Exhibit 99.6
EXECUTION COPY
$15,000,000
CHIPPAC INTERNATIONAL COMPANY LTD.
12 3/4% SENIOR SUBORDINATED NOTES DUE 2009
PURCHASE AGREEMENT
June 11, 2001
Citicorp Capital Investors, Limited
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. ChipPAC International Company Limited, a British Virgin
Islands corporation (the "COMPANY"), proposes, subject to the terms and
conditions stated herein, to issue and sell to Citicorp Capital Investors,
Limited, (the "PURCHASER") U.S. $15,000,000 principal amount of its 12 3/4%
Senior Subordinated Notes Due 2009 (the "SECURITIES"). ChipPAC, Inc., a Delaware
corporation ("CHIPPAC"), proposes, subject to the terms and conditions stated in
a certain Purchase Agreement, dated the date hereof (the "CONVERTIBLE NOTES
PURCHASE AGREEMENT"), among Citicorp Mezzanine III, L.P. ("CITICORP MEZZANINE"),
and ChipPAC, to issue and sell to Citicorp Mezzanine U.S. $50,000,000 principal
amount of its 8% Convertible Subordinated Notes Due 2011 (the "CONVERTIBLE
NOTES"). The transactions contemplated by this Agreement and the Convertible
Notes Purchase Agreement are collectively referred to herein as the "DEBT
TRANSACTIONS." The Securities are to be issued pursuant to and are "Additional
Securities" as defined in the Indenture (the "INDENTURE"), dated July 29, 1999,
as supplemented on August 5, 1999, among the Company, ChipPAC and Firstar Bank,
N.A., as trustee ("FIRSTAR"), on a private placement basis pursuant to an
exemption under Section 4(2) of the United States Securities Act of 1933 (the
"SECURITIES ACT"). The Convertible Notes are to be issued under an indenture
(the "CONVERTIBLE NOTES INDENTURE"), between ChipPAC and Firstar, on a private
placement basis pursuant to an exemption under Section 4(2) of the Securities
Act.
The Company's obligations under the Securities are guaranteed by
ChipPAC pursuant to the Company Guaranty contained in the Indenture (the
"COMPANY GUARANTY") and by each direct
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and indirect subsidiary of ChipPAC (other than ChipPAC Assembly and Test
(Shanghai) Company, Ltd. and ChipPAC (Shanghai) Company Ltd.) (the "SUBSIDIARY
GUARANTORS") pursuant to the Subsidiary Guaranty Agreement, dated August 5, 1999
(the "SUBSIDIARY GUARANTY AGREEMENT"). ChipPAC and the Subsidiary Guarantors are
sometimes referred to collectively as the "GUARANTORS".
Holders (including subsequent transferees) of the Securities will have
the registration rights set forth in the Registration Rights Agreement, dated as
of the Closing Date (as hereinafter defined) (the "REGISTRATION RIGHTS
AGREEMENT"), to be entered into between the Company and the Purchaser. Pursuant
to the Registration Rights Agreement, the Company has agreed to file with the
Securities and Exchange Commission (the "COMMISSION") a shelf registration
statement (the "SHELF REGISTRATION STATEMENT") pursuant to Rule 415 under the
Securities Act. The Company hereby agrees with the Purchaser as follows:
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND CHIPPAC. The Company
and ChipPAC represents and warrants to, and agrees with, the Purchaser that:
(a) Except as disclosed in the Exchange Act Reports (as hereinafter
defined), on the date of this Agreement, ChipPAC's Annual Report on Form
10-K most recently filed with the Commission, and all subsequent reports
which have been filed by ChipPAC with the Commission or sent to
stockholders pursuant to the Securities Exchange Act of 1934 (the "EXCHANGE
ACT") prior to or as of the date hereof and the description of Common Stock
contained in ChipPAC's Registration Statement on Form 8-A (collectively,
the "EXCHANGE ACT REPORTS") do not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Such documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder.
(b) Each of the Company and ChipPAC has been duly incorporated and is
an existing corporation in good standing under the laws of the jurisdiction
of its incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Exchange Act
Reports; and each of the Company and ChipPAC is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of
its business requires such qualification, except where the failure to be so
qualified and in good standing would not reasonably be expected to
individually or in the aggregate (x) result in a material adverse effect on
the properties, business, results of operations, financial condition or
prospects of each of the Company and ChipPAC and its subsidiaries taken as
a whole, (y) interfere with
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or adversely affect the issuance or marketability of the Securities or (z)
in any manner draw into question the validity of this Agreement or the
Exchange Act Reports (any of the events set forth in clauses (x), (y) or
(z), a "MATERIAL ADVERSE EFFECT").
(c) Each subsidiary of ChipPAC has been duly incorporated and is an
existing corporation in good standing (to the extent such a concept exists
in such jurisdiction) under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Exchange Act
Reports; and each subsidiary of ChipPAC is duly qualified to do business as
a foreign corporation in good standing (to the extent such a concept exists
in such jurisdiction) in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where such failure to be so qualified and in good
standing could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; all of the issued and
outstanding capital stock of each subsidiary of ChipPAC has been duly
authorized and validly issued and is fully paid and nonassessable; and
except for pledges in favor of Credit Suisse First Boston, as collateral
agent, under the Credit Agreement, dated as of August 5, 1999, as amended
(the "CSFB CREDIT AGREEMENT"), by and among the Company, ChipPAC, the
lenders listed therein and Credit Suisse First Boston, the capital stock of
each subsidiary owned by ChipPAC, directly or through subsidiaries, is
owned free from liens, encumbrances and defects.
(d) Each of the Indenture and the Registration Rights Agreement has
been duly authorized by the Company and ChipPAC, as applicable, and the
Subsidiary Guarantee Agreement is duly authorized by each of the Subsidiary
Guarantors by all necessary corporate action and the Securities have been
duly authorized by the Company; and when the Securities are delivered and
paid for pursuant to this Agreement and the Indenture on the Closing Date
(as hereinafter defined) the Indenture and the Registration Rights
Agreement will have been duly executed and delivered by the Company, such
Securities (i) will have been duly executed, authenticated, issued and
delivered, (ii) will conform to the descriptions thereof contained in the
Indenture (when executed and delivered by the parties thereto) and (iii)
will constitute valid and legally binding obligations of the Company and
ChipPAC, as applicable, enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless of whether
enforceability is considered in a proceeding at law or equity). The Company
Guaranty with respect to the Securities constitutes a valid and legally
binding obligation of ChipPAC, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
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affecting creditors' right and to general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in
equity). The Subsidiary Guaranty Agreement with respect to the Securities
constitutes a valid and legally binding obligations of the Subsidiary
Guarantors enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
right and to general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
(e) Except for (i) obligations to Credit Suisse First Boston
Corporation ("CSFB") pursuant to a certain engagement letter, dated
February 1, 2001 (the "CSFB ENGAGEMENT AGREEMENT"), between CSFB and
ChipPAC and (ii) Xxxxxxxx Xxxxx & Company, Inc. ("XXXXXXXX") pursuant to a
certain engagement letter, dated June 5, 2001 (the "XXXXXXXX ENGAGEMENT
AGREEMENT"), between ChipPAC and Xxxxxxxx, there are no contracts,
agreements or understandings between ChipPAC or its subsidiaries and any
person that would give rise to a valid claim against ChipPAC or its
subsidiaries or the Purchaser for a brokerage commission, finder's fee or
other like payment in connection with the sale of the Securities. The
Purchaser has no liability or obligation (monetary or otherwise) to pay any
fees, expenses or commissions in connection with the CSFB Engagement
Agreement or the Xxxxxxxx Engagement Agreement. XxxxXXX has furnished to
the Purchaser true, correct and complete copies of the CSFB Engagement
Agreement and the Xxxxxxxx Engagement Agreement.
(f) There are no contracts, agreements or understandings between
ChipPAC and any person granting such person the right to require ChipPAC to
file a registration statement under the Securities Act with respect to any
securities of ChipPAC owned or to be owned by such person or to require
ChipPAC to include such securities in the securities registered pursuant to
the Shelf Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Securities Act, other than (i) the Amended and Restated Registration
Agreement, dated as of August 5, 1999, as amended, among ChipPAC,
affiliates of Xxxx Capital, Inc. and SXI Group LLC and their designees,
Hynix Semiconductor America Inc. and Intel, and (ii) the Registration
Rights Agreement, dated the Closing Date, between Citicorp Capital
Investors, Ltd. and ChipPAC, Inc.
(g) Subject to the express assumptions set forth in Section 2(o)
below, no consent, approval, authorization, order, registration or
qualification of, or filing with, any governmental agency or body or any
court is required for the consummation of the transactions contemplated by
this Agreement and the Registration Rights Agreement in connection with the
issuance and sale of the Securities by the Company, except (i) as
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required pursuant to the Registration Rights Agreement, including those
required under the Securities Act and the rules and regulations of the
Commission thereunder and (ii) such consents, approvals, authorizations or
qualifications as may be required under state securities laws in connection
with the purchase of the Securities by the Purchaser.
(h) The execution, delivery and performance of the Indenture, the
Registration Rights Agreement and this Agreement, and the issuance and sale
of the Securities and compliance with the terms and provisions thereof will
not result in a breach or violation of any of the terms and provisions of,
or constitute a default under, (i) any statute, rule, regulation or order
of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over ChipPAC or any subsidiary of ChipPAC or any of
their properties, or (ii) any agreement or instrument to which ChipPAC or
any such subsidiary is a party or by which ChipPAC or any such subsidiary
is bound or to which any of the properties of ChipPAC or any such
subsidiary is subject, or (iii) the charter or by-laws of ChipPAC or any
such subsidiary, except (A) in each case, that any rights to indemnity and
contribution may be limited by federal and state securities laws and public
policy considerations and (B) in the case of clauses (i) and (ii) for such
breaches, violations or defaults that would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; and
the Company has full power and authority to authorize, issue and sell the
Securities as contemplated by this Agreement.
(i) This Agreement has been duly authorized, executed and delivered by
the Company and ChipPAC.
(j) ChipPAC and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to ChipPAC or any of its subsidiaries, would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(k) ChipPAC and its subsidiaries own, possess, have the right to use
or can acquire on reasonable terms, adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively, "INTELLECTUAL
PROPERTY RIGHTS") necessary to conduct the business now operated by them,
or presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property Rights that,
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if determined adversely to ChipPAC or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(l) The financial statements included in the Exchange Act Reports
present fairly the financial position of ChipPAC and its consolidated or
combined subsidiaries as of the dates shown and their results of operations
and cash flows for the periods shown, and such financial statements have
been prepared in conformity with the generally accepted accounting
principles in the United States applied on a consistent basis; and the
assumptions used in preparing the pro forma financial statements included
in the Exchange Act Reports provide a reasonable basis for presenting the
significant effects directly attributable to the transactions or events
described therein, the related pro forma adjustments give appropriate
effect to those assumptions, and the pro forma columns therein reflect the
proper application of those adjustments to the corresponding historical
financial statement amounts.
(m) Except as disclosed in the Exchange Act Reports, since the date of
the latest audited financial statements included in the Exchange Act
Reports there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
ChipPAC and its subsidiaries taken as a whole, and, except as disclosed in
or contemplated by the Exchange Act Reports, there has been no dividend or
distribution of any kind declared, paid or made by ChipPAC on any class of
its capital stock.
(n) Neither the Company nor any Guarantor is an open-end investment
company, unit investment trust or face-amount certificate company that is
or is required to be registered under Section 8 of the United States
Investment Company Act of 1940 (the "INVESTMENT COMPANY ACT"); and neither
the Company nor any Guarantor is or, after giving effect to the offering
and sale of the Securities, will be an "investment company" as defined in
the Investment Company Act.
(o) Assuming that the representations and warranties of the Purchaser
contained in Section 4 below are true in all material respects, the offer
and sale of the Securities by the Company to the Purchaser in the manner
contemplated by this Agreement will be exempt from the registration
requirements of the Securities Act by reason of Section 4(2) thereof and
the Indenture has been qualified in respect of the Securities under the
United States Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE
ACT").
(p) None of the Company, ChipPAC, nor any of their respective
affiliates, nor any person acting on its or their behalf (i) has within the
six-month period prior to the date hereof, offered or sold the Securities
or any securities of the same class or series as the
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Securities or (ii) has offered or will offer or sell the Securities by
means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act.
(q) ChipPAC is subject to Section 13 or 15(d) of the Exchange Act
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
if requested by the Company, the Purchaser agrees, to purchase from the
Company the Securities, at a purchase price of 98% of the principal amount
thereof.
(b) In consideration of the Purchaser's commitment to purchase the
Securities as set forth in Section 3(a), the Company agrees to pay to the
Purchaser a commitment fee in an amount equal to 3 3/4% of the principal
amount of the Securities. Such commitment fee shall be fully earned upon
execution of this Purchase Agreement and shall be payable in full in cash
upon the earlier of (i) the consummation of the transactions contemplated
hereby and (ii) the termination of this Purchase Agreement.
(c) The Company will deliver against payment of the purchase price,
the Securities in the form of one or more permanent global securities in
definitive form without interest coupons (the "GLOBAL SECURITIES")
deposited with the Trustee as custodian for the Depositary Trust Company
("DTC") and registered in the name of Cede & Co., as nominee for DTC.
Interests in any permanent Global Securities will be held only in
book-entry form through DTC. The Global Securities shall include the legend
regarding restrictions on transfer set forth in the Indenture.
(d) Payment for the Securities shall be made by the Purchaser in
Federal (same day) funds by wire transfer to an account at a bank
designated by the Company and acceptable to the Purchaser at a location to
be mutually determined by the Company and the Purchaser commencing at 10:00
a.m. (New York time) on such date as the Purchaser and the Company mutually
determine, such time being herein referred to as the "CLOSING DATE,"
against delivery to the Trustee as custodian for DTC of the Global
Securities representing all the Securities. The Global Securities will be
made available for checking at least 24 hours prior to the Closing Date.
4. REPRESENTATIONS BY THE PURCHASER. The Purchaser represents and warrants
to the Company that:
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(a) The Purchaser (or its principals or advisors) has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has
the capacity to protect its own interests. The Purchaser acknowledges that
its investment in the Company is highly speculative and entails a
substantial degree of risk and the Purchaser, is in a position to lose the
entire amount of such investment.
(b) The Purchaser represents and warrants to the Company that it is an
"accredited investor" within the meaning of Regulation D under the
Securities Act.
(c) The Purchaser acknowledges that the Securities have not been
registered under the Securities Act by reason of a specific exemption from
the registration provision of the Securities Act, the availability of which
depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of the Purchaser's representations as expressed
herein, and such Securities must be held indefinitely and may not be
offered or sold unless subsequently registered under the Securities Act or
unless, except pursuant to an exemption from the registration requirements
of the Securities Act is available.
(d) The Purchaser understands that the certificates evidencing the
Securities will be imprinted with a legend that prohibits the transfer of
such securities unless they are registered or such registration is not
required.
(e) The Purchaser is acquiring the Securities and the Underlying
Shares for investment for its own or an affiliate account, not as a nominee
or agent, and not with the view to, or for resale in connection with, any
distribution thereof other than in compliance with the Securities Act.
(f) The Purchaser has had an opportunity to discuss the Company's
business, management and financial affairs with its management. The
Purchaser has also had an opportunity to ask questions of officers of the
Company.
(g) This Agreement and the Registration Rights Agreement, when
executed and delivered by the Purchaser, will constitute valid and legally
binding obligations of the Purchaser, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles
(regardless of whether enforceability is considered in a proceeding at law
or equity).
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(h) The Purchaser has not engaged any brokers, finders or agents, and
the Company has not incurred and will not incur, directly or indirectly, as
a result of any action taken by the Purchaser, any liability for brokerage
or finders' fees or agents' commissions or any similar charges in
connection with the transactions contemplated hereby. In the event that the
preceding sentence is in any way inaccurate, such Purchaser agrees to
indemnify and hold harmless the Company from any liability for any
commission or compensation in the nature of a finder's fee (and the costs
and expense of defending against such liability) for which the Company or
any of its officers, directors, employees or representatives, is
responsible.
(i) The Purchaser has reviewed with its own tax advisors the federal,
state, local and foreign tax consequences of this investment and the
transactions contemplated hereby. With respect to such matters, the
Purchaser relies solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Purchaser
understands that it (and not the Company) shall be responsible for its own
tax liability that may arise as a result of this investment or the
transactions contemplated hereby.
5. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the Purchaser
that:
(a) The Company will cooperate with the Purchaser and its counsel in
connection with the registration and qualification of the Securities for
sale and the determination of their eligibility for investment under the
laws of such states in the United States as the Purchaser shall designate
and do all things necessary to continue such qualifications in effect so
long as required for the resale of the Securities by the Purchaser,
provided that the Company will not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
state.
(b) During the period of five years hereafter, ChipPAC will furnish to
the Purchaser, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year via the same method
used to distribute such report generally to all stockholders of ChipPAC, if
such distribution is effected other than via the Securities and Exchange
Commission's Electronic Data Gathering, Analysis and Retrieval system
("XXXXX"); and ChipPAC will furnish to the Purchaser as soon as available,
a copy of each report and any definitive proxy statement of ChipPAC filed
with the Commission under the Exchange Act or mailed to stockholders, which
copies shall in each case be sent to the Purchaser via the same method used
to distribute such report or proxy statement generally to all stockholders
of ChipPAC if such distribution is effected other than via XXXXX.
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(c) The Company will pay all expenses incidental to the performance of
its obligations under this Agreement, the Indenture and the Registration
Rights Agreement, including (i) the fees and expenses of the Trustee and
its professional advisers; (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the
Securities, the preparation and printing of this Agreement, the Securities,
the Registration Rights Agreement and any other document relating to the
issuance, offer, sale and delivery of the Securities; (iii) the cost of
qualifying the Securities for trading in The Portal(SM) Market ("PORTAL")
of The Nasdaq Stock Market, Inc. and any expenses incidental thereto;
and (iv) any fees charged by investment rating agencies for the rating of
the Securities.
(d) The Company and ChipPAC shall use approximately $50.0 million of
the net proceeds from the sale of the Securities and the Convertible Notes
to repay certain indebtedness incurred pursuant to the CSFB Credit
Agreement. The remainder of the net proceeds shall be used for general
corporate purposes.
(e) Upon registration under the Securities Act for the resale of the
Securities pursuant to the Registration Rights Agreement, the CUSIP number
of the Securities will be identical in all respects to the CUSIP number of
the currently outstanding 12 3/4% Senior Subordinated Notes due 2009 issued
under the Indenture.
6. CONDITIONS OF THE OBLIGATIONS OF THE PURCHASER. The obligations of the
Purchaser to purchase and pay for the Securities on the Closing Date will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of officers of the Company
made pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) The Purchaser shall have received an opinion, dated the Closing
Date, of Xxxxxxxx & Xxxxx, special counsel for the Company and ChipPAC, in
form and substance reasonably acceptable to the Purchaser and the Company.
(b) The Purchaser shall have received an opinion, dated the Closing
Date, of Xxxxxx Xxxxxxxx Riegels, British Virgin Islands counsel to the
Company in form and substance reasonably acceptable to the Purchaser and
the Company.
(c) The Purchaser shall have received an opinion, dated the Closing
Date, of Xxxxxxxx & Xxxxx, to the Trustee, as required by Section 13.04 of
the Indenture.
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(d) The Purchaser shall have received a certificate, dated the Closing
Date, of an authorized officer of the Company, as required by Section 2.13
of the Indenture.
(e) The Purchaser shall have received a certificate, dated the Closing
Date, of an authorized officer of the Company, as required by Section 13.04
of the Indenture.
(f) XxxxXXX shall have furnished to the Purchaser the opinion of
Xxxxxxxx X. XxXxxx, Senior Vice President Administration, General Counsel
and Secretary of ChipPAC, dated the Closing Date, in form and substance
reasonably acceptable to the Purchaser.
(g) The Purchaser shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that (i) no event shall have occurred and be continuing or would result
from the consummation of the transactions contemplated by this Agreement
which would constitute a Default (as defined in the Indenture) or Event of
Default (as defined in the Indenture) and (ii) that the Company has
complied in all material respects with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior
to such Closing Date.
(h) The Purchaser shall have received a copy of the Authentication
Order to the Trustee with respect to the Securities.
(i) On or before the Closing Date, the Purchaser shall have received
the following items, each of which shall be in form and substance
satisfactory to the Purchaser and, unless otherwise noted, dated the
Closing Date:
(i) Certified copies of the organizational documents of the
Company, certified by the proper public official of the British Virgin
Islands, together with a good standing certificate, if available, or
other similar certificate from the proper public official of the
British Virgin Islands, each to be dated a recent date prior to the
Closing Date;
(ii) Resolutions of the Company's Board of Directors, XxxxXXX's
Board of Directors, and each of the Guarantors' Board of Directors, as
applicable, and, if necessary, stockholders, approving and authorizing
the execution, delivery and performance of the Registration Rights
Agreement and this Agreement and any other documents, instruments and
certificates required to be executed by each party thereto in
connection therewith and approving and authorizing the execution,
delivery
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and payment of the Securities, certified as of the Closing Date by the
Secretary of the Company and XxxxXXX's Secretary, as applicable, as
being in full force and effect without modification or amendment;
(iii) Signature and incumbency certificates of the officers of
the Company and ChipPAC, as applicable, executing the Registration
Rights Agreement and this Agreement; and
(iv) Executed copies of this Agreement, the Securities and the
Registration Rights Agreement (substantially in the form of the draft
attached hereto as Exhibit A, with such changes as the parties may
mutually agree).
(j) The Company shall have performed in all material respects all
agreements which this Agreement provides shall be performed on or before
the Closing Date (except as otherwise consented to in writing by the
Purchaser).
(k) No event shall have occurred and be continuing or would result
from the consummation of the transactions contemplated by this Agreement
which would constitute a Default (as defined in the Indenture) or Event of
Default (as defined in the Indenture).
(l) No order, judgment or decree of any court, arbitrator or
governmental authority shall enjoin or restrain the Purchaser from
purchasing the Securities or consummating the transactions contemplated by
this Agreement and the Registration Rights Agreement and there shall not be
existing, or to the knowledge of the Company threatened, any action, suit,
proceeding, governmental investigation or arbitration against or affecting
the Company or any of its subsidiaries which would reasonably be expected
to result in such an order, judgement or decree.
(m) No injunction or other restraining order shall have been issued
and no hearing to cause an injunction or other restraining order to be
issued shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, this Agreement or
the purchasing of the Securities.
(n) The Purchaser shall have received payment in full for all expenses
(including reasonable attorneys' fees) incurred in connection with the
negotiation and execution of this Agreement, the Registration Rights
Agreement and the Securities.
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(o) ChipPAC or its affiliate shall concurrently receive the proceeds
from the sale of the 8% Convertible Notes pursuant to the Convertible Notes
Purchase Agreement.
(p) On the date of this Agreement, the Special Committee of the Board
of Directors of ChipPAC shall have received and shall furnish to the
Purchaser an opinion of Xxxxxxxx, in form and substance reasonably
satisfactory to the Purchaser, confirming the fairness from a financial
point of view to the disinterested stockholders of ChipPAC of the terms of
the Debt Transactions, and that the terms of the Debt Transactions are no
less favorable to ChipPAC than those that could be obtained in arm's length
dealings with a third party.
(q) The CSFB Credit Agreement shall have been amended prior to the
Closing Date to the extent necessary to permit the sale of the Securities
and the Convertible Notes pursuant to this Agreement and the Convertible
Notes Purchase Agreement to be effected without resulting in an Event of
Default (as such term is defined under the CSFB Credit Agreement).
The Purchaser may in its discretion waive compliance with any conditions to
its obligations hereunder, whether in respect of the Closing Date or otherwise.
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY. The obligations of the
Company to sell the Securities on the Closing Date will be subject to the
accuracy of the representations and warranties on the part of the Purchaser
herein, to the performance by the Purchaser of its obligations hereunder and to
the following additional conditions precedent:
(a) The Company shall have received from Purchaser the Selling Notice
and Questionnaire in connection with the Registration Rights Agreement, on
or prior to Closing Date.
8. TERMINATION. This Agreement may be terminated at any time prior to the
Closing Date:
(a) by the mutual written consent of Company and Purchaser;
(b) by the Company or Purchaser, if any injunction or other order of a
court or other competent authority preventing the consummation of the
transactions contemplated hereby shall have become final and
non-appealable; or
(c) by either Purchaser or the Company, if the transactions
contemplated hereby shall not have been consummated before June 28, 2001;
PROVIDED, that the party seeking to
14
terminate this Agreement is not otherwise in breach in any material respect
of any of its obligations hereunder.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) In addition to the payment of expenses pursuant to Section 5(c),
and provided that the Purchaser provides notice of a claim against the
Company within the Survival Period as such term is defined in Section 10,
the Company (as "INDEMNITOR") agrees to indemnify, pay and hold the
Purchaser, and the officers, directors, employees, agents and affiliates of
the Purchaser (collectively called the "INDEMNITEES") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable
fees and disbursements of one counsel for such Indemnitees in connection
with any investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Indemnitee shall be designated a party
thereto) ("DAMAGES"), which may be imposed on, incurred by, or asserted
against that Indemnitee, in any manner relating to or arising out of a
breach of any of the Company's representations, warranties and covenants
contained herein; PROVIDED, HOWEVER, that the Company shall not be
obligated to indemnify the Indemnitees from and against any Damages (A)
until the Indemnitees have suffered aggregate Damages by reason of all such
breaches in excess of a $1,000,000 deductible (the "DEDUCTIBLE AMOUNT")
(after which point the Company will be obligated to indemnify the
Indemnitees for all Damages, including, without limitation, the Deductible
Amount) or thereafter (B) to the extent the aggregate Damages the
Indemnitees have suffered by reason of all such breaches exceeds
$50,000,000 (after which point the Company will have no obligation to
indemnify the Indemnitees from and against further such Damages).
(b) Except for those claims or causes of action based on fraud that
may be brought under (A) any state or Federal securities laws or (B)
predicated on any state common law, the Purchaser and the Company
acknowledge and agree that the foregoing indemnification provisions in this
Section 9 shall be the exclusive remedy of the Purchaser with respect to
the Company and the transactions contemplated by this Agreement.
Notwithstanding anything herein to the contrary, recovery by an
Indemnitee pursuant to this Section 9 shall in no event include any special,
indirect, punitive, incidental or consequential damages.
10. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
agreements, representations and warranties of the Company or its officers and of
the Purchaser set forth in or made pursuant to this Agreement will remain in
full force and effect until the 30th day following the Com-
15
pany's filing of its Annual Report on Form 10-K for the year ended December 31,
2001 (the "SURVIVAL PERIOD"), regardless of any investigation, or statement as
to the results thereof, made by or on behalf of the Purchaser, the Company or
any of their respective representatives, officers or directors or any
controlling person, and will survive delivery of and payment for the Securities
until the 30th day following the Company's filing of its Annual Report on Form
10-K for the year ended December 31, 2001; PROVIDED, HOWEVER, that those
agreements contained in Sections 5(a), 5(b), 9, 11, 12, 14 and 15 shall survive
for the periods set forth therein. If for any reason the purchase of the
Securities by the Purchaser is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
5. If the purchase of the Securities by the Purchaser is not consummated for any
reason, the Company will reimburse the Purchaser for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Securities; PROVIDED, HOWEVER, that any
commitment fee actually paid will be credited against such obligation.
11. NOTICES. All communications hereunder will be in writing and, if sent
to the Purchaser will be mailed, delivered or telegraphed and confirmed to the
Purchaser, c/o Citicorp Capital Investors, Limited, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Investment Manager, or, if sent to the Company, will
be mailed, delivered or telegraphed and confirmed to it at ChipPAC, Inc., 00000
Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxxxxxx.
12. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns and the
controlling persons referred to in Section 9, and no other person will have any
right or obligation hereunder. Notwithstanding anything to the contrary,
successors and assigns as a result of transfers pursuant to a registered
offering under the Securities Act or in Rule 144A transactions shall not have
the benefits of this Agreement.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
15. CONSENT TO JURISDICTION. The Company hereby submits to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
16
[SIGNATURE PAGE TO FOLLOW]
17
If the foregoing is in accordance with the Purchaser's understanding of
our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
Purchaser in accordance with its terms.
Very truly yours,
ChipPAC International Company Limited,
By: /s/ XXXXXX XXXXXX
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Director
ChipPAC, Inc.,
By: /s/ XXXXXX X. XxXXXXX
------------------------------------
Name: Xxxxxx X. XxXxxxx
Title: Chairman, Chief Executive
Officer and President
The foregoing Purchase Agreement is hereby
confirmed and accepted as of the date first
above written.
Citicorp Capital Investors, Limited
By: /s/ XXXXXXX X. XXXXXXXX, XX.
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: Managing Director
Exhibit A
$15,000,000
CHIPPAC INTERNATIONAL COMPANY LIMITED
12-3/4% SENIOR SUBORDINATED NOTES DUE 2009
REGISTRATION RIGHTS AGREEMENT
June __, 2001
Citicorp Capital Investors, Limited
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
ChipPAC International Company Limited, a British Virgin Islands
corporation (the "COMPANY"), proposes to issue and sell to Citicorp Capital
Investors, Limited (the "PURCHASER"), upon the terms set forth in a purchase
agreement, dated as of June 11, 2001 (the "PURCHASE AGREEMENT"), $15,000,000
aggregate principal amount of its 12-3/4% Senior Subordinated Notes due 2009
(the "NOTES"). The Notes will be issued pursuant to an Indenture, dated as of
June 29, 1999 (the "INDENTURE"), among ChipPAC International Limited, ChipPAC
Merger Corp. and Firstar Bank, N.A. as Trustee (the "TRUSTEE"), as amended by
the First Supplemental Indenture, dated as of August 5, 1999, among the Company,
ChipPAC, Inc., a Delaware corporation ("CHIPPAC"), and the Trustee.
As an inducement to the Purchaser to enter into the Purchase Agreement,
the Company agrees with the Purchaser, for the benefit of the holder(s) of the
Notes, from time to time, (including, without limitation, the Purchaser)
(collectively, the "HOLDERS"), as follows:
1. RESALE SHELF REGISTRATION.
(a) The Company shall, at its cost, use its commercially
reasonable efforts to file as promptly as practicable (but in no event
more than 90 days after the Closing Date (as defined in the Purchase
Agreement)) with the Securities and Exchange Commission (the
"COMMISSION") and thereafter shall use commercially reasonable efforts
to cause to be declared effective a registration statement (the "SHELF
REGISTRATION STATEMENT") on an appropriate form under the Securities
Act of 1933, as amended (the "SECURITIES ACT"), within 180 days of the
Closing Date, relating to the offer and sale of the Transfer Restricted
Notes (as defined in Section 8(d) hereof) by the Holders thereof from
time to time in accordance with the methods of distribution set forth
in the Shelf Registration Statement and Rule 415 under the Securities
Act (hereinafter, the "SHELF REGISTRATION"); PROVIDED, HOWEVER, that no
Holder (other than the Purchaser) shall be entitled to have the Notes
held by it covered by such Shelf Registration Statement unless such
Xxxxxx agrees in writing to be bound by all the provisions of this
Agreement applicable to such Holder.
Registration Rights Agreement - Page 2
(b) The Company shall use commercially reasonable efforts to keep
the Shelf Registration Statement continuously effective in order to
permit the prospectus included therein to be lawfully delivered by the
Holders of the relevant Transfer Restricted Notes, for a period of two
(2) years (or for such longer period if extended pursuant to Section
2(h) below or by the last sentence of this Section 1(b)) from the date
of its effectiveness or such shorter period that will terminate when
all the Transfer Restricted Notes covered by the Shelf Registration
Statement (i) have been sold pursuant thereto or (ii) are no longer
Transfer Restricted Notes as defined in Section 8(d) hereof (in any
such case, such period being called the "SHELF REGISTRATION PERIOD").
The Company shall be deemed not to have used its commercially
reasonable efforts to keep the Shelf Registration Statement effective
during the requisite period if it voluntarily takes any action that
would result in Holders of Notes covered thereby not being able to
offer and sell such Transfer Restricted Notes during that period,
unless (i) such action is required by applicable law or (ii) upon the
occurrence of any event contemplated by Section 2(b)(v) below, such
action is taken by the Company in good faith and for valid business
reasons and the Company thereafter complies with the requirements of
Section 2(h) hereof.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and
the related prospectus and any amendment or supplement thereto, as of
the effective date of the Shelf Registration Statement, amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) Each Holder agrees that if such Holder wishes to sell such
Xxxxxx's Transfer Restricted Notes pursuant to a Shelf Registration
Statement and related prospectus, it will do so in accordance with this
Section 1(d). Each Holder wishing to sell Transfer Restricted Notes
pursuant to a Shelf Registration Statement and related prospectus
agrees to deliver a Notice and Questionnaire (the form of which is
attached as ANNEX A hereto) to the Company. The Company will include in
the Shelf Registration Statement as a selling securityholder each
Holder that delivers such properly completed Notice and Questionnaire
as of or prior to the Closing Date. The Company will use its
commercially reasonable efforts to include in the Shelf Registration
Statement any Holder which fails to provide such properly completed
Notice and Questionnaire as of or prior to the Closing Date but
otherwise provides such properly completed Notice and Questionnaire
prior to the commencement of the Shelf Registration Period. Except as
described above and below, the Company shall have no obligation to
include in the Shelf Registration Statement a Holder which fails to
provide the Company with such properly completed Notice and
Questionnaire as of or prior to the Closing Date. From and after the
date the Shelf Registration Statement is declared effective, the
Company shall, as promptly as is practicable after the date a properly
completed Notice and Questionnaire is delivered, and in any event
within thirty (30) days after such date, (i) if required by law, file
with the Commission a post-effective amendment to the Shelf
Registration Statement or prepare and, if required by applicable law,
file a supplement to the related prospectus or a supplement or
amendment to any document incorporated therein by reference or file
Registration Rights Agreement - Page 3
any other required document so that the Holder delivering such Notice
and Questionnaire is named a selling securityholder in the Shelf
Registration Statement and the related prospectus in such a manner as
to permit such Holder to deliver such prospectus to purchasers of the
Transfer Restricted Notes in accordance with applicable law and, if the
Company shall file a post-effective amendment to the Shelf Registration
Statement, use all commercially reasonable efforts to cause such
post-effective amendment to be declared effective under the Securities
Act as promptly as practical, but in any event by the date that is
thirty (30) business days after the date such post-effective amendment
is required by this clause to be filed; (ii) provide such Holder copies
of any documents filed pursuant to Section 1(d)(i); and (iii) notify
such Holder as promptly as practicable after the effectiveness under
the Securities Act of any post-effective amendment filed pursuant to
Section 1(d)(i); PROVIDED, THAT if such Notice and Questionnaire is
delivered during a period in which the use of such prospectus is
suspended pursuant to Section 2(h) hereof, the Company shall so inform
the Holder delivering such Notice and Questionnaire and shall take the
actions set forth in clauses (i), (ii) and (iii) above upon expiration
of such suspension period. Notwithstanding anything contained herein to
the contrary, the Company shall be under no obligation to name any
Holder that has not supplied the requisite information as required by
and in accordance with the procedures and time periods set forth in
this Section 1(d) as a selling securityholder in any Shelf Registration
Statement and related prospectus and any amendment or supplement
thereto.
2. SHELF REGISTRATION PROCEDURES. In connection with any Shelf
Registration contemplated by Section 1 hereof, the following provisions shall
apply:
(a) The Company shall (i) furnish to the Purchaser, prior to the
filing thereof with the Commission, a copy of the Shelf Registration
Statement and each amendment thereof and each supplement, if any, to
the prospectus included therein and, the Company shall use its best
efforts to reflect in each such document, when so filed with the
Commission, such comments as the Purchaser reasonably may propose and
(ii) include the names of the Holders, who propose to sell Transfer
Restricted Notes pursuant to the Shelf Registration Statement, as
selling securityholders; PROVIDED, THAT the Purchaser and Holders have
complied with Section 1(d).
(b) The Company shall give written notice to the Purchaser and
the Holders of the Transfer Restricted Notes included within the
coverage of the Shelf Registration Statement (which notice pursuant to
clauses (ii)-(v) hereof shall be accompanied by an instruction to
suspend the use of the prospectus until the requisite changes have been
made):
(i) when the Shelf Registration Statement or any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto
has become effective;
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the prospectus
included therein or for additional information;
Registration Rights Agreement - Page 4
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement
or the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of
any notification with respect to the suspension of the
qualification of the Transfer Restricted Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding
for such purpose; and
(v) of the happening of any event that requires the Company
to make changes in the Shelf Registration Statement or the
prospectus in order that the Shelf Registration Statement or the
prospectus do not contain an untrue statement of a material fact
nor omit to state a material fact required to be stated therein
or necessary to make the statements therein (in the case of the
prospectus, in light of the circumstances under which they were
made) not misleading, which written notice need not provide any
detail as to the nature of such event.
(c) The Company shall make every commercially reasonable effort
to obtain the withdrawal at the earliest possible time, of any order
suspending the effectiveness of the Shelf Registration Statement.
(d) The Company shall furnish to each Holder of Notes included
within the coverage of the Shelf Registration, without charge, at least
one copy of the Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and,
if the Holder so requests in writing, all exhibits thereto (including
those, if any, incorporated by reference).
(e) The Company shall, during the Shelf Registration Period,
deliver to each Holder of Transfer Restricted Notes included within the
coverage of such Shelf Registration, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in the
Shelf Registration Statement and any amendment or supplement thereto as
such person may reasonably request. The Company consents, subject to
the provisions of this Agreement, to the use of the prospectus or any
amendment or supplement thereto by each of the selling Holders of the
Transfer Restricted Notes in connection with the offering and sale of
the Transfer Restricted Notes covered by the prospectus, or any
amendment or supplement thereto, included in the Shelf Registration
Statement.
(f) Prior to any public offering of the Notes pursuant to the
Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Holders of the Notes included therein and their
respective counsel in connection with the registration or qualification
of the Transfer Restricted Notes for offer and sale under the
securities or "blue sky" laws of such states of the United States as
any Holder of the Notes reasonably requests in writing and do any and
all other acts or things necessary or advisable to enable the offer and
sale in such jurisdictions of the Notes covered by such Shelf
Registration Statement; PROVIDED, HOWEVER, that the Company shall not
be required to (i) qualify generally to do business in any jurisdiction
where it is not then so qualified or (ii)
Registration Rights Agreement - Page 5
take any action which would subject it to general service of process
or to taxation in any jurisdiction where it is not then so subject.
(g) The Company shall cooperate with the Holders of the Notes to
facilitate the timely preparation and delivery of certificates
representing the Notes to be sold pursuant to the Shelf Registration
Statement free of any restrictive legends and in such denominations and
registered in such names as the Holders may request a reasonable period
of time prior to sales of the Notes pursuant to such Shelf Registration
Statement.
(h) Upon the occurrence of any event contemplated by paragraphs
(ii) through (v) of Section 2(b) above during the period for which the
Company is required to maintain an effective Shelf Registration
Statement, the Company shall as required hereby prepare and file a
post-effective amendment to such Shelf Registration Statement or a
supplement to the related prospectus and any other required document so
that, as thereafter delivered to Holders of the Notes or purchasers of
Notes included within the coverage of such Shelf Registration
Statement, the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company may delay filing and distributing any such
supplement or amendment (and continue the suspension of the use of the
related prospectus) if the Company determines in good faith that such
supplement or amendment would, in the reasonable judgement of the
Company, (i) interfere with or affect the negotiation or completion of
a transaction that is being contemplated by the Company or (ii) involve
initial or continuing disclosure obligations that are not in the best
interests of the Company's stockholders at such time; provided,
further, that neither such delay nor such suspension shall extend for a
period of more than 90 consecutive days or an aggregate of 180 days in
any twelve-month period. If the Company notifies the Purchaser and the
Holders of the Notes in accordance with paragraphs (ii) through (v) of
Section 2(b) above to suspend the use of such prospectus until the
requisite changes to such prospectus have been made, then the Purchaser
and the Holders of the Notes shall suspend use of such prospectus, and
the period of effectiveness of such Shelf Registration Statement
provided for in Section 1(b) above shall be extended by the number of
days from and including the date of the giving of such notice to and
including the date when the Purchaser and the Holders of the Notes
shall have received such amended or supplemented prospectus pursuant to
this Section 2(h).
(i) Not later than the effective date of the Shelf Registration
Statement, the Company will provide CUSIP numbers for the Notes
registered under the Shelf Registration Statement and provide the
Trustee with a certificate for the Notes, in a form eligible for
deposit with The Depository Trust Company.
(j) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the
Shelf Registration to enable the Holders to resell their securities in
accordance with this Agreement.
(k) The Company shall cause the Indenture to be qualified under
the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE
ACT"), in a timely manner and
Registration Rights Agreement - Page 6
containing such changes, if any, as shall be necessary for such
qualification. In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall
appoint a new trustee thereunder pursuant to the applicable provisions
of the Indenture.
(l) Each Holder agrees, by acquisition of the Notes, that no
Holder of Notes shall be entitled to sell any of such Notes pursuant to
any Shelf Registration Statement or to receive a prospectus relating
thereto, unless such Holder has furnished the Company with a Notice and
Questionnaire as required pursuant to and in accordance with Section
1(d) hereof and the information set forth in the next sentence. Each
Holder agrees promptly to furnish the Company all information required
to be disclosed in order to make the information previously furnished
to the Company by such Holder not misleading and any other information
regarding such Holder and the distribution of such Notes as the Company
may from time to time reasonably request.
(m) In the event of any underwritten public offering, the Company
shall enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other
action, if any, as any managing underwriter of such offering and Holder
of the Notes shall reasonably request in order to facilitate the
disposition of the Notes pursuant to any Shelf Registration; PROVIDED,
HOWEVER, that the Company shall not be required to facilitate an
underwritten offering pursuant to a Shelf Registration Statement by any
Holders unless the offering relates to at least $10,000,000 principal
amount of the Notes.
(n) The Company shall (i) make reasonably available for
inspection by any underwriter participating in any disposition pursuant
to the Shelf Registration Statement and any agent retained by any such
underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and (ii) cause the
Company's officers, directors, employees, accountants and auditors to
supply all relevant information reasonably requested by any such
underwriter or agent in connection with the Shelf Xxxxxxxxxxxx
Statement, in each case, as shall be reasonably necessary to enable
such persons, to conduct a reasonable investigation within the meaning
of Section 11 of the Securities Act; PROVIDED, HOWEVER, that the
foregoing inspection and information gathering shall be coordinated on
behalf of the Purchaser by you and the other parties, by one firm of
counsel, which firm shall be designated as described in Section 6
hereof.
(o) In the event of an underwritten offering, the Company shall
cause (i) its counsel to deliver an opinion and updates thereof
relating to the Notes in customary form and substance addressed to the
managing underwriters thereof and dated, in the case of the initial
opinion, the effective date of such Shelf Registration Statement; (ii)
its executive officers and directors to execute and deliver all
customary documents and certificates and updates thereof requested by
any underwriters of the applicable Notes and (iii) the independent
public accountants for which financial information is provided in the
Shelf Registration Statement to provide to the selling Holders of the
applicable Transfer Restricted Notes and any underwriter therefor a
comfort letter in customary form, type and substance customarily
covered in comfort letters in connection with primary underwritten
offerings.
Registration Rights Agreement - Page 7
(p) The Company shall use its commercially reasonable efforts to
take all other steps necessary to effect the registration of the Notes
covered by a Shelf Registration Statement contemplated hereby.
3. DEMAND REGISTRATION.
(a) From and after the second anniversary of the Closing Date,
Holders of at least 50% of the outstanding Transfer Restricted Notes,
subject to Section 3(e) below, (the "INITIATING HOLDERS") may request,
in writing, registration under the Securities Act of all or part of
their Transfer Restricted Notes. Within 10 days after receipt of any
such request, the Company will give notice of such request to all other
Holders of Transfer Restricted Notes ("OTHER HOLDERS"). Thereafter, the
Company will use all commercially reasonable efforts to effect the
registration on an appropriate form under the Securities Act and will
include in such registration, subject to Section 3(e) below, all
Transfer Restricted Notes held by the Initiating Holders and Other
Holders with respect to which the Company has received written requests
for inclusion therein within 15 days after the receipt of the Company's
notice. All registrations initiated by an Initiating Holder pursuant to
this Section 3(a) are referred to herein as "DEMAND REGISTRATIONS."
Notwithstanding anything herein to the contrary, the Company need not
effect any requested Demand Registration unless the expected gross
proceeds of such registration exceed $10,000,000.
(b) Notwithstanding anything in Section 3(a) above to the
contrary, the Company shall not be obligated to take any action to
effect any such registration pursuant to Section 3(a) above:
(i) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of
process in effecting such registration, unless the Company is
already subject to service in such jurisdiction and except as may
be required by the Securities Act;
(ii) During the period starting with the date sixty (60)
days prior to the Company's estimated date of filing of, and
ending on one hundred twenty (120) days immediately following the
effective date of, any registration statement pertaining to
securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided that the Company is actively
employing in good faith all reasonable effects to cause such
registration statement to become effective;
(iii) After the Company has effected one (1) such
registration pursuant to Section 3(a), and such registrations
have been declared or ordered effective;
(iv) If the Company shall furnish to such Holders a
certificate signed by the Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors
it would be seriously detrimental to the Company or its
stockholders for a registration statement to be filed in the near
future, then the Company's obligation to use its commercially
reasonable efforts
Registration Rights Agreement - Page 8
to comply under Section 3(a) shall be deferred for a period not
to exceed one hundred eighty (180) days from the date of receipt
of written request from an Initiating Holder; provided that the
Company may not exercise this deferral right more than once per
twelve (12) month period.
(c) A registration requested pursuant to Section 3(a) shall not
be deemed to have been effected (i) unless a registration statement
with respect thereto has been declared effective by the Commission,
(ii) if after it has become effective, such registration is interfered
with by any stop order, injunction or the order or requirement of the
Commission or other governmental agency or court for any reason, and,
as a result thereof, the Transfer Restricted Notes covered thereby have
not been sold or (iii) the registration statement does not remain
effective for a period expiring the earlier of 90 days after the
effective date thereof or the completion of the distribution of the
Transfer Restricted Notes included in such registration statement. The
Holders of the Transfer Restricted Notes shall be permitted to withdraw
all or any part of the Transfer Restricted Notes from a Demand
Registration at any time prior to the effective date of such Demand
Registration; provided that in the event of, and concurrently with such
withdrawal, the Holders responsible for such Demand Registration shall
either (i) pay or reimburse the Company for all fees and expenses
(including counsel fees and expense) incurred by them and the Company
prior to such withdrawal or (ii) agree to forfeit its Demand
Registration rights hereunder.
(d) In the event that a registration pursuant to Section 3(a) is
for a registered public offering involving an underwriting, the Company
shall so advise the Holders as part of the notice given pursuant to
Section 3(a). In such event, the right of any Holder to registration
pursuant to Section 3(a) shall be conditioned upon such Xxxxxx's
participation in the underwriting arrangements required by this Section
3, and the inclusion of such Holder's Transfer Restricted Notes in the
underwriting to the extent requested shall be limited to the extent
provided herein. The Company shall (together with all Holders proposing
to distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the Initiating Holder, but subject to
the Company's reasonable approval.
(e) If the Company includes in any underwritten Demand
Registration any securities which are not Transfer Restricted Notes and
the managing underwriters advise the Company in writing that in their
opinion the number of Transfer Restricted Notes proposed to be included
exceeds the number of Transfer Restricted Notes and other securities
which can be sold in such offering, the Company will include in such
registration (i) first, the Transfer Restricted Notes requested to be
included which, in the opinion of such underwriters, can be sold, by
the Initiating Holders initiating the Demand Registration, (ii) second,
the Transfer Restricted Notes proposed to be included in such
registration by the Other Holders exercising their registration rights
hereunder, pro rata based upon the total number of Transfer Restricted
Notes which such Other Holders propose to include in such registration
and (iii) third, the securities proposed to be included in such
registration by any other holders as determined by the Company and the
managing underwriters.
Registration Rights Agreement - Page 9
4. PIGGYBACK REGISTRATION.
(a) From and after the second anniversary of the Closing Date,
whenever the Company proposes to register any securities substantially
similar to the Transfer Restricted Notes under the Securities Act
(other than on S-8 or any successor forms), and the form of
registration statement to be used may be used for the registration of
Transfer Restricted Notes (a "PIGGYBACK REGISTRATION"), the Company
will give notice to all Holders of Transfer Restricted Notes of the
intention to effect such a registration and will include in such
registration, subject to Sections 4(c) and 4(d) below, all Transfer
Restricted Notes with respect to which the Company has received written
requests for inclusion therein. Such requests for inclusion shall be in
writing and delivered to the Company within 15 days after the Holders'
receipt of such notice and shall specify the number of Transfer
Restricted Notes intended to be disposed of and the intended method of
distribution thereof. Any Holder of Transfer Restricted Notes shall
have the right to withdraw its request for inclusion of its Transfer
Restricted Notes in any registration statement pursuant to this Section
4(a) by giving written notice to the Company of its request to
withdraw. The Company may withdraw a Piggyback Registration at any time
prior to the time it becomes effective.
(b) If the registration of which the Company gives notice is for
a registered public offering involving an underwriting, the Company
shall so advise the Holders as a part of the written notice given
pursuant to Section 4(a). In such event the right of any Holder to
registration pursuant to Section 4(a) shall be conditioned upon such
Xxxxxx's participation in such underwriting and the inclusion of
Transfer Restricted Notes in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company and the other
holders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the managing
underwriter selected for such underwriting by the Company.
(c) If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters
advise the Company that in their opinion the number of securities
requested to be included in such registration exceeds the number which
can be sold in such offering, the Company will include in such
registration (i) first, the securities the Company proposes to sell,
(ii) second, the securities proposed to be included in such
registration by the holders (including Holders of Transfer Restricted
Notes) of the same securities proposed to be sold by the Company and
(iii) third, the securities proposed to be included in such
registration by the holders (including Holders of Transfer Restricted
Notes) of substantially the same securities proposed to be sold by the
Company, in each of clauses (ii) and (iii) pro rata among such holders
exercising their respective piggyback registration rights thereof based
upon the total number of securities which such holders beneficially
own.
(d) If a Piggyback Registration is an underwritten secondary
registration on behalf of holders (other than the Holders of the
Transfer Restricted Notes) of the Company's securities, and the
managing underwriters advise the Company that in their opinion the
number of securities requested to be included in such registration
exceeds the
Registration Rights Agreement - Page 10
number which can be sold in such offering, the Company will
include in such registration (i) FIRST, the securities which such
initiating holders propose to sell; (ii) SECOND, the securities
the Company proposed to be included in such registration; (iii)
THIRD, the securities proposed to be included in such
registration by the holders (including Holders of Transfer
Restricted Notes) of the same securities proposed to be sold by
such initiating holders and (iv) FOURTH, the securities proposed
to be included in such registration by the holders (including
Holders of Transfer Restricted Notes) of substantially the same
securities proposed to be sold by such initiating holders, in
each of clauses (iii) and (iv) pro rata among any such holders
exercising their respective piggyback registration rights thereof
based upon the total number of securities which such holders
beneficially own.
5. DEMAND AND PIGGYBACK REGISTRATION PROCEDURES. In the case of each
registration effected by the Company pursuant to Sections 3 and 4, the Company
will keep each Holder advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense the Company will:
(a) With respect to Demand Registrations, the Company shall use
its commercially reasonable efforts to file as promptly as practicable
(but in no event more than 120 days after the date the Company is in
receipt of written requests by the Other Holders for inclusion in such
Demand Registration (the "DEMAND INITIATION DATE") and thereafter
shall use commercially reasonable efforts to cause to be declared
effective a registration statement on an appropriate form under the
Securities Act, within 180 days after the Demand Initiation Date,
relating to the offer and sale of the Transfer Restricted Notes;
(b) Furnish to the Holders participating in such registration and
to the underwriters of the securities being registered such reasonable
number of copies of the Registration Statement, preliminary prospectus,
final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities;
(c) Prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in
connection with such registration statements as may be necessary to
comply with the provisions of the Securities Act with respect to the
disposition of all Transfer Restricted Notes covered by such
registration statement;
(d) Use its commercially reasonable efforts to register and
qualify the securities covered by such registration statement under
such other securities or "blue sky" laws of such jurisdictions as shall
be reasonably requested by the Holders, provided that the Company shall
not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of
process in any such states or jurisdictions; and
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual
and customary form, with the
Registration Rights Agreement - Page 11
managing underwriter of such offering. Each Holder participating in
such underwriting shall also enter into and perform its obligations
under such an agreement.
6. REGISTRATION EXPENSES. Except as set forth in clause (i) of
Section 3(c), the Company shall bear all fees and expenses incurred by it in
connection with the performance of its obligations under Sections 1, 3 and 4
hereof whether or not a Registration Statement is filed or becomes effective. In
connection with any Registration Statement, the participating Holders shall be
responsible for the payment of any and all underwriters' and brokers' and
dealers' discounts, selling commissions, any applicable stock transfer taxes
and, except as set forth in clause (i) of Section 3(c) and as set forth below,
all fees and disbursements of counsel, accountants or other advisors for any
Holder and any other fees and expenses not covered by the preceding sentence. In
connection with the Shelf Registration Statement and the applicable Registration
Statement for one (1) Demand Registration, the Company shall bear or reimburse
the Holders of the Notes covered thereby for reasonable fees and disbursements
of not more than one (1) counsel chosen by the Holders of a majority in
principal amount of the Notes covered thereby to act as counsel for the Holders
in connection therewith. For purposes of this Agreement, "REGISTRATION
STATEMENT" shall mean the Shelf Registration Statement and any applicable
registration statement in connection with Demand and Piggyback Registrations.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Holder
of the Notes, each agent representative, employee, officer and director
of any such Holder, and each person, if any, who controls such Holder
within the meaning of the Securities Act or the Exchange Act (each
Holder and such persons are referred to collectively as the
"INDEMNIFIED PARTIES") from and against any losses, claims, damages or
liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages,
liabilities or actions relating to purchases and sales of the Notes) to
which each Indemnified Party may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in a Registration Statement or prospectus or in any amendment
or supplement thereto or in any preliminary prospectus relating to a
Registration Statement, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse, as incurred, the Indemnified Parties
for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability or action in respect thereof; PROVIDED, HOWEVER, that
(i) the Company shall not be liable in any such case to the extent that
such loss, claim, damage or liability arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged
omission made in a Registration Statement or prospectus or in any
amendment or supplement thereto or in any preliminary prospectus
relating to a Registration Statement in reliance upon and in conformity
with written information pertaining to such Holder and furnished to the
Company by or on behalf of such Holder specifically for inclusion
therein and (ii) with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus
relating to a Registration Statement, the indemnity agreement contained
in this subsection (a) shall not
Registration Rights Agreement - Page 12
inure to the benefit of any Holder from whom the person asserting any
such losses, claims, damages or liabilities purchased the Notes
concerned, to the extent that a prospectus relating to such Notes was
required to be delivered by such Holder under the Securities Act in
connection with such purchase and any such loss, claim, damage or
liability of such Holder results from the fact that there was not sent
or given to such person, at or prior to the written confirmation of the
sale of such Notes to such person, a copy of the final prospectus if
the Company had previously furnished copies thereof to such Holder;
PROVIDED FURTHER, HOWEVER, that this indemnity agreement will be in
addition to any liability which the Company may otherwise have to such
Indemnified Party. The Company shall also indemnify underwriters, their
officers and directors and each person who controls such underwriters
within the meaning of the Securities Act or the Exchange Act to the
same extent as provided above with respect to the indemnification of
the Holders of the Notes if requested by such Holders.
(b) Each Holder, severally and not jointly, will indemnify and
hold harmless the Company, its officers, directors and each person, if
any, who controls the Company within the meaning of the Securities Act
or the Exchange Act from and against any losses, claims, damages or
liabilities or any actions in respect thereof, to which the Company or
any such controlling person may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in a Registration Statement or prospectus or in any amendment
or supplement thereto or in any preliminary prospectus relating to a
Registration Statement, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary to make
the statements therein not misleading, but in each case only to the
extent that the untrue statement or omission or alleged untrue
statement or omission was made in reliance upon and in conformity with
written information pertaining to such Holder and furnished to the
Company by or on behalf of such Holder specifically for inclusion
therein; and, subject to the limitation set forth immediately preceding
this clause, shall reimburse, as incurred, the Company for any legal or
other expenses reasonably incurred by the Company or any such
controlling person in connection with investigating or defending any
loss, claim, damage, liability or action in respect thereof. This
indemnity agreement will be in addition to any liability which such
Holder may otherwise have to the Company or any of its controlling
persons.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action or proceeding
(including a governmental investigation), such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Section 7, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying
party will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party,
Registration Rights Agreement - Page 13
be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof the indemnifying party will not be liable to
such indemnified party under this Section 7 for any legal or other
expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense
thereof. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by
such indemnified party unless such settlement includes an unconditional
release of such indemnified party from all liability on any claims that
are the subject matter of such action, and does not include a statement
as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party. No indemnified party shall effect
any settlement of any pending or threatened action without the prior
written consent of the indemnifying party, which such consent shall not
be unreasonably withheld or delayed.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to in subsection (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative benefits received
by the indemnifying party or parties on the one hand and the
indemnified party on the other from the sale of the Notes, pursuant to
the Registration Statement, or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party
on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable
considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company
on the one hand or such Holder or such other indemnified party, as the
case may be, on the other, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any action or claim which
is the subject of this subsection (d). Notwithstanding any other
provision of this Section 7(d), the Holders shall not be required to
contribute any amount in excess of the amount by which the net proceeds
received by such Holders from the sale of the Notes pursuant to a
Registration Statement exceeds the amount of damages which such Holders
have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each person, if any, who controls such
indemnified party within the
Registration Rights Agreement - Page 14
meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such indemnified party and each person, if
any, who controls the Company within the meaning of the Securities Act
or the Exchange Act shall have the same rights to contribution as the
Company.
(e) The agreements contained in this Section 7 shall survive the
sale of the Notes pursuant to a Registration Statement and shall remain
in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any
indemnified party.
8. ADDITIONAL INTEREST UNDER CERTAIN CIRCUMSTANCES.
(a) Additional interest (the "ADDITIONAL INTEREST") with respect
to the Notes (except with respect to (iii) below, which such Additional
Interest shall only apply to the Notes held by the affected Holder(s))
shall be assessed as follows if any of the following events occur (each
such event in clauses (i) through (v) below being herein called a
"REGISTRATION DEFAULT"):
(i) If on or prior to the 90th day after the Closing Date
(as defined in the Purchase Agreement), the Shelf Registration
Statement has not been filed with the Commission;
(ii) If on or prior to the 180th day after the Closing Date
(as defined in the Purchase Agreement), the Shelf Registration
Statement has not been declared effective by the Commission;
(iii) The Company fails with respect to a Holder of Notes
that supplies the Notice and Questionnaire described in Section
1(d) above to amend or supplement the Shelf Registration
Statement in the manner set forth in Section 1(d) above;
(iv) If after the Shelf Registration Statement is declared
effective, such Shelf Registration Statement or the related
prospectus ceases to be usable in connection with resales of
Transfer Restricted Notes during the periods specified herein
because the Company suspends the effectiveness of such Shelf
Registration Statement beyond the periods set forth in Section
2(h) above;
(v) If after the Shelf Registration Statement is declared
effective, such Registration Statement or the related prospectus
ceases to be usable in connection with resales of Transfer
Restricted Notes during the periods specified herein and the
Company fails to cure the Shelf Registration Statement within
fifteen (15) business days by filing a post-effective amendment
or report pursuant to the Exchange Act;
(vi) If on or prior to the 120th day after the Demand
Initiation Date, a registration statement relating to the
applicable Demand Registration has not been filed with the
Commission; or
Registration Rights Agreement - Page 15
(vii) If on or prior to the 180th day after the Demand
Initiation Date, a registration statement relating to the
applicable Demand Registration has not been declared effective by
the Commission.
Each of the foregoing will constitute a Registration Default whatever the reason
for any such event and whether it is voluntary or involuntary or is beyond the
control of the Company or pursuant to operation of law or as a result of any
action or inaction by the Commission.
Additional Interest shall accrue on the Notes that are Transfer
Restricted Notes over and above the interest set forth in the title of the Notes
from and including the date on which any such Registration Default shall occur
to but excluding the date on which all such Registration Defaults have been
cured, at a rate of 0.50% per annum (the "ADDITIONAL INTEREST RATE").
(b) A Registration Default referred to in Section 8(a)(v) hereof
shall be deemed not to have occurred and be continuing in relation to a
Shelf Registration Statement or the related prospectus if (i) such
Registration Default has occurred solely as a result of (x) the filing
of a post-effective amendment to such Shelf Registration Statement to
incorporate annual audited financial information with respect to the
Company where such post-effective amendment is not yet effective and
needs to be declared effective to permit Holders to use the related
prospectus or (y) other material events with respect to the Company
that would need to be described in such Shelf Registration Statement or
the related prospectus and (ii) in the case of clause (y), the Company
is proceeding promptly and in good faith to amend or supplement such
Shelf Registration Statement and related prospectus to describe such
events; PROVIDED, HOWEVER, that in any case if such Registration
Default occurs for a continuous period in excess of 30 days, Additional
Interest shall be payable in accordance with the above paragraph from
the day such Registration Default occurs until such Registration
Default is cured.
(c) Any amounts of Additional Interest due pursuant to Section
8(a) above will be payable in cash to the "RECORD HOLDER" (as defined
in Section 8(d) below) on the "DAMAGES PAYMENT DATES" (as defined in
Section 8(d) below) with respect to the Notes. The amount of Additional
Interest will be determined by (1) multiplying the applicable
Additional Interest Rate by the "APPLICABLE PRINCIPAL AMOUNT" (as
defined in Section 8(d) below) and then (2) multiplying the product of
the calculation set forth in (c)(1) above by a fraction, the numerator
of which is the number of days such Additional Interest Rate was
applied during such period (determined on the basis of a 360 day year
comprised of twelve 30-day months), and the denominator of which is
360.
(d) The following terms shall have the following meaning(s):
The term "APPLICABLE PRINCIPAL AMOUNT" with respect to each
$1,000 principal amount of maturity of Notes means the initial issue price of
such Note ($1,000) through the next succeeding February 1 or August 1 following
such Registration Default in the case of such payment of Additional Interest
with respect to a Registration Default (and thereafter at the next
Registration Rights Agreement - Page 16
succeeding February 1 or August 1 until the cure of such Registration Default)
or, if no Notes are then outstanding, such sum calculated as if such Notes were
then outstanding.
The term "DAMAGES PAYMENT DATE" means each February 1 or August 1
in the case of the Notes.
The term "RECORD HOLDER" means with respect to any Damages
Payment Date relating to any Note as to which any Additional Interest has
accrued, the registered holder of such Note, fifteen (15) days prior to the next
succeeding Damages Payment Date.
The term "TRANSFER RESTRICTED NOTES" means each Note until the
earliest of (i) the date on which such Note has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement, (ii) to the extent such Note is held by a non-affiliate
of the Company or ChipPAC, the date on which such Note may be sold by the Holder
thereof to the public pursuant to Rule 144 under the Securities Act, (iii) to
the extent such Note is held by an affiliate of the Company or ChipPAC, the date
on which such Note is sold by the Holder thereof to the public pursuant to Rule
144 under the Securities Act or (iv) the date on which such Note is saleable by
the Holder thereof pursuant to Rule 144(k) under the Securities Act.
Notwithstanding anything herein to the contrary, the registration rights granted
hereunder shall terminate as to each Holder and with respect to such Notes upon
the date that such Notes are no longer Transfer Restricted Notes.
9. SEC FILINGS. The Company shall use its best efforts to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder of Notes, make publicly
available other information so long as necessary to permit sales of their
securities pursuant to Rule 144. The Company covenants that it will take such
further action as any Holder of Notes may reasonably request, all to the extent
required from time to time to enable such Holder to sell Notes without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144. The Company will provide an executed counterpart of this
Agreement to prospective purchasers of the Notes identified to the Company by
the Purchaser upon request. Upon the request of any Holder of Notes, the Company
shall deliver to such Holder a written statement as to whether it has complied
with such requirements. Notwithstanding the foregoing, nothing in this Section 9
shall be deemed to require the Company to register any of its securities
pursuant to the Exchange Act.
10. UNDERWRITTEN REGISTRATIONS. If any of the Transfer Restricted
Notes covered by any Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering ("MANAGING UNDERWRITERS") will be selected by
the Holders of a majority in aggregate principal amount of such Transfer
Restricted Notes to be included in such offering and such selection shall be
subject to the Company's consent, which shall not be unreasonably withheld or
delayed.
No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Transfer
Restricted Notes on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities,
Registration Rights Agreement - Page 17
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
11. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company will not on or after
the date of this Agreement enter into any agreement with respect to its
securities that is inconsistent or conflicts with the legal rights
granted to the Holders in this Agreement. The rights granted to the
Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's
securities under any agreement in effect on the date hereof.
Notwithstanding anything herein to the contrary, the Company shall not
be limited or in any way prevented from entering into any agreement
granting any holder or prospective holder of any securities of the
Company registration rights with respect to such securities that do not
conflict with the registration rights of the Holders hereunder.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified
or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the
written consent of the Holders of a majority of the then outstanding
Notes constituting Transfer Restricted Notes. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof
with respect to a matter that relates exclusively to the rights of
Holders of Transfer Restricted Notes whose securities are being sold
pursuant to a Shelf Registration Statement and that does not directly
or indirectly affect the rights of other Holders of Transfer Restricted
Notes may be given by Holders of at least a majority of the Transfer
Restricted Notes being sold by such Holders pursuant to such Shelf
Registration Statement; PROVIDED, HOWEVER, that the provisions of this
sentence may not be amended, modified or supplemented except in
accordance with the provisions of the immediately preceding sentence;
PROVIDED, FURTHER, without the consent of each Holder, no amendment,
modification or supplement may alter the provisions relating to the
payment of Additional Interest. Each Holder of Transfer Restricted
Notes outstanding at the time of any such amendment, modification,
supplement, waiver or consent or thereafter shall be bound by any such
amendment, modification, supplement, waiver or consent effected
pursuant to this Section 11, whether or not any notice, writing or
marking indicating such amendment, modification, supplement, waiver or
consent appears on the Transfer Restricted Notes or is delivered to
such Holder. Each Holder may waive compliance with respect to any
obligation of the Company under this Agreement as it may apply or be
enforced by such particular Holder.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery,
first-class mail, facsimile transmission, or air courier which
guarantees overnight delivery:
(1) if to a Holder of the Notes, at the most current address
given by such Holder to the Company.
(2) if to the Purchaser:
Registration Rights Agreement - Page 18
Citicorp Capital Investors, Limited
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxx
Xxxxxxx Xxxxxxxx
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxx, Esq.
Zechariah Xxxxxxx Xxxxxxx XX, Esq.
(3) if to the Company, at its address as follows:
ChipPAC, Inc.
00000 Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile No. (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile No. (000) 000-0000
Attention: Xxx Xxxxx, Esq.
(for all notices other than Selling Security
Holder Notice and Questionnaire)
Xxxxxxx Xxx, Esq.
Xxxx Xxxx, Esq.
(for all Selling Securityholder Notice
and Questionnaire)
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; three
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged by recipient's facsimile machine operator, if sent
by facsimile transmission; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.
(d) THIRD PARTY BENEFICIARIES. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on
the one hand, and the
Registration Rights Agreement - Page 19
Purchaser, on the other hand, and shall have the right to enforce such
agreements directly to the extent they may deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of
the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; PROVIDED, HOWEVER, that this
Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Notes from such Holder; and
PROVIDED, FURTHER that nothing herein shall be deemed to permit any
assignment, transfer or any disposition of Transfer Restricted Notes in
violation of the terms of the Purchase Agreement. If any transferee of
any Holder shall acquire Transfer Restricted Notes, in any manner,
whether by operation of law or otherwise, such Transfer Restricted
Notes shall be held subject to all of the terms of this Agreement and
by taking and holding such Transfer Restricted Notes such person shall
be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement and such Person shall be
entitled to receive the benefits hereof.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the 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.
(g) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
(i) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(j) NOTES HELD BY THE COMPANY. Whenever the consent or approval
of Holders of a specified percentage of principal amount of Notes is
required hereunder, Notes held by the Company or its affiliates (other
than the Purchaser and subsequent Holders of Notes if such subsequent
Holders are deemed to be affiliates solely by reason of their holdings
of such Notes) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
[Remainder of Page Intentionally Left Blank]
[Signature Page Follows]
Signature Page to Registration Rights Agreement
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Purchaser and the Company in accordance with its terms.
Very truly yours,
CHIPPAC INTERNATIONAL COMPANY LIMITED
By:______________________________________
Name:
Title:
The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.
CITICORP CAPITAL INVESTORS, LIMITED
By:_________________________________
Name:
Title:
ANNEX A
CHIPPAC INTERNATIONAL COMPANY LIMITED
QUESTIONNAIRE FOR BENEFICIAL OWNERS REGARDING
SECURITIES TO BE INCLUDED IN SHELF REGISTRATION STATEMENT
The following questions (the "QUESTIONNAIRE") elicit information to
prepare (i) the Registration Statement on Form S-3 (the "SHELF REGISTRATION
STATEMENT") registering for resale the Company's 12-3/4% Senior Subordinated
Notes due 2009 (the "NOTES"), on behalf of the beneficial owners thereof, filed
by ChipPAC International Company Limited (the "COMPANY") with the Securities
Exchange Commission in accordance with the rights granted to you and the other
holders of Notes (the "SELLING SECURITYHOLDERS") pursuant to the Registration
Rights Agreement, dated June 22, 2001, by and between the Company and the
purchaser party thereto (the "REGISTRATION RIGHTS AGREEMENT") and (ii) other
securities documents which may be required in connection with the Shelf
Registration Statement. By electing to sell the Securities pursuant to the Shelf
Registration Statement you agree to be bound by the terms of the Registration
Rights Agreement.
Because the information provided in this Questionnaire will be used in
connection with the preparation of documents to be filed with state and federal
agencies, it should be accurate, complete and true, and not omit any material or
important information.
By execution of this Questionnaire, you agree to notify the Company's
legal counsel as promptly as practicable of any inaccuracy or change in
information previously furnished by you to the Company or the occurrence of any
event in either case as a result of which any Prospectus included in such Shelf
Registration Statement contains or would contain an untrue statement of a
material fact regarding you or your intended method of distribution of such
Securities necessary to make the statements therein, in light of the
circumstances then existing, not misleading, and you agree promptly to furnish
to the Company's legal counsel any additional information required to correct
and update any previously furnished information or required so that such
Prospectus shall not contain, with respect to you or the distribution of
Securities held by you that are included in the Shelf Registration Statement, an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances then existing, not
misleading.
Each beneficial owner of the Notes is being furnished with two copies
of this Questionnaire. Please complete and execute one copy and return it to the
Company's legal counsel, Xxxxxxxx & Xxxxx, 000 Xxxxx Xxxxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxxxxx, XX 00000, Attention: Xxxxxxx Xxx and Xxxx Xxxx, on or before
the date of the initial issuance of the Notes (the "CLOSING DATE"). By executing
this Questionnaire, you hereby consent to being named in the Shelf Registration
Statement and to the presentation of all information furnished herein which is
required to be disclosed in the Shelf Registration Statement.
PURSUANT TO THE TERMS OF THE REGISTRATION RIGHTS AGREEMENT, YOU ARE
OBLIGATED TO INDEMNIFY THE COMPANY IF THE INFORMATION YOU PROVIDE HEREIN IS
INACCURATE OR MISLEADING.
NOTES WILL NOT BE INCLUDED IN THE SHELF REGISTRATION STATEMENT UNLESS
YOU COMPLETE THIS QUESTIONNAIRE, SIGN IT AND DELIVER A COPY TO THE COMPANY'S
LEGAL COUNSEL IN THE MANNER DESCRIBED HEREIN AND PROMPTLY NOTIFY THE COMPANY'S
LEGAL COUNSEL OF ANY CHANGES TO THE INFORMATION CONTAINED HEREIN.
A-1
INSTRUCTIONS FOR COMPLETION OF QUESTIONNAIRE:
Please answer each question fully. Give the most exact and accurate
answers possible. If your response to any of the questions presented below is
negative or if any of the questions are not applicable, please so state in the
space provided. Please sign and date the Questionnaire. Certain terms used
herein are defined in Appendix A hereto, which should be referred to in
completing this Questionnaire.
1. GENERAL
State your full name as it should appear in any filings made.
NAME OF SELLING SECURITYHOLDER: ________________________________________________
SOCIAL SECURITY NUMBER OR FEDERAL EMPLOYER I.D. NUMBER: ________________________
BUSINESS ADDRESS: ______________________________________________________________
RESIDENCE ADDRESS: _____________________________________________________________
TELEPHONE NUMBER: ______________________________________________________________
Business: __________________________________
Fax: _______________________________________
If an entity, please indicate principal contact for questions:
NAME: _____________________________________
ADDRESS: __________________________________
TELEPHONE NUMBER: _________________________
FAX NUMBER: _______________________________
2. Please describe the nature of the business you or your organization
conducts.
3. Please state your current position, office or other relationship with
the Company (or its predecessors or affiliates) and any position,
office or other relationship with the Company (or its predecessors or
affiliates) during the past three years.
4. If you hold any or all of the Notes on behalf of another person or
entity, please state the full name(s) and address(es) of such person(s)
or entity(ies) and the amount(s) so held.
5. Check the box which represents the CUSIP Number of the Notes that you
hold.
|| 144A Global Note; CUSIP Number:
|| _________________________________
A-2
6. Please state the amount of Notes owned of record by you.
Notes: ______________________________
7. Please state the amount of Notes for which you are the beneficial owner
and the record owner.
Notes: ______________________________
8. Please state the amount of Notes for which you are the beneficial
owner, but not the record owner.
Notes: ______________________________
Please include the name and address of the record owner and your relationship to
the record owner.
Notes: ______________________________
9. If any other person or entity shares voting or investment power with
you with respect to the Notes listed in questions 6, 7 and 8 above,
please
a. briefly identify the person or entity,
b. give the principal amount or number subject to shared voting power
or investment power and
c. summarize the arrangement.
10. Are any of the Notes owned by you subject to any pledge or other
contractual arrangement?
No ____Yes ____
If yes, please explain such pledge or other contractual arrangement.
11. Please describe any other rights to purchase Notes that you have.
12. Please state the amount of Notes to be offered for your account in the
Shelf Registration Statement.
Notes: ______________________________
13. Have you entered into any agreement, arrangement or understanding with
a broker or dealer with respect to the offering of the Notes to be
registered in the Shelf Registration Statement?
No ____Yes ____
If yes, please set forth the terms of any such agreement, arrangement
or understanding (including without limitation volume limitations on sales,
parties to the agreement, arrangement or understanding and conditions under
which the agreement, arrangement or understanding may be terminated) below.
14. Identify any broker(s) or dealer(s) participating in the offering of
Notes to be offered for your account and state the amount of Notes to
be offered by each such broker.
15. Set forth below any discounts or commissions, if any, to be allowed or
paid to dealers in connection with the sale of the Notes to be offered
for your account.
A-3
16. Identify any finder known to you to be involved with the distribution
of the Notes to be offered for your account and, if applicable, the
finder's relationship with the Company or its officers, directors,
principal shareholders, finders or promoters.
17. Attached as Appendix B hereto is a description of a plan of
distribution that is intended to be used, in substantially the form of
Appendix B, in the Shelf Registration Statement. Please indicate
whether anything stated in Appendix B is inaccurate or misleading with
respect to your plan to distribute the Notes owned by you or whether
Appendix B omits to state any information about your plan of
distribution.
No ___Yes ____
If yes, describe below specifically in what manner Appendix B is
inaccurate or misleading, Please also describe below any additional information
about your plan to distribute the Notes that you own.
A-4
CERTIFICATION
The information set forth above is supplied by the undersigned in
response to the request of the Company and may be used in connection with the
Shelf Registration Statement. The undersigned hereby affirms that such
information is correct as of the date hereof. The undersigned will promptly
notify the Company's legal counsel of any changes in such information, whether
such change occurred subsequent hereto and prior to the filing or effectiveness
of the Shelf Registration Statement or after the Shelf Registration Statement is
filed or becomes effective. The undersigned understands and agrees that this
Questionnaire, as completed by him or her, and any further communications by him
or her regarding the matters contemplated herein, will be relied upon by the
Company, its legal counsel, and the representatives of any underwriters and
their counsel, in connection with filings related to the Shelf Registration
Statement.
The undersigned understands that material misstatements or the omission
of material facts in the Shelf Registration Statement may give rise to civil and
criminal liabilities for the Company, each officer and director of the Company
signing the Shelf Registration Statement and other persons signing such
document.
Signature of Holder(1) _________________________________________
Please type or print name and title, if any: ___________________
Date: _______________
RETURN COMPLETED QUESTIONNAIRE ON OR BEFORE THE CLOSING DATE TO:
XXXXXXX XXX, ESQ.
XXXX XXXX, ESQ.
XXXXXXXX & XXXXX
000 XXXXX XXXXXXXX XXXXXX
00XX XXXXX
XXX XXXXXXX, XXXXXXXXXX 00000
FAX: (000) 000-0000
-----------
(1) If this Questionnaire is being completed by or on behalf of a person other
than an individual, the entity on whose behalf the Questionnaire is being
completed should be stated.
A-5
APPENDIX A
1. ARRANGEMENT. Any plan, contract, arrangement or understanding,
whether or not set forth in a formal document.
2. ASSOCIATE. The term "associate" means:
(a) Any corporation or organization, except the Company and its
majority-owned subsidiaries, of which you are an executive officer or
partner or of which you, together with other officers or directors of
the Company, are, directly or indirectly, the beneficial owner of 10%
or more of any class of equity securities.
(b) Any trust or other estate in which you have a substantial
beneficial interest or as to which you serve as trustee or in a similar
fiduciary capacity.
(c) Any relative, your spouse or any relative of your spouse who
resides with you or who is a director or officer of the Company or its
subsidiaries.
3. BENEFICIAL OWNER. A "beneficial owner" of securities is any
person who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has or shares:
(a) Voting power, which includes the power to vote, or to direct
the voting of, such security; and/or,
(b) Investment power, which includes the power to dispose or
direct the disposition of, such security.
Furthermore, a "beneficial owner" of a security includes any person who
has the right to acquire beneficial ownership of such security at any time
within sixty (60) days. The right to acquire beneficial ownership could (but
need not necessarily) be through (i) the exercise of any option, warrant or
right, (ii) the conversion of a security, (iii) a power to revoke or automatic
termination of a trust, discretionary account, or similar arrangement, or (iv)
otherwise.
A "beneficial owner" also includes any person who, directly or
indirectly, creates or uses a trust, proxy, power of attorney, pooling
arrangement or any other contract, arrangement or device with the purpose or
effect of divesting such person of beneficial ownership of a security or
preventing the vesting of such beneficial ownership as part of a plan to evade
the reporting requirements of any federal or state securities act.
Securities owned beneficially would include not only securities held by
you for your own benefit, whether in bearer form or registered in your own name
or otherwise, but would also include securities held by others for your benefit
or securities from which you obtain benefits substantially equivalent to those
of ownership (regardless of whether or how they are registered), such as, for
example, securities held for you by banks or other custodians, brokers (whether
in your name, their name or in "street name"), executors, administrators, or
trustees (including trusts in which you have only a remainder interest) and
securities held for your account by pledgees, and securities owned by a
partnership in which you are a member, and securities owned by any corporation
in which you and your associates own 10% or more of the stock. A person is
deemed to be the beneficial owner of securities beneficially owned by his
spouse, his minor children, or any relative sharing his home.
"Indirectly," when used to refer to beneficial ownership of securities,
means ownership through another such as a controlled corporation, member of the
family, estate, trust, partnership or other entity.
