U.S. $60,000,000.00
LOAN AGREEMENT
Dated as of May 17, 2001
between
Alliance Semiconductor Corporation
as Borrower
and
CITIBANK, N.A.,
as Lender
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CREDIT AGREEMENT dated as of May 17, 2001 among Alliance
Semiconductor Corporation a Delaware corporation (the "Borrower"), and CITIBANK,
N.A. ("Citibank" or the "Lender").
R E C I T A L S
WHEREAS, Lender has agreed to extend certain credit facilities to the
Borrower the proceeds of which will be used for operational purposes and;
WHEREAS, Borrower desires to secure all of the Obligations hereunder
by granting to Lender, a first priority Lien on the Pledged Stock (as defined
below) and any additional equity pledged under the Pledge Agreement from time to
time:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower and Lender agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1 Certain Defined Terms. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Advance" means the advance by the Lender to the Borrower pursuant to
Section 2.1.
"Affiliate" means, as to any Entity, any other Entity that, directly
or indirectly, controls, is controlled by or is under common control with such
Entity.
"Applicable Lending Office" means the office of the Lender specified
on the signature page hereof, or such other office of the Lender as the Lender
may from time to time specify to the Borrower.
"Base Rate" means, for any period, a fluctuating interest rate per
annum in effect from time to time which shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's Base Rate, and
(b) 0.50% per annum above the Federal Funds Rate.
"Business Day" means (a) a day on which banks are not required or
authorized to close in New York, New York and (b) unless a Base Rate is in
effect, on which dealings in deposits are carried on in the London interbank
market.
"Capital Stock" means, with respect to any Entity, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting and/or non-voting) of, such Entity's capital stock
or other ownership interests (including, without limitation, partnership
interests (whether general or limited) or limited liability company membership
interests), whether outstanding on, or issued after the date hereof, and any and
all rights (other than any evidence of indebtedness), warrants or options
exchangeable for or convertible into such Capital Stock or other ownership
interests, as the case may be.
"Central Depository" means the Taiwan Securities Central
Depository Co., Ltd.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment" has the meaning specified in Section 2.1.
"Debt" of any Entity means (a) indebtedness of such Entity for
borrowed money, (b) obligations of such Entity evidenced by bonds, debentures,
notes or other similar instruments.
"Default" means an Event of Default or an event that, with notice or
lapse of time or both, would become an Event of Default.
"Dollars" and "$" means lawful money of the United States of
America.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 4143 of the Code.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Events of Default" has the meaning specified in Section 6.1.
"Excluded Taxes" means, with respect to the Lender or any other
recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (a) income or franchise taxes imposed on (or measured by)
its net income by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office or
its Applicable Lending Office is located and (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located.
"Federal Funds Rate" means a fluctuating interest rate per annum
equal for each day to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Lender from three Federal funds brokers of recognized standing
selected by it.
"GAAP" means generally accepted accounting principles in the United
States.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
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"Interest Period" means the period beginning on the date the Advance
is made or on the last day of the immediately preceding Interest Period, and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each Interest Period shall be one month unless
the parties otherwise agree; provided, however, that (i) each Interest Period
that begins on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent
calendar month, (ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day,
except that if such extension would cause the last day of such Interest Period
to occur in the next following calendar month, the last day of such Interest
Period shall occur on the next preceding Business Day and (iii) any Interest
Period that would otherwise extend beyond the Maturity Date shall end on the
Maturity Date.
"Investment" means, with respect to any Entity, any advance, loan,
account receivable (other than an account receivable arising in the ordinary
course of business), or other extension of credit (including, without
limitation, by means of any Guarantee) or any capital contribution to (by means
of transfers of property to others, payments for property or services for the
account or use of others, or otherwise), or any purchase or ownership of any
stocks, bonds, notes, debentures or other securities of, any other Entity.
"Lender" means Citibank, N.A. and any other Entity that shall
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become a party pursuant to Section 7.5.
"LIBO Rate" means for any Interest Period:
(a) the offered rate for deposits in Dollars with a maturity
comparable to such Interest Period appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Lender from time to time, for purposes of providing quotations of interest
rates applicable to Dollar deposits in the London interbank market) as of
approximately 11:00 A.M. (London time) on the date two Business Days prior
to the commencement of such Interest Period;
(b) in the event that the rate referred to in clause (a) is
unavailable at such time for any reason, an interest rate per annum equal
to the rate per annum at which deposits in Dollars are offered by the
principal office of the Lender in London, England to prime banks in the
London interbank market at approximately 11:00 a.m. (London time) on the
date two Business Days before the first day of such Interest Period in the
amount of the Advance if the Advance were to be outstanding for such
Interest Period.
"LIBO Rate Reserve Percentage" for any Interest Period means the
effective rate (expressed as a percentage) at which reserve requirements
(including, without limitation, emergency, supplemental and other marginal
reserve requirements) are imposed on the Lender during such Interest Period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to such
Interest Period.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim, or preference
or priority or other encumbrance upon or with respect to any property of any
kind. A Entity shall be deemed to own subject to a Lien any property which such
Entity has acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement.
"Loan Documents" means this Agreement, the Note and the Pledge
---------------
Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and its Subsidiaries taken as a whole or (b) the ability of the
Borrower to perform its obligations under this Agreement or any of the other
Loan Documents.
"Maturity Date" unless such date is accelerated pursuant to the terms
hereof, shall mean November 19, 2001, the date on which payment by the Borrower
of all Obligations hereunder is due and owing to the Lender.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 4001(a)(3) of ERISA to which contributions have been made by the
Borrower or any ERISA Affiliate and that is covered by Title IV of ERISA.
"Note" has the meaning specified in Section 2.5(b).
"Obligations" shall mean all amounts owing to the Lender pursuant to
the terms of this Agreement or any other Loan Document
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or the Pledge
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Entity" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means an employee benefit or other plan established or
maintained by the Borrower or any ERISA Affiliate and that is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"Pledge Agreement" means that certain Pledge Agreement dated as of
May 17, 2001 substantially in the form of Exhibit B hereto.
"Pledged Stock" means shares of the common stock of United
Microelectronics Corp. that have been delivered to Lender or, to the Central
Depository, pursuant to the terms of the Pledge Agreement.
"Shares" means shares of the common stock of United
Microelectronics Corp.
"Subsidiary" means, with respect to any Entity, any corporation,
partnership, limited liability company or other entity of which at least a
majority of the shares of stock or other ownership interests having ordinary
voting power (without regard to the occurrence of any contingency) to elect a
majority of the board of directors or other managers of such entity is at the
time directly or indirectly owned or controlled by such Entity or one or more
Subsidiaries of such Entity or by such Entity and one or more Subsidiaries of
such Entity.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any governmental
authority.
.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCE
.
2.1 The Commitment. The Lender agrees, on the terms and conditions hereinafter
set forth, to make Advances to the Borrower in Dollars from time to time from
the date hereof through June 28, 2001 in the aggregate principal amount of
$60,000,000.00 (the "Commitment"). The Commitment shall be reduced to
$18,000,000.00 if the Lender notifies the Borrower that the Lender has a
reasonable belief that the proceeds from a sale or an anticipated sale of the
Pledged Stock may not readily and without undue cost and expense, be repatriated
to the USA.
2.2 Advance. The Lender will make the proceeds of any Advance available to the
Borrower by crediting the amount thereof, in immediately available funds, by no
later than 12:00 noon (New York City time) on the date following a request for
an Advance, to an account of the Borrower (Acct. No. 4296-905722, ABA No.
12000248) maintained with ▇▇▇▇▇ Fargo Bank at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇, Reference:
[-----------]).
2.3 Interest Elections. The initial Interest Period shall expire thirty days
from the date hereof. Borrower may elect subsequent Interest Periods as provided
in this Section 2.3. To make an election pursuant to this Section 2.03, the
Borrower shall notify the Lender of such election by telephone not later than
11:00 A.M. (New York City time) on the third Business Day prior to the effective
date of such election. Each such telephonic election shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Lender of a
written interest election request in a form approved by the Lender and signed by
the Borrower. Each telephonic and written interest election request shall
specify the following information:
(1) the effective date of the election made pursuant to such interest election
request, which shall be a Business Day; and
(2) the Interest Period to be applicable after giving effect to such election,
which shall be a period contemplated by the definition of the term "Interest
Period."
2.4 Termination of the Commitment. The Commitment shall automatically terminate
at 5:00 P.M. on the date hereof unless prior to such time the conditions
precedent set forth in Section 3.1 shall have been satisfied or waived and an
Advance shall have been made. The Commitment once terminated under this Section
2.4 may not be reinstated.
2.5 Repayment of Advance; Note.
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(a) The Borrower hereby unconditionally promises to pay to the Lender the
outstanding principal amount of the Advance on the Maturity Date.
(b) The Advances shall be evidenced by a single promissory note of the Borrower
(the "Note") in substantially the form of Exhibit A hereto, dated the date
hereof, payable to the Lender in a principal amount equal to the Commitment and
otherwise duly completed.
2.6 Prepayment of Advance.
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(a) Optional Prepayments. The Borrower shall have the right at any time
---------------------
and from time to time to prepay any Advance in whole or in part, subject
to the requirements of this Section 2.6.
(b) Terms Applicable to All Prepayments. The Borrower shall notify the Lender by
telephone (confirmed by telecopy) of any optional prepayment hereunder not later
than 11:00 A.M. (New York City time) three Business Days before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of the Advance or portion thereof to be
prepaid. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.7 and shall be made in the manner specified in Section
2.5(b).
2.7 Interest.
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(a) Subject to Sections 2.7(b) and 2.8, the Borrower agrees to pay interest on
the Advance during each Interest Period therefor at a rate per annum equal to
the LIBO Rate for such Interest Period plus 1.00% per annum.
(b) Notwithstanding the foregoing, if any principal of or interest on the
Advance or any fee or other amount whatsoever payable by the Borrower hereunder
is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest upon demand, after as well as
before judgment, at a rate per annum equal to (i) in the case of overdue
principal of the Advance, 2.00% per annum plus the rate otherwise applicable to
the Advance as provided above or (ii) in the case of any other amount, 1.00% per
annum above the Base Rate. Notwithstanding any contrary provision hereof, if an
Event of Default has occurred and is continuing and the Lender so notifies the
Borrower, then, so long as an Event of Default is continuing, the Advance shall
bear interest at the Base Rate at the end of the then current Interest Period.
(c) Accrued interest on the Advance shall be payable in arrears upon the
Maturity Date; provided, that (i) interest accrued pursuant to paragraph (b) of
this Section 2.7 shall be payable on demand and (ii) in the event of any
repayment or prepayment of the Advance, accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment.
(d) The Borrower agrees to pay to the Lender, so long as the Lender shall be
required under regulations of the Board of Governors of the Federal Reserve
System to maintain reserves with respect to liabilities or assets consisting of
or including Eurocurrency Liabilities (or the equivalent), additional interest
on the unpaid principal amount of the Advance, at an interest rate per annum
equal at all times to the remainder obtained by subtracting (i) the LIBO Rate
for the then current Interest Period for the Advance from (ii) the rate obtained
by dividing such LIBO Rate by a percentage equal to 100.00% minus the LIBO Rate
Reserve Percentage for such Interest Period, payable on each date on which
interest is payable on the Advance. A certificate of the Lender setting forth
the amount to which the Lender is then entitled under this Section 2.7(d) shall
be conclusive and binding on the Borrower in the absence of manifest error.
(e) All computations of interest based on the Base Rate shall be made on the
basis of a year of 365 or 366 days, as the case may be, and all computations of
interest based on the LIBO Rate and computations of interest pursuant to Section
2.7(d) shall be made on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable.
(f) Alternate Rate of Interest. If prior to the commencement of any
Interest Period the Lender determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the LIBO Rate for such Interest Period then the Lender shall give
notice thereof to the Borrower by telephone or telecopy as promptly as
practicable thereafter and, until the Lender notifies the Borrower that the
circumstances giving rise to such notice no longer exist the Advance shall bear
interest at the Base Rate plus 1.00% per annum.
2.8 Increased Costs.
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(a) If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements included in the
LIBO Rate Reserve Percentage) or in the interpretation of (to the extent any
such introduction or change occurs after the date hereof) any law or regulation
or (ii) the compliance with any guideline or request of any central bank or
other governmental authority adopted or made after the date hereof (whether or
not having the force of law), there shall be any increase in the cost to the
Lender of agreeing to make or making, funding or maintaining the Advance, the
Borrower shall from time to time, within 10 days after delivery by the Lender to
the Borrower of a certificate as to the amount of such increased cost, pay to
the Lender the amount of the increased costs set forth in such certificate
(which certificate shall be conclusive and binding on the Borrower in the
absence of manifest error).
(b) If the Lender determines that compliance with any law or regulation enacted
or introduced after the date hereof or any guideline or request of any central
bank or other governmental authority adopted or made after the date hereof
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by the Lender or any corporation
controlling the Lender and that the amount of such capital is increased by or
based upon the existence of the Lender's Commitment and other commitments of
this type, or the Advance, then, the Borrower shall pay to the Lender, within 10
days after delivery by the Lender to the Borrower of a certificate as to the
amount required to compensate the Lender therefor, the amount required to
compensate the Lender therefor (a certificate of the Lender as to such amount to
be conclusive and binding on the Borrower in the absence of manifest error).
2.9 Break Funding Payments. In the event of (a) the payment of any principal of
the Advance other than on the last day of an Interest Period (including as a
result of an Event of Default), (b) the conversion of the Advance other than on
the last day of an Interest Period therefor or (c) the failure to borrow,
convert, continue or prepay the Advance on the date specified in any notice
delivered pursuant hereto, then, in any such event, the Borrower shall
compensate the Lender for the loss, cost and expense attributable to such event,
which shall be deemed to include an amount determined by the Lender to be equal
to the excess, if any, of (i) the LIBO Rate for the balance of such Interest
Period (or for the Interest Period that would have commenced on such borrowing,
conversion, continuation or prepayment), over (ii) the amount of interest that
the Lender would earn on such principal amount for the balance of such Interest
Period (or for such Interest Period) if the Lender were to invest such principal
amount for such period at the interest rate that would be bid by the Lender (or
an Affiliate of the Lender) for Dollar deposits from other banks in the London
interbank market at the commencement of such period. A certificate of the Lender
setting forth any amount or amounts that the Lender is entitled to receive
pursuant to this Section 2.10 shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay the Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
2.10 Taxes.
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(a) Any and all payments by or on account of any obligation of the Borrower
hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.11) the Lender receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant governmental authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
governmental authority in accordance with applicable law.
(c) The Borrower shall indemnify the Lender, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.11) paid by the Lender and
any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant governmental authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by the Lender shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a governmental authority, the Borrower shall
deliver to the Lender the original or a certified copy of a receipt issued by
such governmental authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Lender.
2.11 Payments Generally.
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(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest or fees, or under Section 2.9, 2.10 or 2.11, or
otherwise) prior to 12:00 noon (New York City time) on the date when due, in
Dollars and immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Lender, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the
Lender at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. If any
payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension.
(b) If at any time insufficient funds are received by and available to the
Lender to pay fully all amounts of principal, interest and fees then due
hereunder, such funds shall be applied first, to pay interest then due
hereunder, then to pay fees and other amounts hereunder, then to pay principal
due hereunder.
(c) The Borrower agrees that at any time after the occurrence and during the
continuance of an Event of Default, in addition to (and without limitation of)
any right of set-off, banker's lien, or counterclaim the Lender may otherwise
have, the Lender shall be entitled, at its option, to offset balances held by it
for the account of the Borrower at any of its offices, in Dollars or in any
other currency, against any principal of or interest on the Advance to the
Borrower hereunder, or any other obligation of the Borrower hereunder, which is
not paid when due (regardless of whether such balances are then due to the
Borrower), in which case it shall promptly notify the Borrower; provided, that
failure to give such notice shall not affect the validity thereof.
ARTICLE III
CONDITIONS OF LENDING
3.1 Condition Precedent to an Advance. The obligation of the Lender to make an
Advance is subject to the condition precedent that the Lender shall have
received, on or before the date hereof, the following documents, each dated the
date hereof and in form and substance satisfactory to the Lender:
(a) A Note, duly executed by the Borrower, payable to the order of the Lender in
the principal amount of the Commitment.
(b) Certified copies of the certificate of incorporation or resolution of the
Board of Directors of the Borrower (or equivalent documents) authorizing the
Borrower to borrow money and pledge assets as collateral.
(c) A certificate of the Borrower certifying the names and true signatures of
the officers of the Borrower authorized to sign this Agreement, the Pledge
Agreement, the Note and any other documents to be delivered hereunder.
(d) A certificate of the Borrower as to the effect set forth in clauses (i) and
(ii) of the last paragraph of this Section 3.1.
(e) The Pledge Agreement, duly executed and delivered by each party and Shares
having a market value (as determined by the Lender) at least equal to 400% of
the Commitment have been delivered Pledgee, or to the Central Depository
pursuant to the Pledge Agreement.
(f) Evidence that the Borrower shall have paid all expenses relating to the
execution, delivery and negotiation of the Loan Documents and related matters
for which invoices have been presented, on or before such date (including,
without limitation, the fees and expenses of counsel to the Lender), to the
extent that statements for such fees and expenses have been delivered to the
Borrower.
(g) A duly completed Form FRU-1, satisfactory in form and substance to
the Lender.
The obligation of the Lender to make an Advance shall be subject to
the further conditions precedent that on the date hereof and on the date of any
Advance: (i) the representations and warranties set forth in Article IV are true
and correct, before and after giving effect to the Advance and to the
application of the proceeds thereof and (ii) no Default or Event of Default
hereunder and no breach of the Pledge Agreement would result from such Advance
or from the application of the proceeds thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
As of the date hereof and as of any date on which an Advance is
requested, the Borrower represents and warrants to the Lender that:
4.1 Organization. The Borrower is duly organized, validly existing and in good
standing under the laws of the State of Delaware.
4.2 Authorization; Enforceability. The execution, delivery and performance of
each of the Loan Documents by the Borrower are within the Borrower's corporate
powers and have been duly authorized by all necessary corporate action. Each of
the Loan Documents (other than the Note) has been duly executed and delivered by
the Borrower and constitutes, and the Note when duly executed and delivered for
value will constitute, a legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of creditors' rights and
(b) the application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
4.3 Government Approvals; No Conflicts. The execution, delivery and performance
of each of the Loan Documents by the Borrower (a) do not require any consent or
approval of, registration or filing with, or any other action by, any
governmental authority, (b) will not violate any applicable law or regulation or
the articles of incorporation, bylaws or other organizational documents of the
Borrower and (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon the Borrower.
4.4 Financial Condition; No Material Adverse Change. Borrower has heretofore
furnished to the Lender the consolidated balance sheet and statements of income,
stockholders' equity and cash flows of Borrower and its Subsidiaries as of
December 31, 2000. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of
Borrower as of such date and for such period in accordance with GAAP. Since
December 31 2000 no event or circumstance has occurred that has had a material
adverse effect on (a) the business, assets, operations, prospects or condition,
financial or otherwise, of Borrower and its Subsidiaries taken as a whole.
4.5 Litigation. There are no actions, suits or proceedings by or before any
arbitrator or governmental authority now pending against or, to the knowledge of
the Borrower, threatened against or affecting the Borrower (i) that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect or (ii) that involve this
Agreement or the transactions contemplated thereby.
4.6 Compliance with Laws and Agreements. The Borrower is in compliance with all
applicable laws, regulations and orders of any governmental authority applicable
to it or its property and all indentures, agreements and other instruments
binding upon it or its property, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
4.7 Investment and Holding Company Status. The Borrower believes it is not an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 and has applied to the United States Securities
and Exchange Commission for an exemption under the Investment Company Act of
1940. The Borrower is not a "holding company" as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.
4.8 Margin Stock. No portion of the proceeds of any borrowing under this
Agreement shall be used by the Borrower to purchase or carry any margin stock in
any manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of the Board or to violate
the Securities Exchange Act of 1934, in each case as in effect on the date or
dates of such borrowing and such use of proceeds.
ARTICLE V
COVENANTS OF THE BORROWER
5.1 Covenants. So long as any principal of or interest on the Advance or any
other amount payable hereunder or under the Note remains outstanding or the
Commitment remains in effect, the Borrower covenants and agrees that:
(a) The Borrower will (i) preserve and maintain its corporate existence and (ii)
comply with all applicable laws, statutes, rules, regulations and orders, except
for any non-compliance which could not (either individually or in the aggregate)
reasonably be expected to result in Material Adverse Effect.
(b) The Borrower will keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP, and permit
representatives of the Lender, during normal business hours, with the consent of
the Borrower (which consent shall not be unreasonably withheld), to examine,
copy and make extracts from its books and records, to inspect any of its
property, and to discuss its business and affairs with its officers, all to the
extent reasonably requested by the Lender.
(c) The Borrower will maintain insurance with financially sound and reputable
insurance companies, and with respect to property and risks of a character
usually maintained by corporations engaged in the same or similar business
similarly situated, against loss, damage and liability of the kinds and in the
amounts customarily maintained by such corporations.
(d) The Borrower will furnish to the Lender:
(1) as soon as possible and in any event within five Business Days after the
occurrence of any Default, a statement of the chief financial officer of the
Borrower setting forth details of such Default and the action which the Borrower
has taken and proposes to take with respect thereto;
(2) promptly after the sending or filing thereof, copies of all reports and
registration statements which the Borrower files with the Securities and
Exchange Commission or any national securities exchange; and
(3) such other information respecting the condition or operations, financial or
otherwise, of the Borrower as the Lender may from time to time reasonably
request.
(e) The Borrower will use the proceeds for its general operating requirements.
and to pay fees and expenses relating to the financing hereunder; provided, that
the Lender shall have no responsibility as to the use of any of such proceeds.
(f) The Borrower will not (i) sell, lease, assign, convey, transfer or other
dispose of, or (ii) create, incur, assume or suffer to exist any Lien or
encumbrance upon any of its property pledged to the Borrower under the Pledge
Agreement. except for Liens created pursuant to the Pledge Agreement.
(g) The Borrower will not declare or pay any extraordinary dividend in
respect of its common stock.
5.2 Maintenance of Pledge. Borrower hereby agrees that Lender will
not be obligated to Advance any funds hereunder unless prior to any such
Advance, Pledgor has delivered to Lender, or deposited with the Central
Depository for the Benefit of the Lender, pursuant to the Pledge Agreement a
number of Shares such that the market value of the Pledged Stock (as reasonably
determined by the Lender) is no less than 400% of the aggregate of the principle
and interest then outstanding. Thereafter Borrower agrees that whenever market
value of the Pledged Stock (as reasonably determined by the Lender) is less than
300% of the aggregate of the principle and interest then outstanding Borrower
shall pledge and deliver to Lender, or the Central Depository, pursuant to the
Pledge Agreement for the benefit of the Lender such additional Shares such that
subsequent to such delivery, the market value of the Pledged Stock (as
determined by the Lender) is no less than 400% of the aggregate of the principle
and interest then outstanding. Borrower it shall use its best efforts to provide
and maintain for Lender and its Affiliates a perfected first priority lien in
all of the Pledge Stock.
ARTICLE VI
EVENTS OF DEFAULT
6.1 Events of Default. If any of the following events ("Events of
------------------- -----------
Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of the Advance when the same
becomes due and payable; or the Borrower shall fail to pay any interest on the
Advance or any fee or other amount payable hereunder or under the Note when due
and such failure remains unremedied for three days; or
(b) Any representation or warranty made by the Borrower herein or in any
certificate or other document delivered in connection with this Agreement shall
prove to have been incorrect when made or deemed made; or
(c) The Borrower shall fail to materially perform or observe any term, covenant,
or agreement contained in this Agreement or the Pledge Agreement;
(d) The Borrower shall fail to pay any principal of or premium or interest on
any other Debt in an aggregate principal amount exceeding $ 5,000,000.00 of the
Borrower when the same becomes due and payable, and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition 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 scheduled required prepayment), redeemed, purchased
or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall
be required to be made, in each case prior to the stated maturity thereof; or
(e) Any judgment or order for the payment of money in excess of $5,000,000.00
shall be rendered against the Borrower, and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order and such
proceedings shall not have been stayed or (ii) there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(f) Borrower has merged with another Entity and the creditworthiness of the
resulting Entity is materially weaker than the creditworthiness of the Borrower
as of the date hereof.
(g) the Borrower shall breach the Pledge Agreement;
(h) The Pledge Agreement shall cease to be in full force and effect or shall be
declared null and void or the Lender shall cease to have a valid and perfected
First Priority Lien in any Collateral purporting to be covered thereby or the
Borrower shall contest the validity of the Pledge Agreement or deny that it has
any liability thereunder;
then, and in any such event, the Lender may, by notice to the Borrower, (i)
declare the obligation of the Lender to make Advance to be terminated, whereupon
the same shall forthwith terminate, and/or (ii) declare the Advance and the
Note, all interest thereon and all other Obligations to be forthwith due and
payable, whereupon the Advance and the Note, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an entry of an
order for relief with respect to the Borrower under the Federal Bankruptcy Code,
(A) the obligation of the Lender to make the Advance shall automatically be
terminated and (B) the Advance and the Note, all such interest and all such
Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
6.2 Exchange Controls etc. The Maturity Date shall be accelerated by
notice to Borrower from Lender if in the reasonable judgment of Lender
restrictions on the ownership or disposition of Shares, or restrictions on the
transfer or exchange of currency have been imposed such that Lender could not
readily sell the Pledged Shares or transfer the proceeds of such sale to the
United States of America.
ARTICLE VII
MISCELLANEOUS
7.1 Amendments, Etc. No amendment or waiver of any provision of this Agreement,
the Pledge Agreement, or the Note, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the parties hereto, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. This Agreement, the Pledge Agreement, and the Note and the documents
referred to herein and therein constitute the entire agreement of the parties
with respect to the subject matter hereof and thereof.
7.2 Notices, Etc. All notices and other communications provided for hereunder
shall be in writing (including telecopier, telegraphic, telex or cable
communication) and mailed, telecopied, telegraphed, telexed, cabled or
delivered, to the respective addresses set forth on the signature pages hereof
or at such other address as shall be designated by any party in a written notice
to the other party. All such notices and communications shall, when mailed,
telecopied, telegraphed, telexed or cabled, be effective when deposited in the
mails, telecopied, delivered to the telegraph company, confirmed by telex
answerback or delivered to the cable company, respectively, except that notices
and communications to the Lender pursuant to Article II or VII shall not be
effective until received by the Lender.
7.3 No Waiver; Remedies. No failure on the part of either party to exercise, and
no delay in exercising, any right hereunder, under the Pledge Agreement, or
under the Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided in equity or at law.
7.4 Costs, Expenses and Indemnification.
-----------------------------------
(a) The Borrower agrees to pay and reimburse on demand all reasonable costs and
expenses incurred by the Lender in connection with the preparation, negotiation,
execution and delivery, administration, modification, amendment or enforcement
of this Agreement, the Note and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Lender with respect thereto and with respect to advising the
Lender as to its rights and responsibilities under or in connection with this
Agreement.
(b) The Borrower hereby indemnifies the Lender and each of its Affiliates and
their respective officers, directors, employees, agents, advisors and
representatives (each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, fees and disbursements of counsel), joint or several, that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or relating to any investigation,
litigation or proceeding or the preparation of any defense with respect thereto
arising out of or in connection with or relating to this Agreement or the
transactions contemplated hereby or thereby or any use made or proposed to be
made with the proceeds of the Advance, whether or not such investigation,
litigation or proceeding is brought by the Borrower, any of its stockholders or
creditors, an Indemnified Party or any other Entity or an Indemnified Party is
otherwise a party thereto, and whether or not any of the conditions precedent
set forth in Article III are satisfied or the other transactions contemplated by
this Agreement are consummated, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct.
7.5 Assignments and Participations.
------------------------------
(a) The Lender may, without the consent of the Borrower, assign to another
Person all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of the Commitment, the Advance
and the Note); provided, however, that no such consent by the Borrower shall be
required in the case of any assignment to a Subsidiary or Affiliate of the
Lender.
(b) The Lender may sell participations to one or more banks or other entities in
or to all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment, the Advance
and the Note); provided, however, that the Lender's obligations under this
Agreement (including, without limitation, its Commitment hereunder) shall remain
unchanged.
(c) Upon receiving Borrower's written consent, which shall not be unreasonably
withheld, the Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 7.5, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower or any Subsidiaries or Affiliates thereof furnished to
the Lender by or on behalf of the Borrower.
(d) Notwithstanding any other provision set forth in this Agreement, the Lender
may at any time create a security interest in all or any portion of its rights
under this Agreement (including, without limitation, the Advance and the Note)
in favor of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System.
(e) All amounts payable by the Borrower to the Lender under Sections 2.7(d),
2.9, 2.10 and 7.4(b) shall be determined as if the Lender had not sold or agreed
to sell any participations in the Advance or the Note or its Commitment and as
if the Lender were funding each of the Advance and Commitment in the same way
that it is funding the portion of the Advance and Commitment in which no
participations have been sold.
7.6 Governing Law; Submission to Jurisdiction. This Agreement and the Note shall
be governed by, and construed in accordance with, the law of the State of New
York (without regard to its conflicts of law provisions). The Borrower hereby
submits to the nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York state court sitting in New
York County for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Borrower
irrevocably waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
7.7 Severability. In case any provision in this Agreement, the Pledge Agreement
or in the Note shall be held to be invalid, illegal or unenforceable, such
provision shall be severable from the rest of this Agreement or the Note, as the
case may be, and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
7.8 Execution in Counterparts. This 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 taken
together shall constitute one and the same agreement.
7.9 Survival. The obligations of the Borrower under Sections 2.7(d), 2.9, 2.10,
2.11 and 7.4 shall survive the repayment of the Advance and the termination of
the Commitment. Each representation and warranty made or deemed to be made
herein or pursuant hereto shall survive the making of such representation and
warranty, and the Lender shall not be deemed to have waived, by reason of making
any Advance, any Default or Event of Default that may arise by reason of such
representation or warranty proving to have been false or misleading.
7.10 Waiver of Jury Trial. EACH OF THE BORROWER AND THE LENDER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
7.11 No Fiduciary Relationship. The Borrower acknowledges that the Lender has no
fiduciary relationship with, or fiduciary duty to, the Borrower arising out of
or in connection with this Agreement or the Note, and the relationship between
the Lender and the Borrower is solely that of creditor and debtor. This
Agreement does not create a joint venture among the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
Alliance Semiconductor Corporation
By: /s/ N. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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N. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
CITIBANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇, Authorized Person
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT A
NOTE
U.S.$60,000,000.00 Dated: May 17, 2001
FOR VALUE RECEIVED, the undersigned Alliance Semiconductor
Corporation, a Delaware Corporation, (the "Borrower"), HEREBY PROMISES TO PAY to
the order of CITIBANK, N.A. (the "Lender") on November 19, 2001("the Maturity
Date") the principal sum of $60,000,000.00 (sixty million United States dollars)
or, if less, the aggregate outstanding principal amount of the Advances plus any
interest accrued as defined in and pursuant to the Loan Agreement as defined
below.
The Borrower promises to pay interest on the unpaid principal amount
of each Advance from the date of the Advance until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Loan Agreement.
Both principal and interest are payable in lawful money of the United
States of America at the office of the Lender at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇,
This Note is the Note referred to in, and is entitled to the benefits
of, the Loan Agreement dated as of May 17, 2001 (the "Loan Agreement", the terms
defined therein being used herein as therein defined) between the Borrower and
the Lender. The Loan Agreement contains provisions for acceleration of the
Maturity Date hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the Maturity Date hereof
upon the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Note shall be governed by, and construed in accordance with, the
laws of the State of New York, United States without regard to its conflicts of
law provisions.
Alliance Semiconductor Corporation
By: /s/ N. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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N. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
EXHIBIT B
[PLEDGE AGREEMENT]