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Loan Agreement

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Sectors: Computer Hardware
Governing Law: Republic of Korea
Effective Date: October 31, 1996
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LOAN AGREEMENT



THIS LOAN AGREEMENT (the "Agreement") is entered into as of this __th day of September, 1996 by and between



Maxtor Corporation, an U.S.A. subsidiary of Hyundai Electronics Industries

Co., Ltd. of the Republic of Korea, organized and existing under the laws

of the United States of America with its registered head office at 510

Cottonwood Drive, Milpitas, CA 95035, U.S.A. (the "Borrower"); and



Banque Paribas, Seoul Branch of 21st Floor, Kyobo Building, 1, 1-k,

Chongro, Chongro-ku, Seoul, Korea ("Paribas" which expression includes its

successors in title).



WHEREBY IT IS AGREED:



Clause 1. Interpretation



1.1 Definitions: In addition to those terms defined above, as used herein the

following terms shall have the meanings set forth below, which shall

include both the singular and plural thereof:



"Approved Institution": any bank or other financial institution notified

to the Borrower by the Lender in writing to be a Participant Assignee

under this Agreement;



"Assignee": in relation to any Transferable Loan Certificate, the Approved

Institution named therein as assignee of the Participation represented

thereby;



"Assignor": in relation to any Transferable Loan Certificate, the Lender

named therein as holder of the Participation represented thereby;



"Assignment Date": in relation to any assignment of a Participation, the

date of countersignature of the Transferable Loan Certificate representing

that Participation by Paribas pursuant to clause 17.2(C);



"Business Day": a day (other than a Saturday) on which banks are open in

Seoul and New York for the transaction of business of the nature required

by this Agreement and also, in relation to a day on which a payment is

required, in the place where such payment is to be made in accordance with

this Agreement;







"Drawing": the amount of the drawing made or to be made following the

delivery of the Drawing Notice under clause 4.1;



"Drawing Notice": a notice of drawing substantially in the form set out in

Schedule 1, duly completed and signed by the Borrower;



"Drawing Period": the period commencing on the date of this Agreement and

ending on the close of business in Seoul on October 31, 1996;



"Event of Default": any of the events mentioned in clause 12.1 or any

event which with the giving of notice and/or the lapse of time and/or a

determination being made under the relevant paragraph, would constitute

any of the events mentioned in clause 12.1;



"Facility": the transferable loan facility the terms and conditions of

which are set out in this Agreement;



"Guarantor": Hyundai Electronics Industries Co., Ltd., a juridical entity

(chusik hoesa), organized and existing under the laws of the Republic of

Korea with its registered office at 140-2 Kye-dong, Chongro-ku, Seoul,

Korea;



"Guarantee": the irrevocable and unconditional guarantee by the Guarantor

of the payment of all obligations of the Borrower due to the Lender

arising under or in connection with this Agreement, which guarantee shall

be substantially in the form of Exhibit A hereto and in any event in form

and substance satisfactory to the Lender;



"Interest Payment Date": the last day of an Interest Period;



"Interest Period": a period of six months but so that:



(a) the first Interest Period shall commence on the date of the Drawing;



(b) each subsequent Interest Period shall commence on the last day of the

previous one;



(c) an interest Period which would otherwise end on a day which is not a

Business Day shall end on the next succeeding Business Day or, if

that Business Day falls in the following month of the year, the

preceding Business Day;







(d) if an Interest Period is extended or shortened by the application of

(c) above, the following Interest Period shall (without prejudice to

the application of (c) above) end on the day on which it would have

ended if the preceding Interest Period had not been so extended or

shortened; and



(e) the final Interest Period shall end on the Repayment Date;



"Lender": Paribas and the Participant Assignees which are for the time

being participating in the Facility or the Loan and, where the context so

requires or admits, references to the Lender shall be construed as

references to any one or more of Paribas and the Participant Assignees,

save that references to the Lender in clauses 10.3(b), 12.1, 14.3, 14.11

and 19.5 shall be construed as references to Paribas (if the Drawing has

not been made) and to those of Paribas and the Participant Assignee for

the time being participating in excess of 50 per cent of the Loan (if the

Drawing has been made);



"Loan": the principal amount of the Drawing made and for the time being

outstanding;



"Margin": 0.5 per cent;



"Participant Assignee": at any time, an Approved Institution registered in

the Register at that time as the holder of a Participation and its

successor in title;



"Participation": all rights, title, benefit and interest in and to an

amount equal to US$1,000,000 or an integral multiple thereof of the Loan;



"Register": the register of Participant Assignees and Participations

maintained by Paribas pursuant to clause 18.1;



"Repayment Date": the date which is twelve (12) months after the date of

the Drawing;



"Security Interest": any mortgage, charge, pledge, lien, right of set off

or any other security interest whatsoever, howsoever created or arising;



"Transferable Loan Certificate": a certificate substantially in the form

set out in Schedule 3 representing a Participation which, when delivered

to Paribas in accordance with clause 17.2(a), evidences the assignment of

that Participation;



"US$ and dollars": the lawful currency of the United States of America

and, in relation to all payments to be





made under this Agreement, same day funds settled through the New York

Clearing House Interbank Payment System or such other funds as may for the

time being be customary for the settlement in New York City of

international payments in dollars.



1.2 Construction: Except where the context otherwise requires, any reference

in this agreement to:



(a) an "agreement" includes a concession, contract, deed, franchise,

license, private treaty or undertaking (in each case, whether oral or

written);



(b) the "assets" of the Borrower or the Guarantor shall be construed as a

reference to the whole or any part of its undertaking, property,

assets, revenues and rights;



(c) a "guarantee" includes any other obligation (whatsoever called)

of any person to pay, purchase, provide funds (whether by way of the

advance of money, the purchase of or subscription for shares or other

securities, the purchase of assets or services, or otherwise) for the

payment of, indemnify against the consequences of default in the

payment of, or otherwise be responsible for, any indebtedness of any

other person;



(d) "indebtedness" includes any obligation (whether present or future,

actual or contingent, secured or unsecured, as principal or surety or

otherwise) for the payment or repayment of money; and



(e) a "law" includes common or customary law and any constitution,

decree, judgment, legislation, order, ordinance, regulation, statute,

treaty or other legislative measure in any jurisdiction or any

present or future directive, regulation, request or requirement (in

each case, whether or not having the force of law but, if not having

the force of law, the compliance with which is in accordance with the

general practice of persons to whom the directive, regulation,

request or requirement is addressed).



1.3 Headings: Headings and the table of contents are for ease of reference



Clause 2. The Facility



2. Paribas agrees, subject to the provisions of this Agreement, to advance to

the Borrower a loan in the principal amount of US$10,000,000 for the

financing of the Borrower's working capital requirements.





- 4 -



Clause 3. Conditions Precedent



3. The Facility shall become available to the Borrower on the date two

Business Days after Paribas has received the following documents dated not

more than ten days before the date of the Drawing or such earlier date as

Paribas may in its discretion accept and in each case in form and content

satisfactory to Paribas:



(a) a certificate signed by a representative director of the Borrower

or a director of the Borrower authorized by the resolutions

referred to in such certificate for the purpose of this Agreement,

substantially in the form set out in Schedule 2-1, and the

documents therein referred to;



(b) a certificate signed by a representative director of the Guarantor

or a director of the Guarantor authorized by the resolutions

referred to in such certificate for the purposes of the Guarantee,

substantially in the form set out in Schedule 2-2, and the documents

therein referred to.



Clause 4. Drawing



4.1 Conditions: If:



(a) no Event of Default has occurred or would occur as a result of the

making of the Drawing;



(b) Paribas has received the Drawing Notice by the third Business Day

before the proposed date of the Drawing;



(c) there has been no material adverse change in the financial

condition of each of the Borrower and the Guarantor since the date

referred to in clause 8.1(h);



(d) each of the warranties mentioned in clause 8.1 remains accurate at

the proposed date of the Drawing as if given on that date by

reference to the facts and circumstances then existing, then,

subject to the provisions of this Agreement, the Borrower may on

any Business Day during the Drawing Period, but not thereafter,

make one single Drawing of US$10,000,000 under the Facility.









4.2 Drawing: Subject to the provisions of this Agreement, Paribas shall make

available to the Borrower the Drawing on the proposed date of the Drawing.



4.3 Irrevocability: The Drawing Notice shall be irrevocable and, subject to

clause 10, the Borrower shall borrow the stated amount on the stated date.



Clause 5. Interest



5.1 Rate:



(a) The rate of interest payable on the loan of any part of it for each

Interest Period shall be, subject to clause 5.1 (b), the rate per

annum determined by Paribas at its discretion to be the aggregate of

the Margin and the rate quoted as the average of the rates quoted on

the "LIBO" page of the Reuter financial information service as the

rate at which dollar deposits are offered to Paribas for the same

period as that Interest Period in the London Inter-bank market at or

about 11:00 a.m. (London time) on the second Business Day before the

commencement of that Interest Period or, if there is no "LIBO" page

at that time, the equivalent page (if any) of that service on which

such offered rates are quoted.



(b) If, in relation to any Interest Period, there is no page available

within that service or that service is not for any reason available

in London for the purpose of determining the rate of interest under

clause 5.1(a), the rate of interest for that Interest Period shall

be the rate per annum determined by Paribas at its discretion to be

the aggregate of the Margin and the rate at which dollar deposits

are offered for the same period as that Interest Period to Paribas

by prime banks in the London Inter-bank market, at or about 11:00

a.m. (London time) on the second Business Day before the

commencement of the Interest Period.



5.2 Payment: Interest under this Agreement shall be calculated on the basis of

actual days elapsed (not counting within an Interest Period the last day

of that Interest Period) and a year of 360 days and shall be paid by the

Borrower to Paribas for the account of the Lender in arrear on each

Interest Payment Date.



5.3 Certificate: Paribas shall notify the Borrower and the Lender of each rate

of interest as soon as it is determined under this Agreement. The

certificate of Paribas as to a rate of interest shall, in the absence of

manifest error, be conclusive.







Clause 6. Repayment



6. Subject to the provisions of this Agreement, the Loan shall be repaid in

full on the Repayment Date.



Clause 7. Prepayment



7.1 Prepayment: The Borrower may, without premium, prepay the Loan in whole or

in part (being US$1,000,000 or an integral multiple thereof) on any

Interest Payment Date provided that it has given Paribas not less than ten

Business Days' notice and evidence satisfactory to Paribas that all

authorizations necessary for the prepayment have been unconditionally



7.2 Irrevocability: A notice under clause 7.1 shall be irrevocable and the

Loan shall become due and payable on that Interest Payment Date.



7.3 Limitation: The Borrower shall not be entitled to prepay the Loan or any

part of it or cancel the Facility in whole or in part otherwise than as

specifically provided in this Agreement.



Clause 8. Representations and Warranties



A.1 By the Borrower: the Borrower acknowledges that Paribas has entered into

this Agreement in full reliance on representations by the Borrower in the

following terms; and the Borrower now warrants to the Lender that:



(a) Status: The Borrower is duly incorporated with limited liability

under the laws of the United States of America;



(b) Powers:



(i) the documents which contain or establish the Borrower's

constitution include provisions which authorize, and all

necessary corporate authority has been taken to authorize, and

all authorizations of any governmental or other authority have

been duly and unconditionally obtained and are in full force

and effect which are required to authorize, the Borrower to

own its assets, carry on its business as it is now being

conducted, and sign and deliver, and perform the transactions

contemplated in this Agreement and this Agreement constitutes

valid and binding obligations of the Borrower enforceable in

accordance with their terms; and









(ii) the documents which contain or establish the Guarantor's

constitution include provisions which authorize, and all

necessary corporate authority has been taken to authorize, and

all authorizations of any concerned authorities have been duly

and unconditionally obtained and are in full force and effect

which are required to authorize, the Guarantor to sign and

deliver, and perform the obligations contemplated in the

Guarantee and the Guarantee constitutes valid and binding

obligations of the Guarantor enforceable in accordance with

their terms;



(c) No contravention: neither the signing and delivery of this Agreement

nor the performance of any of the transactions contemplated in it

will;



(i) contravene or constitute a default under any provision contained

in any agreement, law, permit or consent by which the Borrower

and the Guarantor or any of their respective assets is bound or

affected; or



(ii) cause any limitation on the Borrower and the Guarantor or the

powers of their respective directors, whether imposed by or

contained in any document which contains or establishes their

respective constitutions or in any law, agreement or otherwise,

to be exceeded;



(d) No authorizations: no registration, recording, filing or notarization

of this Agreement and no payment of any duty or tax and no other

action whatsoever is necessary or desirable to ensure the validity,

enforceability or priority in the U.S.A. and the Republic of Korea of

the liabilities and obligations of the Borrower and the Guarantor or

the rights of the Lender and Paribas under this Agreement;



(e) No default: no event has occurred which constitutes, or which with

the giving of notice and/or the lapse of time and/or a relevant

determination would constitute, a contravention of, or default

under, any agreement or instrument by which the Borrower and the

Guarantor or any of its assets is bound or affected, being a

contravention or default which might either have a material adverse

effect on the business, assets or condition of the Borrower and the

Guarantor or materially and adversely affect its ability to observe or

perform its obligations under this Agreement;







(f) Litigation: no litigation, arbitration or administrative proceeding

or claim which might by itself or together with any other such

proceedings or claims either have a material adverse effect on its

business, assets or condition or materially and adversely affect its

ability to observe or perform its obligations under this Agreement,

is at present in progress or pending or, to the best of the

knowledge, information and belief of the Borrower, threatened against

the Borrower and the Guarantor or any of their respective assets;



(g) Tax liabilities: all necessary returns have been delivered by or on

behalf of the Borrower and the Guarantor to the relevant taxation

authorities and neither the Borrower nor the Guarantor is in default

in the payment of any taxes of a material amount, and no material

claim is being asserted with respect to taxes which is not disclosed

in the financial statements referred to in clause 8.1(h);



(h) Accounts: the audited financial statements (including the income

statement and balance sheet) of the Borrower and the Guarantor for

the year ended 31 December 1995 have been prepared on a basis

consistently applied and give a true and fair view of the results of

their respective operations for that year and the state of their

respective affairs at that date, and in particular accurately

disclose or reserve against all their respective liabilities (actual

or contingent) of the Borrower and the Guarantor;



(i) No immunity: the transactions on the part of the Borrower which are

contemplated in this Agreement represent transactions of a purely

commercial nature by the Borrower and neither the Borrower nor the

Guarantor nor any of their respective assets is entitled under the

laws of the U.S.A. and the Republic of Korea to any immunity

(sovereign or otherwise) from legal process (of any nature before or

after judgment) in respect of any such transactions;



(j) Information: the information furnished by the Borrower and the

Guarantor in connection with the Facility does not contain any untrue

statement or omit to state any fact the omission of which makes the

statements therein, in the light of the circumstances under which

they were made, misleading, and all expressions of expectation,

intention, belief and opinion contained therein were honestly made on

reasonable grounds after due and careful enquiry by the Borrower and

the Guarantor;



(k) Disclosure: the Borrower and the Guarantor have fully disclosed in

writing to Paribas all facts







relating to the Borrower and the Guarantor which the Borrower and

the Guarantor know or should reasonably know and which are material

for disclosure to the Lender in the context of this Agreement; and



(l) Guarantee: the Guarantee has been duly authorized and when executed,

will constitute a legal, valid and binding agreement, enforceable

against the Guarantor in accordance with its terms.



8.2 Survival: The representations and warranties set out in clause 8.1 shall

survive the signing and delivery of this Agreement and the making of the





Clause 9. Undertakings



9. The Borrower undertakes with the Lender that, from the date of this

Agreement until all its liabilities under this Agreement have been

discharged:



(a) Banking and negative pledge: the liabilities of the Borrower and the

Guarantor under this Agreement will rank at least equally and

rateably (pari passu) in point of priority and security with all its

other liabilities (both actual and contingent) except;



(i) liabilities which are subject to liens or rights of set off

arising in the normal course of trading and the aggregate

amount of which is not material;



(ii) liabilities which are preferred solely by the laws of the

U.S.A. and the Republic of Korea and not by reason of any

Security interest;



(iii) liabilities which are secured by Security Interests subsisting

as at the date of this Agreement;



(iv) liabilities which are secured by Security Interests on assets

acquired after the date of this Agreement, which Security

Interests were in existence prior to such acquisition or are

created at the time of acquisition only to secure the purchase

price of such assets;



(v) liabilities which are subject to Security Interests arising

out of pledges or deposits under workmen's compensation laws,

unemployment insurance, old age pensions or other social

security or retirement benefits or similar legislation; and



(vi) liabilities which are secured by Security Interests in any

construction contract awarded





to the Borrower or in the proceeds thereof or in any subsequent

guarantee in favour of the Borrower in connection with such a

construction contract provided that in each case such Security

Interest is (aa) in favor of any financial institution providing

performance bonds, advance payment guarantees or financing for

the account and for the benefit of the Borrower in respect of

such construction contract and (bb) limited to the face or

principal amount of such bonds, guarantees or financing plus

accrued interest and related fees and expenses,



and the Borrower will not create or permit to exist over all or any

part of its business or assets any Security interest (other than any

permitted under clause 2.(a)(i), (iii), (iv), (v) and (vi) unless the

benefit of the Security Interest is, upon its creation or arising,

extended equally and rateably, to the satisfaction of the Lender, to

the liabilities of the Borrower under this Agreement and so that, in

default of such extension, the person entitled to the Security

Interest shall (if he had notice of this undertaking) hold the

Security Interest (and any proceeds arising from its enforcement) pro

tanto upon trust for the Lender;



(b) Information: it will deliver to Paribas in sufficient numbers for the

Lender;



(i) as soon as they become available but in any event, within five

months after the end of each of its financial periods (which

shall not be longer than 15 months), copies of its financial

statements for that period which shall contain an income

statement and
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