller shall
make payments to each other as follows:
(i) PAYMENT DATE PRIOR TO TENTATIVE DUE DATE. If the Purchased
Receivable is paid prior to the Tentative Due Date, then the
Purchaser shall pay to the Seller on the Payment Date, as an
increase in the Purchase Price for the Purchased Receivable, the
Discount Reduction Amount for the Purchased Receivable. (In
addition, the Seller shall pay to the Purchaser on the Payment
Date all amounts, if any, payable by the Seller pursuant to
CLAUSE 15.1 as a result of the Purchased Receivable being paid
prior to the Tentative Due Date.)
(ii) PAYMENT DATE AFTER TENTATIVE DUE DATE. If the Purchased
Receivable is paid after the Tentative Due Date, then the Seller
shall pay to the Purchaser on the Payment Date, as a reduction of
the Purchase Price for the Purchased Receivable, an amount equal
to the interest which would have accrued on the Face Amount of
the Purchased Receivable from the Tentative Due Date through the
Payment Date at the Daily Rate in effect from time to time during
such period.
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8.2 PAYMENT DATE AFTER DETERMINATION OF SCHEDULED DUE DATE. If the Buyer
pays the Purchased Receivable after the Seller and the Buyer agree upon the
Scheduled Due Date for the Purchased Receivable, then the Purchaser and the
Seller shall make payments to each other as follows:
(i) SCHEDULED DUE DATE PRIOR TO TENTATIVE DUE DATE. If the
Scheduled Due Date is prior to the Tentative Due Date and such
payment is made on a day other than the Tentative Due Date, then
the Purchaser and the Seller shall make payments to each other as
provided in CLAUSE 8.1 above in the same manner as though the
Scheduled Due Date had not been set.
(ii) SCHEDULED DUE DATE AFTER TENTATIVE DUE DATE. If the Scheduled
Due Date is after the Tentative Due Date and such payment is made
on a day other than the Scheduled Due Date, then the Purchaser
and the Seller shall make payments to each other as follows:
(A) PAYMENT DATE PRIOR TO SCHEDULED DUE DATE. If the Purchased
Receivable is paid prior to the Scheduled Due Date, then the
Seller shall pay to the Purchaser on the Payment Date (in
lieu of the amount which otherwise would have been payable
by the Seller to the Purchaser on the Scheduled Due Date
pursuant to CLAUSE 6.1), as a reduction of the Purchase
Price for the Purchased Receivable, the Funded Interest
Accrued Amount. (In addition, the Seller shall pay to the
Purchaser on the Payment Date all amounts, if any, payable
by the Seller pursuant to CLAUSE 15.1 as a result of the
Purchased Receivable being paid prior to the Scheduled Due
Date.)
(B) PAYMENT DATE AFTER SCHEDULED DUE DATE. If the Purchased
Receivable is paid after the Scheduled Due Date, then the
Seller shall pay to the Purchaser on the Payment Date (in
addition to the amount which is payable by the Seller to the
Purchaser on the Scheduled
18
Due Date pursuant to CLAUSE 6.1), as a reduction of the
Purchase Price for the Purchased Receivable, an amount equal
to the interest which would have accrued on the Face Amount
of the Purchased Receivable from the Scheduled Due Date
through the Payment Date at the Daily Rate in effect from
time to time during such period.
PART 5
REPRESENTATIONS, WARRANTIES AND COVENANTS
9. REPRESENTATIONS AND WARRANTIES
9.1 As of the date hereof, the Closing Date and each day on which the
Purchased Receivable is outstanding until the Scheduled Due Date has been
determined for the Purchased Receivable and 60 days have passed after the
Scheduled Due Date, the Seller represents and warrants to the Purchaser as
follows with respect to the Receivable:
(i) The Receivable is an obligation of the Buyer to the Seller which
arose from the sale by the Seller to the Buyer of Equipment in
the ordinary course of the Seller's business.
(ii) The Receivable is payable in Yen in the Face Amount set forth for
such Receivable in the Assignment.
(iii) The Receivable is not overdue.
(iv) The Receivable is a debt, the rights in which can be transferred
by way of sale and assignment to the Purchaser pursuant to this
Supplemental Agreement.
(v) The Receivable is legally and beneficially owned by the Seller
or, after the sale to the Purchaser hereunder, by the Purchaser,
free and clear of any liens, or other encumbrances exercisable
against the Seller or the Purchaser.
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(vi) The Receivable is not subject to withholding taxes.
(vii) The Receivable was created in compliance with all applicable laws
and with all required consents, approvals and authorizations.
(viii) Subject to the terms and conditions of the relevant Sales
Agreement, the Receivable constitutes a legal, valid, binding and
enforceable obligation of the Buyer to pay the full Face Amount
of the Receivable set forth in the Assignment, subject only to
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the rights of creditors generally
and are not subject to any defense, dispute, set-off,
counterclaim or discount.
(ix) The sale and assignment of the Receivable will not violate any
law or any agreement by which the Seller or any of its assets may
be bound. Without limiting the generality of the foregoing, the
sale and assignment of the Receivable does not require the
consent or approval of the Buyer or any other person.
(x) The Seller has, in all material respects, performed all of its
obligations under and complied with all of the terms of the Sales
Agreements relating to the Equipment, the sale of which gave rise
to the Receivable (except for any obligations not required to be
performed or any terms not required to be complied with prior to
the effective date of any such representation and warranty).
Shipment of the Equipment relating to the Receivable occurred on
the date set forth in the Assignment.
(xi) The assignment of the Receivable in the manner herein
contemplated is effective to pass to the Purchaser full and
unencumbered title thereto and the benefit thereof and no further
act, condition
20
or thing is required to be done in connection therewith to enable
the Purchaser to require payment of the Receivable or the
enforcement of any such right in the courts of the United States
or Japan, other than (A) the due performance by the Seller of the
terms and conditions of the relevant Sales Agreement and (B) the
filing of a Uniform Commercial Code financing statement.
(xii) The governing law of the Sales Agreement relating to the
Receivable is California or Japanese law.
9.2 As of the date hereof, the Closing Date and each day on which the
Purchased Receivable is outstanding until the Scheduled Due Date has been
determined for the Purchased Receivable and 60 days have passed after the
Scheduled Due Date, the Seller represents and warrants to the Purchaser that
each of the statements set forth in the FIFTH SCHEDULE is true, by reference to
the facts and circumstances existing at the relevant time.
10. FINANCIAL INFORMATION
10.1 LRC shall, until the date which is 60 days after the Scheduled Due
Date following the determination of the Scheduled Due Date for the Purchased
Receivable:
(i) within 100 days after the end of each of its financial years,
deliver to the Purchaser its financial statements for such
financial year; and
(ii) within 55 days after the end of each of its financial quarters,
deliver to the Purchaser its financial statements for such
financial quarter.
10.2 LRC shall ensure that:
(i) each set of financial statements delivered by it pursuant to
CLAUSE 10.1(I) is prepared in accordance with accounting
principles generally accepted in the United States and
consistently applied (except for changes disclosed therein);
(ii) each set of financial statements delivered by it pursuant to
CLAUSE 10.1(I) has been audited by an
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internationally recognized firm of independent auditors;
(iii) each set of financial statements delivered by it pursuant to
CLAUSE 10.1(I) is accompanied by an unqualified opinion of the
firm of independent auditors which audited such financial
statements; and
(iv) each set of quarterly financial statements delivered by it
pursuant to CLAUSE 10.1(II) is prepared in accordance with
accounting principles generally accepted in the United States and
consistently applied (except for changes disclosed therein).
11. SELLER'S COVENANTS
11.1 The Seller shall, until the date which is 60 days after the Scheduled
Due Date following the determination of the Scheduled Due Date for all of the
Purchased Receivable:
(i) obtain, comply in all material respects with the terms of and do
all that is necessary and reasonably practicable to maintain in
full force and effect all authorizations, approvals, licenses and
consents required in or by the laws and regulations of the United
States and Japan to enable it lawfully to enter into and perform
its obligations under this Supplemental Agreement and the
Assignment from time to time in respect of the Purchased
Receivable or to ensure the legality, validity, enforceability
against the Seller or admissibility in evidence in the United
States and Japan of this Supplemental Agreement or the
Assignment;
(ii) ensure that at all times the claims against it under this
Supplemental Agreement rank at least pari passu with the claims
of all its other unsecured creditors save those whose claims are
preferred by any bankruptcy, insolvency or other similar laws of
general application;
22
(iii) permit audit and inspection under its guidance of its Records by
or on behalf of the Purchaser during normal working hours upon
reasonable notice and with reasonable frequency;
(iv) maintain sufficient operating procedures to manage the
transactions contemplated herein and to perform its obligations
hereunder;
(v) (without prejudice to CLAUSE 13.1) indemnify the Purchaser from
and against all liabilities, losses and fees, costs and expenses
in respect of any breach by the Seller of the representations and
warranties made by it pursuant to the terms of CLAUSE 9;
(vi) furnish to the Purchaser sufficient copies of such other
information relating to its business as may be reasonably
requested in writing by the Purchaser in order to enable it to
carry out its functions hereunder;
(vii) do all things necessary to remain duly organized, validly
existing and in good standing under the laws of Delaware and
maintain all requisite authority to conduct its business in
Japan;
(viii) comply in all respects which could be regarded as material in the
context of the transactions contemplated by this Supplemental
Agreement, with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be
subject;
(ix) if a promissory note is issued for the payment of the Purchased
Receivable by the Buyer in favor of the Seller, promptly notify
the Purchaser thereof and make endorsement without recourse
(mutanpo uragaki) on such promissory note and deliver, or cause
to be delivered, such promissory note to or to the order of the
Purchaser;
(x) give the Purchaser notice of any material change to its
administrative and operating procedures in
23
relation to the keeping and maintaining of Records;
(xi) at its expense, in a timely manner fully perform and comply with
all provisions, covenants and other promises required to be
observed by it under the Sales Agreements related to the
Purchased Receivable as if interests in the Purchased Receivable
had not been assigned and sold hereunder;
(xii) promptly after it becomes aware of the occurrence of any
Termination Event or Potential Termination Event, notify the
Purchaser thereof;
(xiii) promptly after it becomes aware of the Acceptance or Partial
Acceptance of any Equipment, the Revised Face Amount of the
Purchased Receivable or the Scheduled Due Date for the Purchased
Receivable, notify the Purchaser thereof;
(xiv) promptly after it becomes aware of any event or condition
relating to the Purchased Receivable set forth in CLAUSE 14.1,
notify the Purchaser thereof; and
(xv) cooperate with the Purchaser and execute and deliver to the
Purchaser such other instruments and documents and take such
other actions as may be reasonably requested from time to time in
order to carry out, evidence and confirm the Purchaser's rights
and the intended purpose of this Supplemental Agreement,
including, but not limited to, perfecting, protecting or
evidencing the Purchaser's right and interest in or to the
Purchased Receivable.
11.2 The Seller shall not, until the date which is 60 days after the
Scheduled Due Date following the determination of the Scheduled Due Date:
(i) sell, assign, convey, transfer, lease or otherwise dispose of the
Purchased Receivable other than
24
pursuant hereto, or attempt, purport or agree to do any of the
foregoing;
(ii) cancel, terminate, amend, modify or waive any material term or
condition of any Sales Agreement relating to Purchased
Receivable, except insofar as the provisions contained in CLAUSES
7, 13 AND 14 are complied with by the Seller;
(iii) compromise or settle any dispute or claim in respect of the
Purchased Receivable;
(iv) take any action which is reasonably likely to prejudice the
validity or recoverability of the Purchased Receivable;
(v) seek to challenge the validity of any sale of Receivable in any
legal proceedings; or
(vi) do anything which would materially and adversely affect the
interests of the Purchaser hereunder or the maintenance by the
Purchaser of any licenses, exemptions, authorizations or consents
necessary in connection with this Supplemental Agreement or the
transactions contemplated hereby.
11.3 To assure the Purchaser of its ability to perform its obligations
under this Supplemental Agreement and the other Transaction Documents, LRC
agrees that, until the date which is 60 days after the Scheduled Due Date
following the determination of the Scheduled Due Date, it also shall:
(i) maintain, at all times, a ratio of Quick Assets to Current
Liabilities of at least 1.25 to 1.00;
(ii) maintain, at all times, Tangible Net Worth of not less than
$250,000,000; and
(iii) maintain, at all times, a ratio of Total Debt LESS Subordinated
Debt to Capital of no more than 0.50 to 1.00.
12. PURCHASER'S COVENANTS
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12.1 The Purchaser shall obtain, comply with the terms of and do all that
is necessary to maintain in full force and effect all authorizations, approvals,
licenses and consents required in or by the laws and regulations of the United
States and Japan to enable it lawfully to enter into and perform its obligations
under this Supplemental Agreement or to ensure the legality, validity,
enforceability or admissibility in evidence in the United States and Japan of
this Supplemental Agreement or of the Assignment pursuant to the terms of this
Supplemental Agreement.
13. SELLER'S INDEMNITY
13.1 Without limiting any other rights which the Purchaser may have
hereunder or under applicable law, the Seller hereby agrees to indemnify the
Purchaser and its officers, directors, agents and employees from and against any
and all damages, losses, claims, liabilities, costs and expenses, including,
without limitation reasonable attorneys' fees and disbursements including any
tax thereon (all of the foregoing being collectively referred to as "INDEMNIFIED
AMOUNTS") awarded against or incurred by any of them in connection with this
Supplemental Agreement, or the acquisition of an interest by the Purchaser in
the Purchased Receivable, as a result of any breach by the Seller of any
representation, warranty or covenant made or deemed to be made hereunder or in
connection herewith or the transactions contemplated hereby, excluding, however,
Indemnified Amounts to the extent that a final judgment of a court of competent
jurisdiction holds that such Indemnified Amounts resulted from the gross
negligence or wilful misconduct on the part of the Purchaser. Without limiting
the generality of the foregoing (and without prejudice to CLAUSE 14), the Seller
shall indemnify, to the extent not indemnified as a result of the operation of
CLAUSE 14.4, the Purchaser for Indemnified Amounts relating to or resulting
from:
(i) the sale and assignment to the Purchaser hereunder of any
Receivable for which any representation and warranty set forth in
CLAUSE 9.1 is incorrect;
(ii) reliance on any representation or warranty made by the Seller or
any officer of the Seller under or in connection with this
Supplemental Agreement or any of the other Transaction Documents
or any
26
other material information or report delivered by the Seller or
any officer of the Seller which shall have been false, incorrect
or omitting of any material fact at the time made or deemed made;
(iii) the failure by the Seller or any officer of the Seller to comply
with any applicable law, rule or regulation with respect to the
Purchased Receivable or the related Sales Agreement or the
non-conformity of the Purchased Receivable or the related Sales
Agreement with any such applicable law, rule or regulation;
(iv) the failure to vest and maintain in the Purchaser the Purchased
Receivable free and clear of any encumbrance;
(v) any dispute, claim, offset or defense of the Buyer to the payment
of the Purchased Receivable, including, without limitation, a
defense based on such Receivable or the related Sales Agreement
not being a legal, valid and binding obligation of such Buyer
enforceable against it in accordance with its terms, any defect
in the Equipment which has been sold under the Sales Agreement or
the failure by the Seller to perform any obligations related to
such related Sales Agreement under any applicable laws, rules or
regulations;
(vi) any failure of the Seller or LRC to perform its duties or
obligations in accordance with the provisions of this
Supplemental Agreement and the other Transaction Documents;
(vii) any disclosure of information regarding the Buyer by the Seller
to the Purchaser or the supply of any Sales Agreements, Records
and all other related documents to the Purchaser; and
(viii) any claim arising from collection activities conducted by the
Seller.
PART 6
27
REPURCHASE OF RECEIVABLE
14. REPURCHASE OF RECEIVABLE
14.1 The Seller shall, upon the request of the Purchaser, repurchase the
Purchased Receivable if any of the following events or conditions relating to
the Purchased Receivable shall occur or exist:
(i) the obligation of the Buyer to pay the Face Amount or, if
applicable, the Revised Face Amount of the Purchased Receivable
or any other obligation of the Buyer under the related Sales
Agreement is, or the Buyer claims that such obligation is, not
enforceable in full by the Purchaser in accordance with the terms
of the related Sales Agreement for any reason whatsoever,
including, but not limited to, any asserted defense of the Buyer
to such obligation;
(ii) any representation or warranty set forth in the Assignment or in
CLAUSE 9.1 is incorrect with respect to the Purchased Receivable;
(iii) the Seller fails, or the Buyer claims that the Seller has failed,
to comply with any applicable law, rule or regulation with
respect to the Purchased Receivable or the related Sales
Agreement or Equipment;
(iv) the Seller fails or is unable, or the Buyer claims that the
Seller has failed or is unable, to perform any of its obligations
under the related Sales Agreement for the Purchased Receivable;
(v) the Seller fails to perform any of its obligations under this
Supplemental Agreement, the Assignment or any of the other
Transactions Documents with respect to the Purchased Receivable;
(vi) without limiting the scope of any of the foregoing, either (A)
the Seller and the Buyer determine at any time that Acceptance or
Partial
28
Acceptance of the Equipment relating to the Purchased
Receivable will not occur on or before the date which is 270
days after the date of Shipment of such Equipment or (B) the
Acceptance or Partial Acceptance of the Equipment relating to
the Purchased Receivable does not occur on or before the date
which is 270 days after the date of Shipment of such Equipment;
(vii) without limiting the scope of any of the foregoing, either (A)
the Seller and the Buyer fail to agree upon the Scheduled Due
Date for the Purchased Receivable prior to the Tentative
Acceptance Date or (B) the Seller and the Buyer agree upon a
Scheduled Due Date which is more than 225 days after the date of
Acceptance or Partial Acceptance of the Equipment relating to the
Purchased Receivable; or
(viii) without limiting the scope of any of the foregoing, the Buyer
fails for any reason to pay the full Face Amount, or, if
applicable, the Revised Face Value, of the Purchased Receivable
on or before the date which is 60 days after the Scheduled Due
Date for the Purchased Receivable.
14.2 Completion of any repurchase contemplated by CLAUSE 14.1 shall take
place on a business day (the "REPURCHASE DATE") which is not more than five
business days after the date the Purchaser delivers to the Seller a written
request for such repurchase pursuant to CLAUSE 14.1, whereupon:
(i) The Seller shall pay to the Purchaser the Repurchase Price
(calculated as provided in CLAUSE 14.3) for the Purchased
Receivable to be repurchased;
(ii) the Purchaser shall re-assign to the Seller or its designee the
Purchased Receivable (at the cost of the Seller and without
recourse or warranty, except for the warranty expressly given in
the assignment, on the part of the Purchaser), by the Purchaser
and the Seller executing and delivering to the other an
assignment for the Purchased
29
Receivable substantially in the form of PART 2 OF THE THIRD
SCHEDULE;
(iii) the Purchaser shall deliver to the Seller (or its designee) the
relevant Sales Agreement to the Seller (or its designee); and
(iv) if a promissory note has been issued by the Buyer in favor of the
Seller for the payment of any of the Receivable and such
promissory note has been endorsed and delivered to the Purchaser,
the Purchaser shall make endorsement without recourse (mutanpo
uragaki) on such promissory note in favor of the Seller and
deliver such promissory note to or to the order of the Seller;
and
(v) take all such other steps and comply with all such other
formalities as the Seller may reasonably request to perfect or
more fully to evidence or secure the Seller's (or its designee's)
title to the Purchased Receivable, including, where appropriate,
by giving notice of such reassignment to the Buyer.
14.3 The consideration payable by the Seller for the repurchase of the
Purchased Receivable which is to be repurchased pursuant to CLAUSE 14.1 shall be
an amount in Yen (the "REPURCHASE PRICE") determined as follows:
(i) If the Repurchase Date occurs PRIOR to the Tentative Due Date for
the Purchased Receivable, whether or not the Scheduled Due Date
for the Purchased Receivable has been set, then the Seller shall
pay a Repurchase Price equal to the sum of (A) the Purchase Price
for the Purchased Receivable plus (B) the product of (1) the
Discount Amount for the Purchased Receivable times (2) a fraction
(expressed as a percentage rounded up to the nearest one
thousandth of one percent), the numerator of which is the number
of days in the period commencing on the Closing Date and ending
on the Repurchase Date and the denominator of which is the number
of days in the Discount Period.
30
(ii) If the Scheduled Due Date HAS NOT been set PRIOR to the
Repurchase Date and the Repurchase Date occurs AFTER the
Tentative Due Date for the Purchased Receivable, then the Seller
shall pay a Repurchase Price equal to the sum of (A) the Face
Amount of the Purchased Receivable plus (B) an amount equal to
the interest which would have accrued on such Face Amount from
the Tentative Due Date through the Repurchase Date at the Daily
Rate in effect from time to time during such period.
(iii) If the Scheduled Due Date HAS been set PRIOR to the Repurchase
Date and the Repurchase Date occurs AFTER the Tentative Due Date
but BEFORE the Scheduled Due Date for the Purchased Receivable,
then the Seller shall pay a Repurchase Price equal to the sum of
(A) the Face Amount of the Purchased Receivable plus (B) the
Funded Interest Accrued Amount.
(iv) If the Scheduled Due Date HAS been set PRIOR to the Repurchase
Date and the Repurchase Date occurs AFTER the Tentative Due Date
and AFTER the Scheduled Due Date for the Purchased Receivable,
then the Seller shall pay a Repurchase Price equal to the sum of
(A) the Face Amount of the Purchased Receivable, plus (B) the
Funded Interest Amount for the Purchased Receivable plus (C) an
amount equal to the interest which would have accrued on the Face
Amount from the Scheduled Due Date through the Repurchase Date at
the Daily Rate in effect from time to time during such period.
In addition to the Repurchase Price payable by the Seller to the Purchaser on
any Repurchase Date in connection with the repurchase of any purchased
Receivable hereunder, the Seller shall pay to the Purchaser on such Repurchase
Date all amounts, if any, payable by the Seller pursuant to CLAUSE 15.1 as a
result of such repurchase.
PART 7
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INDEMNITY FOR FUNDING LOSSES
15. INDEMNITY BY THE SELLER FOR FUNDING LOSSES
15.1 In addition to other amounts payable by the Seller hereunder, the
Seller shall reimburse the Purchaser on demand for any resulting loss or expense
incurred by it, including (without limitation) any loss incurred in obtaining,
liquidating or redeploying deposits from third parties, PROVIDED THAT the
Purchaser shall have delivered to the Seller a certificate as to the amount of
such loss or expense setting out in reasonable detail the calculations resulting
in such amount, which certificate shall be conclusive in the absence of manifest
error, if:
(i) the Purchased Receivable is paid or repurchased prior to the
Tentative Due Date for the Purchased Receivable, whether or not
the Scheduled Due Date for the Purchased Receivable has been set;
(ii) the Purchased Receivable is paid or repurchased prior the
Scheduled Due Date for the Purchased Receivable, if the Scheduled
Due Date for the Purchased Receivable has been set; or
(iii) the Seller fails to sell any of the Receivable to the Purchaser
on the Closing Date (or on any date designated by the Seller as
the Closing Date) in accordance with CLAUSE 5.1 or the
Assignment, whether by reason of non-fulfillment of any of the
conditions set out in the SECOND SCHEDULE or otherwise.
PART 8
COLLECTION OF RECEIVABLE
16. APPOINTMENT OF COLLECTION AGENT
16.1 Lam Research Co., Ltd. is hereby appointed by the Purchaser as its
agent to service, collect and administer all Purchased Receivable, to perform
all related functions and to enforce the Purchaser's rights and interests in and
under the
32
Purchased Receivable, and Lam Research Co., Ltd. hereby accepts such appointment
as Collection Agent on the terms and subject to the conditions of this
Supplemental Agreement.
16.2 The Purchaser may at any time after the occurrence of a Termination
Event as provided in CLAUSE 19, remove Lam Research Co., Ltd. as Collection
Agent.
16.3 Upon Lam Research Co., Ltd. being removed as Collection Agent pursuant
to CLAUSE 19, the Purchaser may appoint a successor to act as Collection Agent
and shall forthwith notify the other parties hereto thereof, whereupon the
parties hereto and such successor shall, upon such successor confirming in
writing to the Purchaser that it agrees so to act, thereafter have the same
rights and obligations among them as would have been the case had they then
entered into an agreement in the form mutatis mutandis of this Supplemental
Agreement.
16.4 For the avoidance of doubt, it is hereby agreed that the Collection
Agent is not authorized to enter into any commitment on behalf of the Purchaser.
16.5 The Collection Agent hereby covenants and undertakes with the
Purchaser as set out in the SIXTH SCHEDULE.
16.6 The Collection Agent agrees to indemnify the Purchaser, including its
officers, directors and employees from and against any liability, loss, expense,
action, proceeding or claim which may be brought against, or suffered or
sustained, by the Purchaser, and/or such directors, officers and employees by
reason of any wrongful or negligent acts or omissions of the Collection Agent or
any of its directors, officers, employees or agents in the performance of its
duties hereunder.
17. COLLECTION OF RECEIVABLE
17.1 Save as otherwise provided herein, the proceeds of the Purchased
Receivable will, when paid, be collected by the Collection Agent.
17.2 The Collection Agent shall cause the Buyer to make payment in respect
of the Purchased Receivable into an account of the Collection Agent in Tokyo
(or, if a Termination Event has occurred and the Purchaser so directs, into an
account of the
33
Purchaser in Tokyo), PROVIDED THAT, if a promissory note has been issued for the
payment of a Purchased Receivable by the Buyer in favor of the Seller and
delivered to or to the order of the Purchaser in accordance herewith, the
Purchaser may collect on its behalf the amount represented by such promissory
note.
17.3 The Collection Agent shall, as soon as practically possible, pay any
Collection collected by the Collection Agent with respect to a Purchased
Receivable over to the Purchaser in accordance with PART 9.
17.4 If, at any time the Collection Agent receives any Collections in
respect of the Purchased Receivable and the authority of the Collection Agent to
collect such Receivable has been terminated in accordance with this Supplemental
Agreement, then the Collection Agent shall pay such amount to the credit of such
account in Tokyo as the Purchaser may specify, in each case for value the same
day.
17.5 Any amounts in respect of the collection proceeds of the Purchased
Receivable received by the Collection Agent (whether or not the appointment of
the Collection Agent has been terminated hereunder) shall be held by the
Collection Agent in trust for the benefit of the Purchaser.
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18. COST, EXPENSES AND REMUNERATION
18.1 The Purchaser authorizes the Collection Agent on its behalf, and the
Collection Agent undertakes to incur reasonable costs, expenses and charges in
connection with the enforcement of the Purchased Receivable and/or the
Purchaser's rights and remedies in relation thereto, and it is agreed that
notwithstanding any provisions under any applicable laws, rules or regulations,
the Collection Agent shall have no recourse or claim for indemnification or
payment against the Purchaser in respect of such reasonable costs, expenses and
charges.
18.2 The Collection Agent is not entitled to any remuneration or indemnity
in respect of the performance of its duties under this Supplemental Agreement.
19. REMOVAL OR TERMINATION OF COLLECTION AGENT
19.1 If a Termination Event occurs, the Purchaser may at any time, without
prejudice to the Purchaser's other rights:
(i) by notice in writing to the Collection Agent terminate the
appointment of the Collection Agent under this Supplemental
Agreement and designate as a successor collection agent any
person to succeed the Collection Agent; and/or
(ii) notify the Buyer that all payments in respect of Purchased
Receivable shall be made to the Purchaser or a successor
collection agent.
19.2 On and after termination of the appointment of the Collection Agent
under this Supplemental Agreement pursuant to CLAUSE 19.1, all rights,
obligations (other than liability for breaches of this Supplemental Agreement by
the Collection Agent or liability in tort or for breach of trust (or other
fiduciary duty) on the part of the Collection Agent prior to such termination
and the Collection Agent's obligations under CLAUSE 19.3 with respect to the
performance of its duties hereunder), authority and power of the Collection
Agent under this Supplemental Agreement shall be terminated and of no further
effect and the Collection Agent shall not hold itself out in any way as the
agent of the Purchaser.
35
19.3 Upon termination of the appointment of the Collection Agent under this
Supplemental Agreement pursuant to CLAUSE 19.1, the Collection Agent shall
forthwith deliver to the Purchaser or as it shall direct the Records in its
possession or under its control relating to the affairs of or belonging to the
Purchaser and the Purchased Receivable and any other security therefor and any
moneys then held by the Collection Agent on behalf of the Purchaser and shall
take such action as the Purchaser may reasonably direct.
19.4 The appointment of the Collection Agent under this Supplemental
Agreement shall terminate (but without affecting any accrued rights and
liabilities hereunder) at such time as (i) the Purchaser has no further interest
in any of the Purchased Receivable and (ii) the Collection Agent is notified by
the Purchaser in accordance with CLAUSE 31 that such is the case.
19.5 If there is any change in the identity of the Collection Agent in
accordance with this Supplemental Agreement, the new Collection Agent, the
retiring Collection Agent and the Purchaser shall execute such documents and
take such actions as such new Collection Agent and the Purchaser may require for
the purpose of vesting in such new Collection Agent the rights and obligations
of the Collection Agent under this Supplemental Agreement and releasing the
retiring Collection Agent from its future obligations under this Supplemental
Agreement.
PART 9
PAYMENTS
20. CURRENCY OF ACCOUNT AND PAYMENT
20.1 Yen is the currency of account and payment for each and every sum at
any time due from any person hereunder, PROVIDED THAT:
(i) each payment in respect of costs and expenses shall be made in
the currency in which the same were incurred; and
36
(ii) each payment which is expressed herein to be payable in another
currency shall be made in that other currency.
20.2 If any sum due from a person (a "relevant person") under this
Supplemental Agreement or 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 the relevant person, (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 person shall indemnify and hold harmless the other
person to whom such sum is due from and 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 and
(b) the best rate or rates of exchange at which such other person is reasonably
able to 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. To the extent that the person to whom such payment is
due receives an amount in excess of the amount due to it under this Supplemental
Agreement, such person shall forthwith pay an amount equal to any such excess to
the relevant person.
20.3 All payments made by any person hereunder shall be made free and clear
of and without any deduction for or on account of any set-off or counterclaim.
21. PAYMENTS BY THE SELLER OR THE COLLECTION AGENT
21.1 On each date upon which this Supplemental Agreement requires an amount
to be paid by the Seller or the Collection Agent to the Purchaser hereunder, the
Seller or the Collection Agent (as the case may be) shall, save as expressly
provided otherwise herein, make the same available to the Purchaser:
(i) where such amount is denominated in Yen, by payment in Yen and in
immediately available funds to such account and bank in Tokyo as
the Purchaser shall have specified in writing for this purpose
37
at least two business days prior to such amount becoming payable;
or
(ii) where such amount is denominated in a currency other than Yen, by
payment in such currency and in immediately available, freely
transferable, cleared funds to such account with such bank in the
principal financial currency as the Purchaser shall have
specified in writing for this purpose.
22. PAYMENTS BY THE PURCHASER
22.1 On each date upon which this Supplemental Agreement requires an amount
to be paid to the Seller hereunder by the Purchaser, the Purchaser shall, save
as otherwise provided herein, make the same available to the Seller:
(i) where such amount is denominated in Yen, by payment in Yen and in
immediately available funds to the Seller at such account and
bank as the Seller shall have specified in writing for this
purpose; or
(ii) where such amount is denominated in a currency other than Yen, by
payment in such currency and in immediately available, freely
transferable, cleared funds to such account with such bank in the
principal financial centre of the country of such currency as the
Seller shall have specified in writing for this purpose.
38
PART 10
TAXES
23. TAXES
23.1 All payments to be made by or on behalf of the Seller or the
Collection Agent to the Purchaser under or pursuant to any of the provisions of
this Supplemental Agreement shall be made free and clear of and without
deduction for or on account of tax unless the Seller or the Collection Agent (as
the case may be) is required by any applicable law to make such payment subject
to the deduction or withholding of tax in which case the sum payable by the
Seller or the Collection Agent (as the case may be) in respect of which such
deduction or withholding is required to be made shall be increased to the extent
necessary to ensure that, after the making of such deduction or withholding
(including any additional deduction or withholding on such increased amount),
the Purchaser 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 had no such deduction or withholding been made or
required to be made.
23.2 If the Seller or the Collection Agent makes any payment to the
Purchaser under or pursuant to this Supplemental Agreement in respect of which
it is required to make any such deduction or withholding, the Seller or the
Collection Agent (as the case may be) shall deliver to the Purchaser as soon as
practicable a certificate of deduction of tax and/or a receipt or other evidence
issued by the relevant taxation or other authority demonstrating the payment to
such authority of all amounts so required to be deducted or withheld.
23.3 If an event occurs which would result in the Seller or the Collection
Agent becoming obliged to make any payment pursuant to this CLAUSE 23, then each
of the parties hereto shall in good faith use reasonable endeavors to take such
reasonable steps as may be open to it to mitigate or avoid the effects of such
event, PROVIDED THAT nothing in this CLAUSE 23.3 shall:
(i) oblige any party hereto to incur any costs or expenses or to take
or refrain from taking any action where in the reasonable opinion
of such
39
party to take or refrain from taking any action would be
prejudicial to its interests; or
(ii) oblige any party hereto to disclose any confidential information
relating to the organization of its affairs; or
(iii) interfere with the right of any party hereto to arrange its
internal affairs in whatever manner it thinks fit.
PART 11
TERMINATION
24. CONSEQUENCE OF A TERMINATION EVENT
24.1 Upon the occurrence of any Termination Event, other than the breach of
CLAUSE 11.3 or the occurrence of an Insolvency Event in relation to the Seller,
the Purchaser may, by notice to the Seller:
(i) terminate the obligation of the Purchaser to purchase any
Receivable;
(ii) require the Seller to repurchase immediately the Purchased
Receivable if the Scheduled Due Date has not been determined, in
which event the provisions contained in CLAUSES 14.2 TO 14.4
shall be applied MUTATIS MUTANDIS; and/or
(iii) exercise any and all other rights available to the Purchaser
under this Supplemental Agreement or any of the other Transaction
Documents or at law or in equity.
24.2 Upon the occurrence of any Insolvency Event in relation to the Seller,
automatically and without any notice to the Seller:
(i) the obligation of the Purchaser to purchase any Receivable shall
terminate;
40
(ii) the Seller shall repurchase immediately the Purchased Receivable
if the Scheduled Due Date has not been determined, in which event
the provisions contained in CLAUSES 14.2 TO 14.4 shall be applied
MUTATIS MUTANDIS; and/or
(iii) the Purchaser may exercise any and all other rights available to
the Purchaser under this Supplemental Agreement or any of the
other Transaction Documents or at law or in equity.
24.3 Upon the breach of CLAUSE 11.3, the Seller shall, upon the request of
the Purchaser, deliver to the Purchaser either (i) funds in an amount equal to
the Face Amount of the Purchased Receivable or (ii) a standby letter of credit
with a stated amount equal to the Face Amount of the Purchased Receivable.
(i) The Purchaser shall hold any funds delivered to it pursuant to
clause (i) of the first sentence of this CLAUSE 24.3 in an
interest bearing account in the name of the Seller as security
for the performance by the Seller of its obligations under this
Supplemental Agreement and the other Transaction Documents. The
Seller hereby grants to the Purchaser, as security for such
obligations, a security interest in such funds and such account
and agrees to perform such other actions as the Purchaser may
request to establish, perfect, maintain and protect such security
interest prior to the rights of others in such funds and such
account.
(ii) Any standby letter of credit delivered to the Purchaser pursuant
to clause (ii) of the first sentence of this CLAUSE 24.3 shall be
in a form and substance and issued by a bank acceptable to the
Purchaser. The Purchaser shall have the right to draw under any
such letter of credit for any amounts payable to the Purchaser
hereunder which are not paid to the Purchaser when due.
41
Upon the payment or repurchase of the Purchased Receivable and the satisfaction
by the Seller of all its obligations under this Supplemental Agreement and the
other Transaction Documents, the Purchaser shall (A) deliver to the Seller the
funds, if any, remaining in any account established pursuant to clause (i) above
or (B) return to the Seller any letter of credit delivered to the Purchaser
pursuant to clause (ii) above, if any amounts remain available for drawing
thereunder.
PART 12
MISCELLANEOUS
25. DEFAULT INTEREST AND INDEMNITY
25.1 If any sum due and payable by or on behalf of a party hereto (the
"Payer") to the other party (the "Payee") hereunder is not paid on the due date
therefor in accordance with the provisions hereof or if any sum due and payable
by the Payer under any judgment of any court in connection herewith is not paid
on the date of such judgment (the balance of such sum for the time being unpaid
being herein referred to as an "unpaid sum"), an unpaid sum shall bear interest
at the rate PER ANNUM which is equal to the Daily Rate plus two percent (2%),
such rate to change from time to time as the Daily Rate changes, for the period
beginning on, and including, such due date or, as the case may be, the date of
such judgment and ending on, but excluding, the date upon which the obligation
of the Payer to pay such sum is discharged (calculated on the basis of a year of
360 days). Such default interest shall be payable upon demand of the Payee.
25.2 Each of the Seller and the Collection Agent undertakes to indemnify
the Purchaser against any loss or expense, including legal fees reasonably
incurred, which the Purchaser may sustain or incur as a consequence of any
default by the Seller or the Collection Agent (as the case may be) in the
performance of any of the obligations expressed to be assumed by it in this
Supplemental Agreement.
26. FEES, COSTS AND EXPENSES AND STAMP DUTY
42
26.1 The Seller shall, from time to time upon demand of the Purchaser
reimburse the Purchaser for all costs and expenses (including reasonable legal
fees) incurred by it in or in connection with the negotiation, preparation and
execution of this Supplemental Agreement, the Assignment and the other
Transaction Documents or any amendment thereto or any waiver thereof.
26.2 The Seller or the Collection Agent will, upon demand, pay to the
Purchaser and any permitted assignee in accordance with this Supplemental
Agreement, the amount of any and all reasonable expenses, including all court
costs and attorneys' fees and expenses, which the Purchaser and any permitted
assignee may incur in connection with the exercise or enforcement against the
Seller or the Collection Agent of any of their respective rights or interests
under this Supplemental Agreement, the Assignment or any other Transaction
Document or any amendment thereto or any waiver thereof.
26.3 The Seller shall be responsible for all stamp duties, registration
fees and taxes to which this Supplemental Agreement, the Assignment, any other
Transaction Document, any transaction contemplated hereby or thereby or any
order or judgment given in connection herewith or therewith are or at any time
may be subject.
27. BENEFIT OF AGREEMENT
27.1 This Supplemental Agreement, the Assignment and the other Transaction
Documents shall be binding upon and inure to the benefit of each party hereto
and its successors and permitted assigns.
27.2 The Seller and the Collection Agent shall not be entitled to assign or
transfer all or any of their rights, benefits and obligations under this
Supplemental Agreement, the Assignment or any other Transaction Document.
27.3 The Purchaser shall be entitled to assign or transfer all or any of
its rights, benefits and obligations under this Supplemental Agreement, the
Assignment and the other Transaction Documents with the consent of the Seller,
which consent shall not be unreasonably withheld or delayed.
43
28. REMEDIES AND WAIVERS
28.1 No failure to exercise, nor any delay in exercising, on the part of
any party hereto, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy prevent
any further or other exercise thereof or the exercise of any other right or
remedy.
28.2 The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
29. PARTIAL INVALIDITY
Without prejudice to any other provision hereof, if one or more provisions
hereof is or becomes invalid, illegal or unenforceable in any respect in any
jurisdiction or with respect to such party or parties, it shall not, to the
fullest extent permitted by applicable law, render invalid, illegal or
unenforceable other provisions hereof or such provision or provisions in any
other jurisdiction or with respect to any other party or parties hereto.
30. COUNTERPARTS
This Supplemental Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement.
31. NOTICES
31.1 Unless otherwise stated herein, each communication to be made
hereunder shall be made in writing and may be made by telex, telefax or letter.
31.2 Any communication or document to be made or delivered by any one
person to another pursuant to this Supplemental Agreement shall (unless that
other person has by fifteen days' written notice to the other parties hereto
specified another address) be made or delivered to that other person at the
address or the number identified with its signature below and shall be deemed to
have been made or delivered when received by that other
44
person Provided that each communication made by one party hereto to another
shall be made to that other person at such other address or number as notified
to such party by that other person from time to time.
31.3 Each communication and document made or delivered by one person to
another person pursuant hereto shall be in the English language or in Japanese
accompanied by a translation thereof into English certified (by an officer of
the person making or delivering the same) as being a true and accurate
translation thereof.
32. PRIOR UNDERSTANDINGS
32.1 This Supplemental Agreement and the other Transaction Documents set
forth the entire understanding of the parties relating to the subject matter
hereof, and supersede all prior understandings and agreements, whether written
or oral.
32.2 This Supplemental Agreement is a supplement to and a part of the
Existing Receivables Agreement.
PART 13
LAW AND JURISDICTION
33. GOVERNING LAW
This Supplemental Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
34. JURISDICTION
34.1 Each of the parties hereto irrevocably agrees that the courts of the
State of California and the courts of the United States of America for the
Northern District of California shall have jurisdiction to hear and determine
any suit, action or proceeding, and to settle any disputes, which may arise out
of or in connection with this Supplemental Agreement and, for such purposes,
irrevocably submits to the jurisdiction of such courts.
34.2 Each of the parties hereto irrevocably waives any objection which it
might now or hereafter have to the courts
45
referred to in CLAUSE 34.1 being nominated as the forums to hear and determine
any suit, action or proceeding, and to settle any disputes, which may arise out
of or in connection with this Supplemental Agreement and agrees not to claim
that such courts are not convenient or appropriate forums.
34.3 The submission to the jurisdiction of the courts referred to in CLAUSE
34.1 shall not (and shall not be construed so as to) limit the right of any
party hereto to take proceedings against the other party in any other court of
competent jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction
(whether concurrently or not) if and to the extent permitted by applicable law.
34.4 Each of the parties hereto hereby consents generally in respect of any
legal action or proceedings arising out of or in connection with this
Supplemental Agreement to the giving of any relief or the issue of any process
in connection with such action or proceeding including, without limitation, the
making, enforcement or execution against any party whatsoever (irrespective of
its use or intended use) of any order or judgment which may be made or given in
such action or proceeding.
[The next page is the signature page.]
46
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Agreement
to be executed on the day and year first before written.
LRC
LAM RESEARCH CORPORATION
By:
------------------------------
Name:
------------------------
Title:
-----------------------
Address: 47300 Bayside Parkway
Fremont, CA 94538
Attn: Yuko Hashimoto
Fax: (510) 659-6454
Tel: (510) 438-4887
ABN CAYMAN
ABN AMRO BANK N.V.,
CAYMAN ISLANDS BRANCH
By:
------------------------------
Name:
------------------------
Title:
-----------------------
By:
------------------------------
Name:
------------------------
Title:
-----------------------
Address: c/o San Francisco
International Branch
101 California Street
Suite 4550
San Francisco, CA 94111
Attn: Robert N. Hartinger/
Gloria Lee
Fax: (415) 362-3524
Tel: (415) 984-3710
47
THE SELLER AND THE COLLECTION AGENT
LAM RESEARCH CO., LTD.
By:
------------------------------
Name:
------------------------
Title:
-----------------------
Address: 1-1-10, Oyama,
Sagamihara-shi,
Kanagawa
Attn:
-------------------
Fax:
-------------------
Tel:
-------------------
THE PURCHASER
ABN AMRO BANK N.V.,
TOKYO BRANCH
By:
------------------------------
Name:
------------------------
Title:
-----------------------
By:
------------------------------
Name:
------------------------
Title:
-----------------------
Address: Shiroyama JT Mori Building, 3-1
4-chome
Toranomon
Minato-ku
Tokyo
Attn: Takamaso Marito
Fax:
------------------
Tel:
------------------
49
THE FIRST SCHEDULE
DESCRIPTION OF RECEIVABLE
Describe Receivable by:
(i) Face Amount;
(ii) Description of Equipment sold;
(iii) Date of Purchase Order from the Buyer;
(iv) Date of Shipment to the Buyer;
(v) Name of End-User of the Equipment;
(vi) Whether a promissory note has been or is expected to be
issued by the Buyer and, if issued, the date, principal
amount and maturity date thereof.
1-1
THE SECOND SCHEDULE
CONDITIONS PRECEDENT TO THE CLOSING
1. The receipt by the Purchaser on or prior to the Closing Date, each in form
and substance reasonably satisfactory to the Purchaser, of:
(a) a copy, certified as of the Closing Date as a true copy by a duly
authorized officer of the Seller, of the resolutions of the Seller's board
of directors approving:
(i) the outright transfer of all the Seller's right, title
and interest in and to the Receivable; and
(ii) the execution and delivery on behalf of the Seller of
this Supplemental Agreement, the Assignment and all other
Transaction Documents to which the Seller is to be a
signatory;
(b) a copy, certified as of the Closing Date as a true copy by a duly
authorized officer of the Seller, of the Articles of Incorporation and
bylaws of the Seller;
(c) a certified copy, as of the date which is as close as practically
possible to the Closing Date, of a commercial registry of the Seller;
(d) an incumbency certificate, certified as of the Closing Date by a duly
authorized officer of the Seller, setting forth the name(s), title(s) and
specimen signature(s) of individual(s) authorized to execute and deliver on
behalf of the Seller this Supplemental Agreement, the Assignment and all
other Transaction Documents to which the Seller is to be a signatory;
(e) the Guaranty, duly executed by LRC;
(f) a copy, certified as of the Closing Date as a true copy by a duly
authorized officer of LRC, of the resolutions of LRC's board of directors
approving the execution and delivery on behalf of LRC of this Supplemental
Agreement,
2-1
the Guaranty and all other Transaction Documents to which LRC is to be a
signatory;
(g) a copy, certified as of the Closing Date as a true copy by a duly
authorized officer of LRC, of the Articles of Incorporation and bylaws of
LRC;
(h) good standing certificates from California and Delaware, as of dates
which are as close as practicably possible to the Closing Date, for LRC;
(i) an incumbency certificate, certified as of the Closing Date by a duly
authorized officer of LRC, setting forth the name(s), title(s) and specimen
signature(s) of individual(s) authorized to execute and deliver on behalf
of LRC this Supplemental Agreement, the Guaranty and all other Transaction
Documents to which LRC is to be a signatory;
(j) the Assignment, appropriately completed and duly executed by the
Seller and the Purchaser;
(k) the Purchase Orders, invoices, and other written documents,
instruments and agreements constituting the Sales Agreements and Records
relating to the Receivable and the related Equipment;
(l) the original of any note or other instrument evidencing the Purchased
Receivable, duly endorsed by the Seller to the Purchaser;
(m) the Perfection Document(s) for the assignment of the Receivable, duly
executed by the Seller;
(n) Such other documents, instruments and agreements as the Purchaser may
request to establish and perfect the interests granted to the Purchaser in
this Supplemental Agreement, the Assignment and the other Transaction
Documents;
(o) such financial statements and other financial information for LRC as
the Purchaser may reasonably request;
(p) an opinion, dated the Closing Date and addressed to the Purchaser,
from Jan Kang, counsel to LRC, in a form and substance reasonably
satisfactory to the Purchaser; and
2-2
(q) such other instruments, agreements, certificates, opinions and other
documents as the Purchaser may reasonably request.
2. The representations and warranties set forth in CLAUSE 9.1 and in the FIFTH
SCHEDULE shall be true and correct on and as of the Closing Date by reference to
the facts and circumstances then existing.
3. Neither a Termination Event nor a Potential Termination Event shall have
occurred and remain unremedied on the Closing Date.
4. No event which could have a Material Adverse Effect on the Seller shall
have occurred and be continuing on the Closing Date.
2-3
THE THIRD SCHEDULE
PART 1 - FORM OF ASSIGNMENT OF THE RECEIVABLE
THIS ASSIGNMENT made on ________, 1995 BY:
(1) LAM RESEARCH CO., LTD.(the "Seller")
IN FAVOR OF:
(2) ABN AMRO BANK N.V., Tokyo Branch (the "Purchaser")
WITNESSES as follows:
1. Interpretation
1.1 In this Assignment "Purchase Agreement" means the Supplemental Receivables
Purchase Agreement dated as of June 28, 1995 among (1) LRC, (2) ABN Cayman,
(3) the Seller, in its capacity as the Seller, (4) the Purchaser and (5)
the Seller, in its capacity as the Collection Agent.
1.2 Terms defined in the Purchase Agreement have the same meaning in this
Assignment.
1.3 Headings in this Assignment are for ease of reference only.
2. Transfer
2.1 Subject to, and in accordance with, the terms and conditions of the
Purchase Agreement, the Seller hereby sells and assigns to the Purchaser
(by way of outright assignment and not merely by way of security) all of
the Seller's right, title and interest in and to the Receivable (the
"Assigned Receivable") described in Exhibit A hereto, to all Collections
thereof and to the Related Security relating thereto and all proceeds
thereof.
2.2 The Tentative Acceptance Date, the Tentative Credit Period, the Tentative
Due Date, the Discount Rate and the Purchase Price for the Assigned
Receivable shall be as set forth under the description of such Assigned
Receivable in Exhibit A.
3(1)-1
2.3 In accordance with Clause 4.1 of the Purchase Agreement, the aggregate
Purchase Price for the Assigned Receivable shall be Y ______________.
3. Representations and Warranties
The Seller hereby represents and warrants to the Purchaser as of the date
hereof in the terms set out in Clause 9 of the Purchase Agreement by
reference to the facts and circumstances currently existing.
4. Governing Law and Jurisdiction
4.1 This Assignment is governed by, and shall be construed in accordance with,
the laws of the State of California.
4.2 Both of the parties hereto agree that the courts of the State of California
and the courts of the United States of America for the Northern District of
California shall have jurisdiction to hear and determine any suit, action
or proceedings, and to settle any disputes, which may arise out of or in
connection with this Assignment and, for such purpose, irrevocably submits
to the jurisdiction of such courts.
4.3 Both of the parties hereto irrevocably waive any objection which they might
now or hereafter have to the courts referred to in Clause 4.2 being
nominated as the forums to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Assignment and agree not to claim that such courts are
not convenient or appropriate forums.
4.4 The submission to the jurisdiction of the courts referred to in a Clause
4.2 shall not (and shall not be construed so as to) limit the right of
either of the Seller or the Purchaser to take proceedings against the other
in any other court of competent jurisdiction or shall the taking of
proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction (whether concurrently or not) if and
to the extent permitted by applicable law.
4.5 Each of the Seller and the Purchaser hereby consents generally in respect
of any legal action or proceeding
3(1)-2
arising out of or in connection with this Assignment to the giving of any
relief or the issue of any process in connection with such action or
proceeding including, without limitation, the making, enforcement or
execution against any property whatsoever (irrespective of its use or
intended use) of any order or judgment which may be made or given in such
action or proceeding.
3(1)-3
AS WITNESS the hands of the duly authorized representative(s) of the parties
hereto the day and year first above written.
LAM RESEARCH CO., LTD.
By:
------------------------------
Name:
------------------------
Title:
-----------------------
ABN AMRO BANK N.V.,
TOKYO BRANCH
By:
------------------------------
Name:
------------------------
Title:
-----------------------
By:
------------------------------
Name:
------------------------
Title:
-----------------------
3(1)-4
EXHIBIT A TO THE ASSIGNMENT
DESCRIPTION OF ASSIGNED RECEIVABLE
(a) Describe Assigned Receivable by:
(i) Face Amount;
(ii) Description of Equipment sold;
(iii) Date of Purchase Order from the Buyer;
(iv) Date of Shipment to the Buyer;
(v) Name of End-User of the Equipment;
(vi) Whether a promissory note has been or is expected to be
issued by the Buyer and, if issued, the date, principal
amount and maturity date thereof.
(b) The Tentative Acceptance Date, the Tentative Credit Period, the
Tentative Due Date, the Discount Rate and the Purchase Price for the
Assigned Receivable described above are as follows:
(i) The Tentative Acceptance Date is _______________;
(ii) The Tentative Credit Period is _______________;
(iii) The Tentative Due Date is _______________;
(iv) The Discount Rate is the LIBOR Based Rate, which is ____
percent (__%) PER ANNUM; and
(v) In accordance with CLAUSE 4.1 of the Purchase Agreement, the
Purchase Price of the Assigned Receivable shall be Y
_____________.
3(1) (A)-1
PART 2 - FORM OF REASSIGNMENT OF RECEIVABLE
THIS ASSIGNMENT made on [date]
By:
(1) ABN AMRO BANK N.V., Tokyo Branch ("ABN Tokyo")
IN FAVOR OF:
(2) LAM RESEARCH CO., LTD. ("LRCL")
WITNESSES as follows:
1. Interpretation
1.1 In this Assignment "Purchase Agreement" means the receivables purchase
agreement dated as of June 28, 1995 among (1) LRC, (2) ABN Cayman, (3)
LRCL, in its capacity as the Seller, (2) ABN Tokyo, in its capacity as the
Purchaser and (3) LRCL, in its capacity as the Collection Agent.
1.2 Terms defined in the Purchase Agreement have the same meaning in this
Assignment.
1.3 Headings in this Assignment are for ease of reference only.
2. Transfer
2.1 Subject to, and in accordance with, the terms and conditions of the
Purchase Agreement, ABN Tokyo hereby sells and assigns to LRCL (by way of
outright assignment and not merely by way of security, and without any
representation or warranty on the part of ABN Tokyo except for the
representation set out in Clause 2.2) all of ABN AMRO's right, title and
interest in and to the Receivable (the "Assigned Receivable") described in
Exhibit A hereto, to all Collections thereof and to the Related Security
relating thereto and all proceeds thereof.
2.2 ABN Tokyo hereby represents and warrants to LRCL that as of the date hereof
ABN Tokyo has not sold, transferred, assigned, created security interests
in or otherwise disposed of the Assigned Receivable.
3(2)-1
3. Governing Law and Jurisdiction
3.1 This Assignment is governed by, and shall be construed in accordance with,
the laws of the State of California.
3.2 Both of the parties hereto agree that the courts of the State of California
and the courts of the United States of America for the Northern District of
California shall have jurisdiction to hear and determine any suit, action
or proceedings, and to settle any disputes, which may arise out of or in
connection with this Assignment and, for such purpose, irrevocably submits
to the jurisdiction of such courts.
3.3 Both of the parties hereto irrevocably waive any objection which they might
now or hereafter have to the courts referred to in Clause 3.2 being
nominated as the forums to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Assignment and agree not to claim that such courts are
not convenient or appropriate forums.
3.4 The submission to the jurisdiction of the courts referred to in Clause 3.2
shall not (and shall not be construed so as to) limit the right of either
of ABN Tokyo or LRCL to take proceedings against the other in any other
court of competent jurisdiction or shall the taking of proceedings in any
one or more jurisdictions preclude the taking of proceedings in any other
jurisdiction (whether concurrently or not) if and to the extent permitted
by applicable law.
AS WITNESS the hands of the duly authorized representatives of the parties
hereto the day and year first above written.
LAM RESEARCH CO. LTD.
By:___________________________________
Name:_____________________________
Title:____________________________
3(2)-2
ABN AMRO BANK N.V.,
TOKYO BRANCH
By:
------------------------------
Name:
------------------------
Title:
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By:
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Name:
------------------------
Title:
-----------------------
3(2)-3
EXHIBIT A TO THE ASSIGNMENT
DESCRIPTION OF ASSIGNED RECEIVABLE
Describe Assigned Receivable by:
(i) Face Amount;
(ii) Description of Equipment sold;
(iii) Date of Purchase Order from the Buyer;
(iv) Date of Shipment to the Buyer;
(v) Name of End-User of the Equipment;
(vi) Whether a promissory note has been or is expected to be
issued by the Buyer and, if issued, the date, principal
amount and maturity date thereof.
3(2) (A)-1
THE FOURTH SCHEDULE
TERMINATION EVENTS
1. The Seller or LRC breaches any of its obligations under this Supplemental
Agreement or any of the other Transaction Documents and such breach is not
remedied, if it is capable of being remedied, within five (5) business days
in the case of the obligation to pay monies or ten (10) business days in
the case of other obligations;
2. Any Insolvency Event relating to the Seller or LRC occurs or the Seller or
LRC becomes unable to pay its debts or fails or admits in writing its
inability generally to pay its debts as they become due or ceases to carry
on its business;
3. Any representation or warranty set forth in CLAUSE 9.1 or in the FIFTH
SCHEDULE is incorrect when made;
4. The adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by
any governmental authority charged with the interpretation or
administration thereof after the date of this Supplemental Agreement makes
it unlawful or impossible for any party to this Supplemental Agreement or
any of the other Transaction Documents to perform its obligation hereunder
or thereunder;
5. LRC fails to pay any Debt in the aggregate amount in excess of U.S.
$10,000,000 (or its equivalent in any other currency) when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise)
and such failure continues after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt, or any
other default under any agreement or instrument relating to any such Debt
or any other event occurs and continues after the applicable grace period,
if any, specified in such agreement or instrument if the effect of such
default or event is to accelerate, or to permit the acceleration of, the
maturity of such Debt, or any such Debt shall be declared to be due and
payable or required to be prepaid (other than by a regularly schedule
required prepayment) prior to the stated maturity thereof; or
4-1
6. A material adverse change occurs in the financial condition of LRC as shown
by the Original Financial Statements of LRC which has had or can reasonably
be expected to have a Material Adverse Effect.
4-2
THE FIFTH SCHEDULE
PART 1 : REPRESENTATIONS AS TO MATTERS OF LAW
1. Each of the Seller and LRC is a corporation duly organized and is validly
existing under the laws of its jurisdiction of incorporation with power to
enter into this Supplemental Agreement, the Assignment and the other
Transaction Documents to be entered into by it in respect of any Receivable
assigned or scheduled to be assigned pursuant hereto and to exercise its
rights and perform its obligations hereunder and thereunder and all
corporate and other action required to authorize its execution of all such
documents and its performance of its obligations hereunder and thereunder
has been duly taken.
2. Each of the Seller and LRC has all corporate power and all governmental
licenses, authorizations, consents and approvals to carry on its business
in the jurisdictions where it conducts business.
3. The execution and delivery of this Supplemental Agreement, the Assignment
and the other Transaction Documents and the performance of the transactions
contemplated hereby by the Seller and LRC require no action by or in
respect of, or filing, recording or enrolling with, any governmental body,
agency, court official or other authority, and do not contravene, or
constitute a default under, any provision of applicable law or regulation
or its Articles of Incorporation or other internal regulations or of any
agreement, judgment, injunction, order, decree or other instrument binding
upon the Seller or LRC or any of their assets.
4. The claims of the Purchaser against the Seller and LRC under this
Supplemental Agreement and the other Transaction Documents will rank at
least pari passu with the claims of all their other unsecured creditors
save those whose claims are preferred solely by any bankruptcy, insolvency
or other similar laws of general application.
5. In any proceedings taken in relation to this Supplemental Agreement, the
Assignment and the other Transaction Documents, neither the Seller nor LRC
will be entitled to
5-1
claim for itself or any of its assets immunity from suit, execution,
attachment or other legal process.
6. In any proceedings taken in relation to this Supplemental Agreement, the
Assignment and the other Transaction Documents, the choice of California
law by the Seller and LRC as the governing law of this Supplemental
Agreement, the Assignment and the other Transaction Documents, as the case
may be, will be recognized and enforced subject to bankruptcy, insolvency,
moratorium or other similar laws affecting creditor's rights generally and
to principles of equity.
7. All acts, conditions and things required to be done, fulfilled and
performed by the Seller and LRC in order (a) to enable the Seller and LRC
lawfully to enter into, exercise their rights under and perform and comply
with the obligations expressed to be assumed by them in this Supplemental
Agreement, the Assignment and the other Transaction Documents, (b) to
ensure that the obligations expressed to be assumed by the Seller and LRC
in this Supplemental Agreement, the Assignment and the other Transaction
Documents are legal, valid and binding on them and (c) to make this
Supplemental Agreement, the Assignment and the other Transaction Documents
admissible in evidence in California and Japan have been done, fulfilled
and performed.
8. Under the laws of Japan in force as at the date of making this
representation, it is not necessary that this Supplemental Agreement, the
Assignment and the other Transaction Documents be filed, recorded or
enrolled with any court or other authority in Japan or that any stamp,
registration or similar tax be paid on or in relation to this Supplemental
Agreement, the Assignment and the other Transaction Documents.
9. The obligations expressed to be assumed by the Seller and LRC in this
Supplemental Agreement, the Assignment and the other Transaction Documents
are legal and valid obligations binding on them and enforceable in
accordance with their respective terms.
PART 2 : REPRESENTATIONS AS TO MATTERS OF FACT
5-2
1. Neither the Seller nor LRC has taken any corporate action nor have legal
proceedings been started or threatened (to the best of its knowledge and
belief) against the Seller or LRC for its winding-up, dissolution,
rehabilitation or reorganization or for the appointment of a receiver,
administrator, administrative receiver, trustee, liquidator, sequestrator
or similar office of it or of any or all of its assets or revenues.
2. No action or administrative proceeding of or before any court or agency has
been started or threatened against the Seller or LRC which might, if it
were adversely determined, reasonably be expected to have a Material
Adverse Effect.
3. The Original Financial Statements of LRC were prepared in accordance with
accounting principles generally accepted in the United States and
consistently applied and give (in conjunction with the notes thereto) a
true and fair view of its financial condition at the date as of which they
were prepared and the results of its operations during the financial year
then ended.
4. Since publication of the Original Financial Statements of LRC, there has
been no change in its financial condition or operations of LRC so as to
have a Material Adverse Effect.
5-3
THE SIXTH SCHEDULE
COVENANTS AND UNDERTAKINGS OF THE COLLECTION AGENT
The Collection Agent hereby covenants with the Purchaser that it shall at all
times:
(i) give such time and attention and exercise the same degree of
care, responsibility, diligence, prudent and skill with respect
to the servicing, collection and administration of the Purchased
Receivable and all related function as if it were performing such
functions on its own behalf;
(ii) take all action to ensure that all Purchased Receivable are paid
promptly in accordance with the terms of this Supplemental
Agreement and the related Sales Agreements;
(iii) promptly pay to the Purchaser all Collections;
(iv) keep proper, complete, accurate and up to date Records in a
manner acceptable to the Purchaser;
(v) keep and maintain Records, on a Receivable-by-Receivable basis,
for the purposes of identifying, in particular, at any time, any
amount paid by and to the Buyer, any amount due by or to the
Buyer and the source of receipts for all Collections;
(vi) permit audit and inspection under its guidance of its Records by
or on behalf of the Purchaser during normal working hours upon
reasonable notice and with reasonable frequency;
(vii) notify the Purchaser of material developments in the Seller's
performance of its obligations under the Sales Agreements,
including, but not limited to, the Shipment, the Acceptance and
the Partial Acceptance of the Equipment and the refusal thereof
by the Buyer;
(viii) notify the Purchaser of the Scheduled Due Date and (if
applicable) the Revised Face Amount promptly
6-1
after it is confirmed between the Seller and the Buyer and, if
the payment by the Buyer of the relevant Purchased Receivable is
to be made on the date which is not the Scheduled Due Date,
notify the Purchaser of such date of payment at least one
business day prior to the Scheduled Due Date or such date of
payment, whichever comes earlier;
(ix) use its best endeavors to maintain records of all correspondence
with the Buyer in respect of the Purchased Receivable;
(x) promptly obtain, comply in all material respects with the terms
of and do all that is necessary and within its control to
maintain in full force and effect all authorizations, approvals,
licenses and consents required in or by the laws and regulations
of the United States and Japan to enable it lawfully to enter
into and perform its obligations under this Supplemental
Agreement and the other Transaction Documents or to ensure the
legality, validity, enforceability or admissibility in evidence
of such documents;
(xi) do all things necessary to remain duly organized, validly
existing under the laws of Delaware and maintain all requisite
authority to conduct its business in California;
(xii) comply in all respects which could be regarded as material in the
context of the transactions contemplated by this Supplemental
Agreement, with all laws, rules, regulations, orders, writs,
judgements, injunctions decrees or awards to which it may be
subject;
(xiii) maintain sufficient operating procedures, employees and other
resources to perform its obligations as Collection Agent
hereunder; and
(xvi) submit to Purchaser a monthly report relating to the Purchased
Receivable and the Buyer in such a form as is reasonably
requested by the Purchaser.
6-2
THE SEVENTH SCHEDULE
GUARANTY
THIS GUARANTY, dated as of June 28, 1995, is executed by LAM RESEARCH
CORPORATION, a Delaware corporation ("GUARANTOR"), in favor of ABN AMRO BANK
N.V. ("PURCHASER").
RECITALS
A. At the request of Guarantor, Purchaser, acting through its Tokyo
Branch, has entered into a Supplemental Receivables Purchase Agreement dated as
of June 28, 1995 (the "SUPPLEMENTAL PURCHASE AGREEMENT") with Purchaser and Lam
Research Co., Ltd., a Japanese corporation which is a wholly-owned subsidiary of
Guarantor ("SELLER"), pursuant to which (i) Purchaser has agreed to purchase
from Seller a certain account, promissory note or other obligation payable to
Seller (the "RECEIVABLE") upon the terms and subject to the conditions set forth
in the Supplemental Purchase Agreement and (ii) Seller has agreed to act as
collection agent for the Receivable so purchased by Purchaser from Seller (the
"PURCHASED RECEIVABLE").
B. Purchaser's obligation to purchase the Receivable from Seller under
the Supplemental Purchase Agreement is subject, among other conditions, to
receipt by Purchaser of this Guaranty, duly executed by Guarantor.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Guarantor hereby agrees with Purchaser as follows:
1. DEFINITIONS AND INTERPRETATION.
(a) DEFINITIONS. Unless otherwise indicated in this Guaranty, each
term set forth in SCHEDULE 1, when used in this Guaranty, shall have the
respective meaning given to
7-1
that term in SCHEDULE 1 or in the provision of this Guaranty referenced in
SCHEDULE 1.
(b) OTHER INTERPRETIVE PROVISIONS. Headings in this Guaranty are for
convenience of reference only and are not part of the substance hereof.
All terms defined in this Guaranty in the singular form shall have
comparable meanings when used in the plural form and VICE VERSA. This
Guaranty shall be governed by and construed in accordance with the laws of
the State of California without reference to conflicts of law rules.
References in this Guaranty to any document, instrument or agreement
(i) shall include all exhibits, schedules and other attachments thereto,
(ii) shall include all documents, instruments or agreements issued or
executed in replacement thereof and (iii) shall mean such document,
instrument or agreement, or replacement or predecessor thereto, as amended,
modified and supplemented from time to time and in effect at any given
time.
2. CONTINUING GUARANTY. Guarantor unconditionally guarantees and
promises to pay and perform as and when due, upon the demand of Purchaser, (a)
all obligations of the obligor under the Purchased Receivable ("BUYER") and (b)
all obligations of Seller under the Supplemental Purchase Agreement and all
other documents, instruments and agreements delivered to Purchaser in connection
therewith (collectively, including this Guaranty, the "TRANSACTION DOCUMENTS")
(all such obligations, including the obligations described in CLAUSE (A) above,
to be referred to herein collectively as the "GUARANTEED OBLIGATIONS").
Guarantor shall make all payments required hereunder to Purchaser, or its order,
at Purchaser's office located at the address set forth in SUBPARAGRAPH 8(A)
hereof, or at such other office as Purchaser may designate, on demand in such
lawful currency as is required by SUBPARAGRAPH 8(D) hereof. Notwithstanding any
termination of this Guaranty in accordance with PARAGRAPH 6 hereof, this
Guaranty shall continue to be in full force and effect and applicable to any
Guaranteed Obligations arising thereafter which arise because prior payments of
Guaranteed Obligations are rescinded or otherwise required to be surrendered by
Purchaser after receipt. The liability of Guarantor hereunder is independent of
the obligations of Seller and Buyer, and a separate action or actions may be
brought and prosecuted against Guarantor irrespective of whether action is
brought against
7-2
Seller, Buyer or any other guarantor of the Guaranteed Obligations or whether
Seller, Buyer or any other guarantor of the Guaranteed Obligations is joined in
any such action or actions. This Guaranty is a guaranty of payment and not of
collection.
7-3
3. REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Purchaser, as of the date hereof, the date the Receivable is purchased pursuant
to the Supplemental Purchase Agreement and each other date on which Seller makes
(pursuant to CLAUSE 12.1 OF THE SUPPLEMENTAL PURCHASE AGREEMENT or otherwise)
the representations and warranties set forth in the SIXTH SCHEDULE TO THE
SUPPLEMENTAL PURCHASE AGREEMENT, that (a) each of Guarantor and Seller is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and is duly qualified and in good standing
in each jurisdiction where the nature of its business or properties requires
such qualification, except where the failure to qualify could not have a
Material Adverse Effect; (b) the execution, delivery and performance by
Guarantor and Seller of this Guaranty and the other Transaction Documents are
within the power of Guarantor and Seller and have been duly authorized by all
necessary actions on the part of Guarantor and Seller; (c) this Guaranty and the
other Transaction Documents have been duly executed and delivered by Guarantor
and Seller and constitute legal, valid and binding obligations of Guarantor and
Seller, enforceable against them in accordance with their terms, except as
limited by bankruptcy, insolvency or other laws of general application relating
to or affecting the enforcement of creditors' rights generally; (d) the
execution, delivery and performance of this Guaranty and the other Transaction
Documents do not (i) violate any Requirement of Law, (ii) contravene any
material Contractual Obligation, or (iii) result in the creation or imposition
of any Lien upon any property, asset or revenue of Guarantor or Seller; (e) no
consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Authority or other Person (including, without
limitation, the shareholders of any Person) is required in connection with the
execution, delivery and performance of this Guaranty and the other Transaction
Documents, except such consents, approvals, orders, authorizations,
registrations, declarations and filings that are so required and which have been
obtained and are in full force and effect; (f) each of Guarantor and Seller has
paid all taxes and other charges imposed by any Governmental Authority due and
payable by Guarantor or Seller other than those which are being challenged in
good faith by appropriate proceedings and for which adequate reserves have been
established; (g) neither Guarantor nor Seller is in violation of any Requirement
of Law or Contractual Obligation other than those the consequences of which
could not have a Material Adverse
7-5
Effect; (h) the financial statements of Guarantor and Seller which have been
delivered to Purchaser fairly present the respective financial positions and
results of Guarantor and Seller for the periods and as of the dates covered
thereby; (i) no litigation, investigation or proceeding of any Governmental
Authority is pending or, to the knowledge of Guarantor, threatened against
Guarantor or Seller which, if adversely determined, could have a Material
Adverse Effect; (j) Seller is a wholly-owned subsidiary of Guarantor; (k) the
obligations of Guarantor hereunder rank at least pari passu with all other
unsecured debt of Guarantor; and (l) no event or condition which could have a
Material Adverse Effect has occurred or arisen and is continuing.
4. COVENANTS. Until the Supplemental Purchase Agreement is terminated
and the Purchased Receivable is paid in full, Guarantor hereby agrees (a) to
deliver to Purchaser (i) within 55 days after the last day of each of its fiscal
quarters, its financial statements for such quarter, (ii) within 100 days after
the last day of each of its fiscal years, its audited financial statements for
such year, (iii) notice of any Potential Termination Event, any Termination
Event or any other default under the Transaction Documents or of any other event
or condition which could have a Material Adverse Effect, and (iv) such other
information regarding the business, operations or financial or other condition
of Guarantor or Seller as Purchaser may reasonably request; (b) to keep, and
cause Seller to keep, proper books of record and account and to permit Purchaser
to examine the same; (c) to the extent failure to do so could have a Material
Adverse Effect, to comply and cause Seller to comply with all Requirements of
Law and Contractual Obligations; (d) to maintain and cause Seller to maintain
its corporate existence and all rights, privileges and franchises necessary for
the conduct of its business; (e) to cause the obligations of Guarantor hereunder
to rank at least pari passu with all other unsecured debt of Guarantor at all
times; (f) to maintain, at all times, a ratio of Quick Assets to Current
Liabilities of at least 1.25 to 1.00; (g) to maintain, at all times, Tangible
Net Worth of not less than the Tangible Net Worth Requirements at such times;
and (h) to maintain, at all times, a ratio of Total Debt LESS Subordinated Debt
to Capital of no more than 0.50 to 1.00.
5. AUTHORIZED ACTIONS. Guarantor authorizes Purchaser, in its
discretion, without notice to Guarantor, irrespective of any
7-6
change in the financial condition of Seller, Guarantor, Buyer or any other
guarantor of the Guaranteed Obligations since the date hereof, and without
affecting or impairing in any way the liability of Guarantor hereunder, from
time to time to (a) purchase from Seller new Receivables and create new
Guaranteed Obligations, and, either before or after receipt of notice of
revocation, renew, compromise, extend, accelerate or otherwise change the time
for payment or performance of, or otherwise change the terms of the Purchased
Receivable and Guaranteed Obligations or any part thereof, including increase or
decrease of the rate of interest or discount thereon; (b) take and hold security
for the payment or performance of the Purchased Receivable and Guaranteed
Obligations and exchange, enforce, waive or release any such security; (c) apply
such security and direct the order or manner of sale thereof; (d) purchase such
security at public or private sale; (e) otherwise exercise any right or remedy
it may have against Seller, Guarantor, Buyer, any other guarantor of the
Guaranteed Obligations or any security, including, without limitation, the right
to foreclose upon any such security by judicial or nonjudicial sale; (f) settle,
compromise with, release or substitute any one or more makers, endorsers or
guarantors of the Purchased Receivable or Guaranteed Obligations; and (g) assign
the Purchased Receivable, the Guaranteed Obligations, this Guaranty, or the
other Transaction Documents in whole or in part.
6. WAIVERS. Guarantor waives (a) any right to require Purchaser to
(i) proceed against Seller, Buyer or any other guarantor with respect to the
Guaranteed Obligations, (ii) proceed against or exhaust any security received
from Seller, Buyer or any other guarantor with respect to the Guaranteed
Obligations, or (iii) pursue any other remedy in Purchaser's power whatsoever;
(b) any defense arising by reason of the application by Seller of the proceeds
of any purchase; (c) any defense resulting from the absence, impairment or loss
of any right of reimbursement, subrogation, contribution or other right or
remedy of Guarantor against Seller, Buyer, any other guarantor with respect to
the Guaranteed Obligations or any security, whether resulting from an election
by Purchaser to foreclose upon security by nonjudicial sale, or otherwise;
(d) any setoff or counterclaim of Seller or any defense which results from any
disability or other defense of Seller or the cessation or stay of enforcement
from any cause whatsoever of the liability of Seller (including, without
limitation, the lack of
7-7
validity or enforceability of any Transaction Document); (e) any right to
exoneration of sureties which would otherwise be applicable; (f) until all
obligations of Purchaser under the Transaction Documents have been terminated
and the Guaranteed Obligations have been fully satisfied, any right of
subrogation or reimbursement and, if there are any other guarantors of the
Guaranteed Obligations, any right of contribution, and right to enforce any
remedy which Purchaser now has or may hereafter have against Seller, and any
benefit of, and any right to participate in, any security now or hereafter
received by Purchaser; (g) all presentments, demands for performance, notices of
non-performance, notices delivered under the Supplemental Purchase Agreement or
any other Transaction Document, protests, notice of dishonor, and notices of
acceptance of this Guaranty and of the existence, creation or incurring of new
or additional Purchased Receivable or Guaranteed Obligations and notices of any
public or private foreclosure sale; (h) the benefit of any statute of
limitations to the extent permitted by law; (i) any appraisement, valuation,
stay, extension, moratorium redemption or similar law or similar rights for
marshalling; (j) any right to be informed by Purchaser of the financial
condition of Seller, Buyer or any other guarantor with respect to the Guaranteed
Obligations or any change therein or any other circumstances bearing upon the
risk of nonpayment or nonperformance of the Purchased Receivable or Guaranteed
Obligations; and (k) any right to revoke this Guaranty prior to the termination
of the Transaction Documents and the satisfaction in full of all the Guaranteed
Obligations. Guarantor has the ability and assumes the responsibility for
keeping informed of the financial condition of Seller, the Buyers and any other
guarantors of the Guaranteed Obligations and of other circumstances affecting
such nonpayment and nonperformance risks. Without limiting the scope of any of
the foregoing waivers, Guarantor hereby waives (i) all rights and defenses
arising out of an election of remedies by Purchaser, even though that election
of remedies, such as a nonjudicial foreclosure with respect to security for a
Guaranteed Obligation, has destroyed Guarantor's rights of subrogation and
reimbursement against Seller by the operation of Section 580d of the Code of
Civil Procedure or otherwise, (ii) all rights and defenses Guarantor may have by
reason of protection afforded to Seller with respect to the Guaranteed
Obligations pursuant to the antideficiency or other laws of California limiting
or discharging the Guaranteed Obligations, including, without limitation,
Section 580a, 580b, 580d, or 726 of the California
7-8
Code of Civil Procedure, and (iii) all other rights and defenses available to
Guarantor by reason of Sections 2787 to 2855, inclusive, of the California Civil
Code.
7. SUBORDINATION. Guarantor hereby subordinates any obligations of
Seller to Guarantor (the "SUBORDINATED OBLIGATIONS") to the Guaranteed
Obligations as provided in this PARAGRAPH 7. Until the occurrence of a
Potential Termination Event or Termination Event, Guarantor may receive
regularly scheduled payments from Seller on account of Subordinated Obligations.
Upon the occurrence and during the continuance of any Potential Termination
Event or Termination Event, however:
(a) Purchaser shall be entitled to receive payment of all Guaranteed
Obligations before Guarantor receives payment of any Subordinated
Obligations;
(b) Any payments on the Subordinated Obligations, if Purchaser so
requests, shall be collected, enforced and received by Guarantor as trustee
for Purchaser and be paid over to Purchaser on account of the Guaranteed
Obligations, but without reducing or affecting in any manner the liability
of Guarantor under the other provisions of this Guaranty; and
(c) Purchaser is authorized and empowered (but without any obligation
to so do), in its discretion, (i) in the name of Guarantor, to collect and
enforce, and to submit claims in respect of, the Subordinated Obligations
and to apply any amounts received thereon to the Guaranteed Obligations and
(ii) to require Guarantor (A) to collect and enforce, and to submit claims
in respect of, the Subordinated Obligations and (B) to pay any amounts
received on such Subordinated Obligations to Purchaser for application to
the Guaranteed Obligations.
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8. MISCELLANEOUS.
(a) NOTICES. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or
upon Purchaser or Guarantor under this Guaranty shall be in writing and
telecopied, mailed or delivered to each party at its telecopier number or
address set forth below (or to such other telecopier number or address for
any party as indicated in any notice given by that party to the other
party). All such notices and communications shall be effective (i) when
sent by Federal Express or other overnight service of recognized standing,
on the Business Day following the deposit with such service; (ii) when
mailed, first class postage prepaid and addressed as aforesaid through the
United States Postal Service, upon receipt; (iii) when delivered by hand,
upon delivery; and (iv) when telecopied, upon confirmation of receipt.
PURCHASER: ABN AMRO Bank N.V.
101 California Street
Suite 4550
San Francisco, California 94111-5812
Attn: Robert N. Hartinger
Telephone: (415) 984-3710
Facsimile: (415) 362-3524
GUARANTOR: Lam Research Corporation
47300 Bayside Parkway
Fremont, California 94538
Attn: Yuko Hashimoto
Telephone: (510) 438-4887
Facsimile: (510) 661-1586
(b) EXPENSES. Guarantor shall pay on demand, whether or not any
Receivable is purchased under the Transaction Documents, (i) all reasonable
fees and expenses, including reasonable attorneys' fees and expenses,
incurred by Purchaser in connection with the preparation, execution and
delivery of, and the exercise of its duties under, this Guaranty and the
other Transaction Documents, and the preparation, execution and delivery of
amendments and waivers hereunder and thereunder; and (ii) all reasonable
fees and expenses, including reasonable attorneys' fees and
7-10
expenses, incurred by Purchaser in the enforcement or attempted enforcement
of this Guaranty or any of the Guaranteed Obligations or in preserving any
of Purchaser's rights and remedies (including, without limitation, all such
fees and expenses incurred in connection with any "workout" or
restructuring affecting the Transaction Documents or the Guaranteed
Obligations or any bankruptcy or similar proceeding involving Guarantor,
Seller or any of their affiliates).
(c) INDEMNIFICATIONS. To the fullest extent permitted by law,
Guarantor agrees to protect, indemnify, defend and hold harmless Purchaser
and its affiliates and their respective directors, officers, employees,
agents and advisors ("INDEMNITEES") from and against any and all
liabilities, losses, damages or expenses of any kind or nature and from
any and all suits, claims or demands (including in respect of or for
reasonable attorney's fees and other expenses) arising on account of or in
connection with any matter or thing or action or failure to act by
Indemnitees, or any of them, arising out of or relating to this Guaranty or
the other Transaction Documents, including without limitation any use by
Guarantor of any proceeds of any Receivable purchases, except to the extent
such liability arises from the willful misconduct or gross negligence of
the Indemnitees. Upon receiving knowledge of any suit, claim or demand
asserted by a third party that Purchaser believes is covered by this
indemnity, Purchaser shall give Guarantor reasonable notice of the matter
and an opportunity to defend it, at Guarantor's sole cost and expense, with
legal counsel satisfactory to Purchaser. Any failure or delay of Purchaser
so to notify Guarantor of any such suit, claim or demand shall not relieve
Guarantor of its obligations under this SUBPARAGRAPH 8(c) but shall reduce
such obligations to the extent of any increase in those obligations caused
solely by such failure or delay. The obligations of Guarantor under this
SUBPARAGRAPH 8(c) shall survive the payment and performance of the
Guaranteed Obligations.
(d) CURRENCY OF PAYMENT.
(i) Guarantor shall make all payments of the Guaranteed
Obligations hereunder in the currency in
7-11
which such Guaranteed Obligations are required to be paid by Seller
pursuant to the other Transaction Documents and shall make all other
payments hereunder in the lawful currency of the United States.
(ii) If any sum due from Guarantor under this Guaranty or 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 (A) making or filing a claim or
proof against Guarantor with any Governmental Authority, (B) obtaining
an order or judgment in any court or other tribunal or (C) enforcing
any order or judgment given or made in relation hereto, Guarantor
shall, to the fullest extent permitted by law, indemnify and hold
harmless each of the Persons to whom such sum is due from and against
any loss suffered as a result of any discrepancy between (1) the rate
of exchange used for such purpose to convert the sum in question from
the first currency into the second currency and (2) the rate or rates
of exchange at which such Person may, using reasonable efforts in the
ordinary course of business, purchase the first currency with the
second currency upon receipt of a sum paid to it in satisfaction, in
whole or in part, of any such order, judgment, claim or proof. The
foregoing indemnity shall constitute a separate obligation of
Guarantor distinct from its other obligations hereunder and shall
survive the giving or making of any judgment or order in relation to
all or any of such obligations.
(e) WAIVERS; AMENDMENTS. Any term, covenant, agreement or condition
of this Guaranty may be amended or waived if such amendment or waiver is in
writing and is signed by Guarantor and Purchaser. No failure or delay by
Purchaser in exercising any right hereunder shall operate as a waiver
thereof or of any other right nor shall any single or partial exercise of
any such right preclude any other further exercise thereof or of any other
right. Unless otherwise specified in such waiver or consent, a waiver or
consent given hereunder shall be effective only in the
7-12
specific instance and for the specific purpose for which given.
(f) ASSIGNMENTS. This Guaranty shall be binding upon and inure to
the benefit of Guarantor and Purchaser and their respective successors and
permitted assigns, except that Guarantor may not assign or transfer any of
its rights or obligations under this Guaranty without the prior written
consent of Purchaser. All references in this Guaranty to any Person shall
be deemed to include all successors and assigns of such Person.
(g) CUMULATIVE RIGHTS, ETC. The rights, powers and remedies of
Purchaser under this Guaranty shall be in addition to all rights, powers
and remedies given to Purchaser by virtue of any applicable law, rule or
regulation of any Governmental Authority, the other Transaction Documents
or any other agreement, all of which rights, powers, and remedies shall be
cumulative and may be exercised successively or concurrently without
impairing Purchaser's rights hereunder.
(h) PAYMENTS FREE OF TAXES, ETC. All payments made by Guarantor
under this Guaranty shall be made by Guarantor free and clear of and
without deduction for any and all present and future taxes, levies,
charges, deductions and withholdings. In addition, Guarantor shall pay
upon demand any stamp or other taxes, levies or charges of any jurisdiction
with respect to the execution, delivery, registration, performance and
enforcement of this Guaranty. If any taxes, levies, charges or other
amounts are required to be withheld from any amounts payable to Purchaser
hereunder, the amounts so payable to Purchaser shall be increased to the
extent necessary to yield to Purchaser (after payment of all such amounts)
any such amounts payable hereunder in the amounts specified in this
Guaranty. Upon request by Purchaser, Guarantor shall furnish evidence
satisfactory to Purchaser that all requisite authorizations and approvals
by, and notices to and filings with, governmental authorities and
regulatory bodies have been obtained and made and that all requisite taxes,
levies and charges have been paid.
7-13
(i) PARTIAL INVALIDITY. If at any time any provision of this
Guaranty is or becomes illegal, invalid or unenforceable in any respect
under the law or any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of this Guaranty nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction shall in any way be affected or impaired thereby.
(j) JURY TRIAL. EACH OF GUARANTOR AND PURCHASER, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY.
(k) SUBMISSION TO JURISDICTION. Guarantor hereby irrevocably and
unconditionally:
(i) Submits for itself and its property in any legal action or
proceeding relating to this Guaranty, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive
jurisdiction of the courts of the State of California and the courts
of the United States of America for the Northern District of
California, and consents and agrees to suit being brought in such
courts as Purchaser may elect;
(ii) Waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that
such proceeding was brought in an inconvenient court and agrees not to
plead or claim the same; and
(iii) Agrees that nothing herein shall affect Purchaser's right to
effect service of process in any manner permitted by law, and that
Purchaser shall have the right to bring any legal proceedings
(including a proceeding for enforcement of a judgment entered by any
of the aforementioned courts) against Guarantor in such courts or in
any other court or jurisdiction in accordance with applicable law.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed as of
the day and year first above written.
7-14
LAM RESEARCH CORPORATION
By:
---------------------------
Name:
----------------------
Title:
---------------------
7-15
SCHEDULE 1
DEFINITIONS
"BUYER" shall have the meaning given to that term in SUBPARAGRAPH 2(a)
hereof.
"CAPITAL" shall mean, at any date as of which the amount thereof shall be
determined, the sum of (a) Total Debt and (b) Tangible Net Worth.
"CONTINGENT OBLIGATION" shall mean, as applied to any Person, direct or
indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with recourse by that Person,
or in respect of which that Person is otherwise directly or indirectly liable.
The amount of any Contingent Obligations shall be equal to the amount of the
obligation so guaranteed or otherwise supported.
"CONTRACTUAL OBLIGATION" of any Person shall mean, any indenture, note,
security, deed of trust, mortgage, security agreement, lease, guaranty,
instrument, contract, agreement or other form of obligation or undertaking to
which such Person is a party or by which such Person or any of its property is
bound.
"CURRENT LIABILITIES" shall mean, at any date as of which the amount
thereof shall be determined, the consolidated current liabilities of Guarantor
and its subsidiaries determined in accordance with GAAP.
"GOVERNMENTAL AUTHORITY" shall mean any domestic or foreign national, state
or local government, any political subdivision thereof, any department, agency,
authority or bureau of any of the foregoing, or any other entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including, without limitation, the
Federal Deposit Insurance Corporation, the Federal Reserve Board, the
Comptroller of the Currency, any central bank or any comparable authority.
7(1)-1
"GOVERNMENTAL RULE" shall mean any law, rule, regulation, ordinance, order,
code interpretation, judgment, decree, directive, guidelines, policy or similar
form of decision of any Governmental Authority.
"GUARANTEED OBLIGATIONS" shall have the meaning given to that term in
SUBPARAGRAPH 2(a) hereof.
"GUARANTOR" shall have the meaning given to that term in the INTRODUCTORY
PARAGRAPH hereof.
"GUARANTY" shall mean this Guaranty.
"LIEN" shall mean, with respect to any property, any security interest,
mortgage, pledge, lien, claim, charge or other encumbrance in, of, or on such
property or the income therefrom, including, without limitation, the interest of
a vendor or lessor under a conditional sale agreement, capital lease or other
title retention agreement, or any agreement to provide any of the foregoing, and
the filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable law of any jurisdiction.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of
Guarantor or Seller; (b) the ability of Guarantor or Seller to pay or perform
the Guaranteed Obligations in accordance with the terms of this Guaranty and the
other Transaction Documents; or (c) the rights and remedies of Purchaser under
this Guaranty, the other Transaction Documents, any Purchased Receivable or any
related document, instrument or agreement.
"PERSON" shall mean and include an individual, a partnership, a corporation
(including a business trust), a joint stock company, an unincorporated
association, a joint venture, a trust or other entity or a Governmental
Authority.
"POTENTIAL TERMINATION EVENT" shall have the meaning given to that term in
the Supplemental Purchase Agreement.
"SUPPLEMENTAL PURCHASE AGREEMENT" shall have the meaning given to that term
in RECITAL A hereof.
7(1)-2
"PURCHASED RECEIVABLE" shall have the meaning given to that term in RECITAL
A hereof.
"PURCHASER" shall have the meaning given to that term in the INTRODUCTORY
PARAGRAPH hereof.
"QUICK ASSETS" shall mean, at any date as of which the amount thereof shall
be determined, the consolidated cash, cash-equivalents, accounts receivable and
investments (including marketable securities), with maturities not to exceed 360
days, of Guarantor and its subsidiaries determined in accordance with GAAP.
"RECEIVABLE" shall have the meaning given to that term in RECITAL A hereof.
"REQUIREMENT OF LAW" applicable to any Person shall mean (a) the Articles
or Certificate of Incorporation and By-laws, Partnership Agreement or other
organizational or governing documents of such Person, (b) any Governmental Rule
applicable to such Person, (c) any license, permit, approval or other
authorization granted by any Governmental Authority to or for the benefit of
such Person and (d) any judgment, decision or determination of any Governmental
Authority or arbitrator, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"SELLER" shall have the meaning given to that term in RECITAL A hereof.
"SUBORDINATED DEBT" shall mean any debt subordinated to the obligations of
Guarantor hereunder on terms acceptable to Purchaser.
"SUBORDINATED OBLIGATIONS" shall have the meaning given to that term in
PARAGRAPH 7 hereof.
"TANGIBLE NET WORTH" shall mean, at any date as of which the amount thereof
shall be determined, the consolidated total assets of Guarantor and its
subsidiaries MINUS, without duplication, (a) the sum of any amounts attributable
to (i) goodwill, and (ii) tangible items such as unamortized debt discount and
expense,
7(1)-3
patents, trade and service marks and names, copyrights, franchises, treasury
stock, deferred charges and research and development expenses except prepaid
expenses, AND (b) Total Liabilities.
"TANGIBLE NET WORTH REQUIREMENT" shall mean, at any date as of which the
amount thereof shall be determined, the sum of (i) $250,000,000, PLUS (ii) fifty
percent (50%) of the sum of the consolidated net income of Guarantor and its
subsidiaries for each quarter (excluding any quarter in which such net income
was negative) which begins on or after July 1, 1994 and ends on or prior to such
date of determination, PLUS (iii) one hundred percent (100%) of the net proceeds
received by Guarantor and its subsidiaries from the sale of stock and other
equity securities issued by Guarantor and its subsidiaries and from other equity
contributions to Guarantor and its subsidiaries to the extent received on or
after April 1, 1995 and on or prior to such date of determination.
"TERMINATION EVENT" shall have the meaning given to that term in the
Supplemental Purchase Agreement.
"TOTAL DEBT" shall mean, at any date as of which the amount thereof shall
be determined, the sum (without duplication) of (a) short-term bank debt, (b)
current maturities of long-term debt and current portion of capitalized leases,
(c) long-term debt, (d) capitalized leases and (e) all off-balance sheet
obligations including Contingent Obligations and the face amount of all
outstanding letters of credit (including drawn and unreimbursed amounts).
"TOTAL LIABILITIES" shall mean, at any date as of which the amount thereof
shall be determined, all obligations that should, in accordance with GAAP be
classified as liabilities on the consolidated balance sheet of Guarantor.
"TRANSACTION DOCUMENTS" shall have the meaning given to that term in
SUBPARAGRAPH 2(a) hereof.
7(1)-4