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EXHIBIT 10.6
EXECUTION COPY
LOAN AGREEMENT
dated as of March 28, 1996
AMKOR/ANAM PILIPINAS, INC.
AS BORROWER
AND
THE KOREA DEVELOPMENT BANK
AS BANK
U.S.$71,250,000 LOAN
GUARANTEED BY
ANAM INDUSTRIAL CO., LTD.
XXXXXXX, XXXXX, XXXXXX & XXXXXX
XXXX XXXX
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TABLE OF CONTENTS
(CONTINUED)
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS.................................. 1
SECTION 2. COMMITMENT AND LOANS................................................ 6
SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST; OPTIONAL
PREPAYMENTS ........................................................ 7
SECTION 4. PAYMENTS; COMPUTATIONS; ETC......................................... 8
SECTION 5. YIELD PROTECTION, TAX, ETC.......................................... 10
SECTION 6. CONDITIONS PRECEDENT................................................ 13
SECTION 7. REPRESENTATIONS AND WARRANTIES...................................... 15
SECTION 8. COVENANTS OF THE BORROWER........................................... 18
SECTION 9. EVENTS OF DEFAULT................................................... 21
SECTION 10.MISCELLANEOUS....................................................... 23
EXHIBIT A - FORM OF NOTICE OF BORROWING
EXHIBIT B - FORM OF GUARANTEE
EXHIBIT C - FORM OF OPINION OF SPECIAL PHILIPPINE COUNSEL TO
THE BANK
EXHIBIT D - FORM OF OPINION OF SPECIAL KOREAN COUNSEL TO THE
BANK
EXHIBIT E - FORM OF OPINION OF SPECIAL NEW YORK COUNSEL TO
THE BANK
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LOAN AGREEMENT dated as of March 28, 1996, between: AMKOR/ANAM
PILIPINAS, INC., a corporation duly organized and validly existing under the
laws of the Republic of Philippines (the "Borrower"), and THE KOREA DEVELOPMENT
BANK (the "Bank").
The Borrower has requested that the Bank make loans to it in an
aggregate principal amount not exceeding U.S.$71,250,000 to finance the
expansion of the Borrower's semiconductor assembly plant in the Philippines and
the Bank is prepared to make such loans upon the terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS
1.01 Certain Defined Terms. As used herein, the following terms shall
have the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa.
"Affiliate" shall mean, with respect to any Person, any other Person
that directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise), provided,
that, in any event, any Person that owns directly or indirectly securities
having 5% or more of the voting power for the election of directors or other
governing body of a corporation or 5% or more of the partnership or other
ownership interests of any other Person (other than as a limited partner of such
other Person will be deemed to control such corporation or other Person.
"Applicable Margin" shall mean 0.80% per annum.
"Applicable Lending Office" shall mean, the Bank, the "Lending Office"
or "Lending Offices" of the Bank (or of an affiliate of the Bank) designated for
the relevant Tranche of Loan on the signature pages hereof or such other office
or offices of the Bank (or of an affiliate of the Bank) as the Bank may, subject
to Section 10.06 hereof, from time to time specify to the Borrower as the
office(s) by which the Loans (or portions thereof) of such Tranche are to be
made and maintained.
"Basic Documents" shall mean, collectively, this Agreement and the
Guarantee.
"Business Day" shall mean any day (a) on which commercial banks are not
authorized or required to close in Manila, Hong Kong, Seoul, or New York City
and (b) if such day relates to a borrowing of, a payment or prepayment of
principal of or interest on, or an
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Interest Period for, a Loan or a notice by the Borrower with respect to any such
borrowing, payment, prepayment or Interest Period, that is also a London
Business Day.
"Central Bank" shall mean the Bangko Sentral ng Pilipinas.
"Closing Date" shall mean the date upon which the initial Loan
hereunder is made.
"Commitment" shall mean, collectively, the Tranche A Commitment and the
Tranche B Commitment.
"Commitment Termination Date" shall mean September 28, 1996; provided,
that if such day is not a Business Day, then the Commitment Termination Date
shall be the next preceding Business Day.
"Debit-Equity Ratio" shall mean, at any time, the ratio of total
liabilities to total equity of the Borrower; and as used in this definition,
"total liabilities" and "total equity" shall have the respective meanings
assigned to them under GAAP and applied on a basis consistent with those used in
the preparation of the financial statements referred to, in Section 8.01,
provided that "total liabilities" shall include any and all debts of the
Borrower regardless of the nature o r maturity thereof (including without
limitation all amounts from time to time outstanding hereunder) and, provided,
further, that "total equity" shall exclude appraisal surplus, if any, of the
Properties or assets of the Borrower.
"Default" shall mean an Event of Default or an event that with notice
or lapse of time or both would become an Event of Default.
"Dollars" and "U.S.$" shall mean lawful money of the United States of
America.
"Event of Default" shall have the meaning assigned to such term in
Section 9 hereof.
"Fee Letter" shall mean the arrangement fee letter agreement referred
to in Section 2.04(b) hereof.
"Final Maturity Date" shall mean March 28, 2001; provided that if the
Final Maturity Date would otherwise be a day that is not a Business Day, then
the Final Maturity Date shall be the next preceding Business Day.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the Philippines.
"Guarantee" shall mean a Guarantee Agreement substantially in the form
of Exhibit B hereto between the Guarantor and the Bank, as the same shall be
modified and supplemented and in effect from time to time.
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"Guarantor" shall mean Anam Industrial Co., Ltd., a corporation
organized under the laws of Korea.
"Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in t he ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments issued or accepted
by banks and other financial institutions for account of such Person; (e)
capitalized lease obligations of such Person; (f) obligations of such Person
under interest rate protection agreements; and (g) Indebtedness of others
guaranteed by such Person.
"Interest Period" shall mean, with respect to any Loan, (i) initially,
each period commencing on the date such Loan is made and ending on the
Commitment Termination Date, and (ii) thereafter, each successive six-month
period commencing on the last day of the next preceding Interest Period for such
Loan and ending on the numerically corresponding day in t he sixth calendar
month thereafter, except that each Interest Period that commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of such sixth subsequent calendar month.
Notwithstanding the foregoing: (i) any Interest Period that commences before,
and would otherwise end after, a Principal Payment Date shall end on such
Principal Payment Date; (ii) the first Interest Period for any Loan made
subsequent to the initial Loan shall end-on the last day of the Interest Period
for the initial Loan in effect on the date of such subsequent Loan; (iii) each
Interest Period that would otherwise end on a day which is not a Business Day
shall end on the next succeeding Business Day (or, if such next succeeding
Business Day falls in the next succeeding calendar month, on the next preceding
Business Day); and (iv) anything in this Agreement to the contrary
notwithstanding, the final Interest Period for each Loan shall end on the Final
Maturity Date.
"Korea" shall mean the Republic of Korea.
"Lien" shall mean, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement and the Guarantee, a Person shall be
deemed to own subject to a Lien any Property that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such Property.
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"Loans" shall mean, collectively, the Tranche A Loans and the Tranche B
Loans, and "Loan" shall mean any thereof.
"London Business Day" shall mean any day on which dealings in Dollar
deposits are carried out in the London interbank market.
"London Interbank Rate" shall mean, with respect to any Interest Period
for any Loan therefor, the rate per annum determined by the Bank in its sole
discretion to be the arithmetic mean (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the respective rates per annum quoted on the "LIBO" page
of the Reuters screen (or such other page as may replace such "LIBO" page on
such screen for the purpose of displaying London interbank offered rates of
major banks for Dollar deposits) at approximately 11:00 a.m. London time (or as
soon thereafter as-practicable) on the date two London Business Days prior to
the first, day of such Interest Period for a period equal or approximately equal
to such Interest Period in respect of an amount comparable to the principal
amount of such Loan scheduled to be outstanding for such Interest Period;
provided that if for any Interest Period for any Loan, no such rate appears on
the Reuters screen (or if the basis for determining the rate so appearing is
changed in a manner which the Bank determines is unacceptable), the London
Interbank Rate in respect of such Interest Period shall be the arithmetic mean,
as determined by the Bank, of the rates per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) quoted by reference banks in London
selected by the Bank in its sole discretion at approximately 11:00 a.m. London
time (or as soon thereafter as practicable) on the date two London Business Days
prior to the first day of such Interest Period for the offering by such
reference bank to leading banks in the London interbank market of Dollar
deposits having a term comparable to such Interest Period and in an amount
comparable to the principal amount of such Loan scheduled to be outstanding for
such Interest Period.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the Property, business, operations, financial condition, prospects, liabilities
or capitalization of the Borrower taken as a whole, (b) the ability of the
Borrower to perform its obligations hereunder, (c) the validity or
enforceability of any of the Basic Documents, (d) the rights and remedies of the
Bank under any of the Basic Documents or (e) the timely payment of the principal
of or interest on the Loans or other amounts payable in connection therewith.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).
"Philippines" shall mean the Republic of Philippines.
"Post-Default Rate" shall mean, in respect of any principal of any Loan
or any other amount payable by the Borrower under this Agreement or the Fee
Letter that is not paid when due (whether at stated maturity, by acceleration,
by optional or mandatory prepayment or otherwise), a rate per annum during the
period from and including the due date to but excluding
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the date on which such amount is paid in full equal to the sum of 1% per annum
plus the Applicable Margin plus the London Interbank Rate for the overdue amount
for such period as the Bank shall elect in its sole discretion (provided that no
such period shall exceed 6 months).
"Principal Payment Date" shall mean each of (i) the six (6) semi-annual
dates occurring 24, 30, 36, 42, 48 and 54 months after the date hereof and (ii)
the Final Maturity Date; provided that if any such day is not a Business Day,
then the relevant Principal Payment Date (other than in the case of the Final
Maturity Date) shall be the next succeeding Business Day (unless such Business
Day falls in a subsequent calendar month, in which event the relevant Principal
Payment Date shall be the next preceding Business Day).
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Quarterly Dates" shall mean the date three months after the date
hereof and each successive date occurring three months thereafter (or if there
is no such date in the appropriate month, the last day of such month provided
that if any such date is not a Business Day, the relevant Quarterly Date shall
be the next succeeding Business Day (unless such succeeding Business Day falls
in another calendar month, in which event the relevant Quarterly Date shall be.
the next preceding Business Day) and that if,. in any such successive third
calendar month after the date hereof, there is no date numerically corresponding
to the date hereof, the relevant Quarterly Date shall be the last Business Day
of such third calendar month.
"Regulatory Change" shall mean, with respect to the Bank, any change
after the date of this Agreement in applicable law, regulations or treaty or the
adoption or making after such date of any interpretation, directive or request
applying to a class of banks including the Bank of or under any applicable law,
regulations or treaty (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) by any court or governmental or
monetary authority charged with the interpretation or administration thereof.
"Tranche" of a Loan or a Commitment, as the case may be, shall refer,
respectively, to whether a Loan is a Tranche A Loan or a Tranche B Loan or
whether a Commitment is a Tranche A Commitment or a Tranche B Commitment, each
of which shall constitute a Tranche.
"Tranche A Commitment" shall mean the obligation of the Bank to make
Tranche A Loans in an aggregate amount up to but not exceeding the amount set
opposite the Bank's name on the signature pages hereof under the caption
"Tranche A Commitment" or, as the context may require, such amount.
"Tranche A Loans" shall have the meaning attributed thereto in Section
2.01(a) hereof.
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"Tranche B Commitment" shall mean the obligation of the Bank to make
Tranche B Loans in an aggregate amount up to but not exceeding the amount set
opposite the Bank's name on the signature pages hereof under the caption
"Tranche B Commitment" or, as the context may require, such amount.
"Tranche B Loans" shall have the meaning attributed thereto in Section
2.01(b) hereof.
1.02 Accounting Terms and Determination. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Bank hereunder shall be prepared, in accordance
with GAAP, applied on a basis consistent with that used in the audited financial
statements of the Borrower referred to in Section 7.02 hereof. To enable the
ready and consistent determination of compliance with the covenants set forth in
Section 8 hereof, the Borrower will not change the last day of its fiscal year
from December 31 of each year, or the last day of the first fiscal semi-annual
period in each of its fiscal years from June 30 of each year.
SECTION 2. COMMITMENT AND LOANS
2.01 Loans.
(a) The Bank agrees, on the terms and conditions of this Agreement, to
make one or more term loans ("Tranche A Loans") to the Borrower in Dollars on
any Business Day occurring on or before the Commitment Termination Date in an
aggregate principal amount up to but not exceeding the amount of the Tranche A
Commitment of the Bank.
(b) The Bank agrees, on the terms and conditions of this Agreement, to
make one or more term loans ("Tranche B Loans") to the Borrower in Dollars on
any Business Day occurring on or before the Commitment Termination Date in an
aggregate principal amount up to but not exceeding the amount of the Tranche B
Commitment of the Bank.
2.02 Borrowings. The Borrower shall give the Bank notice of each
borrowing hereunder as provided in Section 4.05 hereof in substantially the form
of Exhibit A hereto. The amount of the Loans to be made by the Bank on the date
of such borrowing shall, subject to the terms and conditions of this Agreement,
be made available to the Borrower by depositing the same, in immediately
available funds, to such account, for account of the Borrower, as shall be
designated by the Borrower in the relevant notice of borrowing.
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2.03 Changes of Commitment.
(a) The Borrower shall have the right at any time to terminate, in
whole or in part, the aggregate unused amount of the Commitment; provided that
the Borrower shall give the Bank notice of each such termination as provided in
Section 4.04 hereof.
(b) The aggregate amount of the Commitment shall be automatically
reduced to zero on the Commitment Termination Date.
(c) Commitment once terminated may not be reinstated.
2.04 Fees.
(a) The Borrower shall pay to the Bank a commitment fee at a rate per
annum equal to 0.25% on the daily average unused and available amount of the
Commitment, for the period from and including the date thirty (30) days after
the date of this Agreement to but not including the earliest of (i) the date the
entire Commitment is terminated pursuant to Section 2.03 hereof, (ii) the date
on which the full amount of the Commitment is drawn down hereunder or (iii) the
Commitment Termination Date. Accrued commitment fee shall be payable on each
Quarterly Date, on the date of each partial termination of the Commitment
pursuant to Section 2.03(a) hereof, and on the earliest of (i) the date the
entire undrawn Commitment is terminated pursuant to Section 2.03(a) hereof, (ii)
the date on which the full amount of the Commitment is drawn down hereunder or
(iii) the Commitment Termination Date.
(b) Whether or not any Loan is made hereunder, the Borrower shall pay
to the Bank a non-refundable arrangement fee in the amount and at the time set
forth in, and otherwise in accordance with the terms of, the arrangement fee
letter agreement dated even date herewith between the Borrower and the Bank.
2.05 Lending Offices. The Loans of each Tranche made by the Bank shall
be made and maintained at the Bank's Applicable Lending Office for Loans of such
Tranche.
SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST; OPTIONAL PREPAY MENTS.
3.01 Repayment of Loans. The Borrower hereby promises to pay to the
Bank the principal of the Loans in seven substantially equal installments, each
(as nearly as possible) equal to an amount that is one-seventh of the amount
outstanding thereof on the initial Principal Payment Date, commencing on the
initial Principal Payment Date and thereafter on each subsequent Principal,
Payment Date. Anything in this Agreement to the contrary notwithstanding, the
principal repayment installment payable on the Final Maturity Date shall in all
cases be in an amount equal to the entire principal amount of the Loans
outstanding on such date.
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3.02 Interest. The Borrower hereby promises to pay to the Bank interest
on the unpaid principal amount of each Loan for the period from and including
the date of such Loan to but excluding the date such Loan shall be paid in full,
for each Interest Period relating thereto, at the London Interbank Rate for such
Loan for such Interest Period plus the Applicable Margin. Notwithstanding the
foregoing, the Borrower hereby promises to pay to the Bank interest at the
applicable Post-Default Rate on any principal of any Loan and on any other
amount payable by the Borrower hereunder to or for account of the Bank, which
shall not be paid in full when due (whether at stated maturity, by acceleration,
by mandatory prepayment or otherwise), for the period from and including the due
date thereof to but excluding the date the same is paid in full. Accrued
interest on each Loan shall be payable on the last day of each Interest Period
therefor and upon the payment or prepayment thereof (but only on the principal
amount so paid or prepaid), except that interest payable at the Post-Default
Rate shall be payable from time to time on demand. Promptly after the
determination of any interest rate provided for herein or any change therein,
the Bank shall give notice thereof to the Borrower.
3.03 Optional Prepayments. The Loans may be prepaid in part or in full
on the last day of any Interest Period therefor, provided that (i) the Borrower
shall give the Bank notice of each such prepayment as provided in Section 4.04
hereof, (ii) upon any such prepayment the Borrower shall pay interest accrued on
the amount so prepaid up to, but not including, the date of such prepayment (to
the extent not already paid) together with any amount payable in respect of such
prepayment under Section 5.04 hereof and all other amounts then due and payable
hereunder, and (iii) any such partial prepayment shall be applied to the
repayment installments of the Loans in the inverse order of maturity.
Any amount prepaid may not be reborrowed.
SECTION 4. PAYMENTS; COMPUTATIONS; ETC.
4.01 Payment.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by this Borrower under this
Agreement and the Fee Letter, shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Bank at account
number-544-7-71671 (CHIPS UID 069628) maintained by the Bank with Chemical Bank
New York, New York, or any other account specified by the Bank, not later than
10:00 a.m. New York time on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day).
(b) The Bank may (but shall not be obligated to) debit the amount of
any such payment that is not made by such time to any ordinary deposit account
of the Borrower with the Bank (with notice to, the Borrower).
(c) The Borrower shall, at the time of making each payment under this
Agreement, specify to the Bank the Loans or other amounts payable by the
Borrower hereunder
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to which such payment is to be applied (and in the event that the Borrower fails
to so specify, or if an Event of Default has occurred and is continuing, the
Bank may apply such payment in such manner as it may determine to be
appropriate).
(d) Except as otherwise provided herein, if the due date of any payment
under this Agreement would otherwise fall on a day that is not a Business Day,
such date shall be extended to the next succeeding Business Day, and interest
shall be payable for any principal so extended for the period of such extension.
(e) Except to the extent otherwise provided herein: (a) each payment of
commitment fee shall be applied pro rata according to the amount of the
respective Tranche A Commitment and Tranche B Commitment; (b) each drawdown of
Loans shall be made pro rata according to the amount of the respective Tranche A
Commitment and Tranche B Commitment; (c) each repayment or prepayment of Loans
by the Borrower shall be made pro rata in accordance with the respective
aggregate outstanding amount of the Tranche A Loans and Tranche B Loans; and (d)
each payment of interest on Loans by the Borrower shall be made (subject to any
deduction or withholding, and without limiting any obligation of the Borrower to
pay any additional amount, in each case contemplated by Section 5.05 hereof) pro
rata in accordance with the amounts of interest on such Loans then due and
payable in respect of each Tranche.
4.02 Computations. Each of (a) interest on Loans, (b) the commitment
fee payable under Section 2.04(a) hereof and (c) any interest to be calculated
at the relevant Post Default Rate on Loans or on any of the fees payable under
Section 2.04 hereof, shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day but excluding the last day)
occurring in the period for which such amount is payable.
4.03 Minimum Amounts. Except for any prepayments made pursuant to
Section 5 hereof, each borrowing of principal of Loans (if less than the full
amount of the available Commitment) shall be in an aggregate amount at least
equal to U.S.$5,000,000 and in an integral multiple of U.S.$1,000,000, each
partial prepayment of principal of Loans shall be in an aggregate amount at
least equal to U.S.$5,000,000 and in an integral multiple of U.S.$1,000,000 and
each partial cancellation of Commitment shalt be in an aggregate amount at least
equal to U.S.$5,000,000 and in an integral multiple of U.S.$1,000,000.
4.04 Certain Notices. Notices by the Borrower to the Bank of
termination of -the Commitment and of borrowings and optional prepayments of
Loans shall be irrevocable and shall be effective only if received by the Bank
not later than 10:00 a.m. Seoul time on the number of days or Business Days
prior to the date of the relevant termination, borrowing or prepayment or the
first day of such Interest Period specified below:
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Number of Days or
Notice Business Days Prior
------ -------------------
Termination of Commitment 30 days
Borrowing of Loans 5 Business Days
Prepayment of Loans 30 Days
Each such notice of termination shall specify the amount of the Commitment to be
terminated. Each such notice of borrowing or optional prepayment shall specify
the Loans to be borrowed or prepaid. and the amount (subject to Section 4.03
hereof) of each Loan to be borrowed or prepaid and the date of borrowing or
optional prepayment (which shall be a Business Day).
4.05 Set-off, Etc.
(a) The Borrower agrees that, in addition to (and without limitation
of) any right of set-off, banker's lien or counterclaim the Bank may otherwise
have, the Bank shall be entitled, at its option, to offset balances held by it
for account of the Borrower at any of its offices, in Dollars or in any other
currency, against any principal of or interest oh any of the Loans or any other
amount payable to the Bank hereunder, that is not paid when due (regardless of
whether such balances are then due to the Borrower), in which case it shall
promptly notify the Borrower thereof, provided that the Bank's failure to give
such notice shall not affect the validity thereof.
(b) Nothing contained herein shall require the Bank to exercise any
such right or shall affect the right of the Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Borrower.
SECTION 5. YIELD PROTECTION, TAX, ETC.
5.01 Additional Costs.
(a) The Borrower shalt pay directly to the Bank from time to time such
amounts as the Bank may determine to be necessary to compensate the Bank for any
costs that it determines are attributable to its making or maintaining of any
Loans or its obligation to make any Loans hereunder, or any reduction in any
amount receivable by the Bank hereunder in respect of any of such Loans or such
obligation (such increases in costs and reductions in amounts receivable being
herein called "Additional Costs"), resulting in whole or in part from any
Regulatory Change that:
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(i) changes the basis of taxation of any amounts payable to
the Bank under this Agreement in respect of any of such Loans (other
than taxes imposed on or measured by the overall net income of the Bank
or of its Applicable Lending office for any of such Loans by the
jurisdiction in which the Bank has its principal office or such
Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or
similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of, the Bank
(including any of such Loans or any deposits referred to in the
definition of "London Interbank Rate" in Section 1.01 hereof), or any
commitment of the Bank (including the Commitment hereunder); or
(iii) imposes any other condition affecting this Agreement (or
any of such extensions of credit or liabilities) or the Commitment.
(b) Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Borrower shall pay directly to the
Bank from time to time on request such amounts as the Bank may determine to be
necessary to compensate the Bank for any costs that it determines are
attributable to the maintenance by the Bank (or any Applicable Lending Office),
pursuant to any law or regulation or any interpretation, directive or request
(whether or not having the force of law and whether or not the failure to comply
therewith would be unlawful) of any court or governmental or monetary authority
(i) following any Regulatory Change or (ii) implementing any risk-based capital
guideline or other requirement (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) heretofore or
hereafter issued by any government or governmental or supervisory authority
implementing at the national level the Basle Accord, of capital in respect of
the Commitment or Loans (such compensation to include an amount equal to any
reduction of the rate of return on assets or equity of the Bank (or any
Applicable Lending Office) to a level below that which the Bank (or any
Applicable Lending Office) could have achieved but for such law, regulation,
interpretation, directive or request). For purposes of this Section 5.01(b),
"Basle Accord" shall mean the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, modified and
supplemented and in effect from time to time or any replacement thereof.
(c) The Bank shall notify the Borrower of any event occurring after the
date of this Agreement entitling the Bank to compensation under paragraph (a) or
(b) of this Section 5.01 as promptly as practicable after the Bank obtains
actual knowledge thereof. The Bank will furnish to the Borrower a certificate
setting forth the basis and amount of each request by the Bank for compensation
under paragraph (a) or (b) of this Section 5.01. Determinations and allocations
by the Bank for purposes of this Section 5.01 of the effect of any Regulatory
Change pursuant to paragraph (a) or (b) of this Section 5.01, or of the effect
of capital maintained Pursuant to paragraph (b) of this Section 5.01, on its
costs or rate of return of maintaining Loans or its obligation to make Loans, or
on amounts receivable by it in respect of Loans, and of the
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amounts required to compensate the Bank under this Section 5.01, shall be
conclusive, provided that such determinations and allocations are made on a
reasonable basis.
(d) The Borrower shall be required to make any payment under this
Section 5.01, the Borrower may, not later than 30 days after receipt of notice
that such payment is required, upon giving not less than 15 days' prior notice
to the Bank claiming Additional Costs, prepay in full (but not in part) the
Loans, together with accrued interest thereon and all other amounts payable to
the Bank hereunder without prepayment penalty.
5.02 Alternative Interest Rate. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any London Interbank
Rate for any Interest Period:
(a) the Bank determines, which determination shall be conclusive, that
the Reuters screen is not publishing a rate or rates from which the London
Interbank Rate can be determined and that quotations of interest rates for the
relevant deposits referred to in the definition of "London Interbank Rate" in
Section 1.01 hereof are not being provided by any reference bank in the relevant
amounts or for the relevant maturities for purposes of determining rates of
interest for Loans as provided herein; or
(b) the Bank determines, which determination shall be conclusive, that
the relevant rates of interest referred to in the definition of "London
Interbank Rate" in Section 1.01 hereof upon the basis of which the rate of
interest for Loans for such Interest Period is to be determined are not likely
adequately to cover the cost to the Bank of making or maintaining Loans for such
Interest Period;
then the Bank shall give the Borrower prompt notice thereof whereupon, during
the period of 30 days next succeeding the date of any such notice, the Bank and
the Borrower will negotiate in good faith for the purpose of agreeing upon an
alternative, mutually acceptable basis for determining the interest rate to be
applicable to the Loans for such Interest Period (hereinafter called the
"Substitute Basis"). If at the expiry of said thirty-day period the Bank and the
Borrower have agreed upon a Substitute Basis, the Substitute Basis shall be
retroactive to and take effect from the beginning of such, Interest Period (but
shall not affect the rate of interest for any prior Interest Period). If at the
expiry of said thirty-day period a Substitute Basis shall not have been agreed
upon as aforesaid, the Commitment shall automatically be cancelled and the
Borrower shall, on the fifth Business Day next succeeding the expiry of said
thirty-day period, prepay in full (but not in part) the Loans together with (a)
accrued interest thereon at a rate equal to the cost (expressed as a rate per
annum) to the Bank (as reasonably determined by the Bank) of funding the Loans
for the period from the last day of the immediately preceding Interest Period to
the date of prepayment plus the Applicable Margin and (b) all other amounts
payable to the Bank hereunder.
5.03 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for the Bank or its Applicable Lending
Office to honor its obligation to make or maintain Loans hereunder, then the
Bank shall promptly notify the
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Borrower thereof, whereupon the aggregate principal amount of the Loans then
outstanding shall forthwith be repaid by the Borrower together with interest
accrued thereon and any other amounts payable to the Bank under this Agreement.
Upon the occurrence of any such change making it unlawful for the Bank to give
effect to its obligations to make or maintain its Loans as aforesaid, the Bank
shall promptly notify the Borrower thereof, and promptly provide the Borrower
with evidence certified by the Bank as to such change.
5.04 Compensation. The Borrower shall pay to the Bank, upon the request
of the Bank, such amount or amounts as shall be sufficient (in the reasonable
opinion of the Bank) to compensate it for any loss, cost or expense that the
Bank determines is attributable to:
(a) any payment, mandatory or optional prepayment of a Loan for any
reason (including the acceleration of the Loans pursuant to Section 9 hereof) on
a date other than the last day of an Interest Period for such Loan (without
prejudice, however, to the provisions in Section 3.03 hereof); or
(b) any failure by the Borrower for any reason (including the failure
of any of the conditions precedent specified in Section 6 hereof to be
satisfied) to borrow a Loan from the Bank on the date for such borrowing
specified in the relevant notice of borrowing given pursuant to Section 2.02
hereof, or
(c) any failure by the Borrower to make a prepayment of any Loan on a
date notified to the Bank as the date for such prepayment pursuant to Section
4.04 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid or prepaid or
not borrowed or prepaid for the period from the date of such payment, prepayment
or failure to borrow or prepay to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow or prepay, the
Interest Period for such Loan that would have commenced on the date specified
for such borrowing or prepayment) at the applicable rate of interest for such
Loan provided for herein over (ii) the amount of interest that otherwise would
have accrued on such principal amount at a rate per annum equal to the amount
the Bank would have bid in the London interbank market for Dollar deposits of
leading banks in amounts comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by the Bank).
5.05 Taxes. The Borrower covenants and agrees that, whether or not any
Loan is made hereunder: (a) all payments by the Borrower under or in respect of
this Agreement and the Fee Letter, including amounts payable under clause (b) of
this Section 5.05, shall be made free and clear of and without reduction by
reason of any present or future income, stamp and other taxes, levies,
deductions, charges or withholdings whatsoever imposed, withheld, levied or
collected by the Philippines or any political subdivision or taxing authority
thereof or therein, and interest thereon and penalties with respect thereto, if
any, on or in respect of this Agreement, the Fee Letter or the Loans, or the
registration, notarization or other formalization thereof or any
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payments in respect thereof (collectively, "Taxes"), all of which will be paid
by the Borrower for its own account, prior to the date on which penalties attach
thereto; (b) the Borrower will indemnify the Bank against, and reimburse the
Bank on demand for, any Taxes and any loss, liability, claim or expense,
including interest, penalties and legal fees, that the Bank incurs at any time
by reason of any failure of the Borrower to make any payment of Taxes when due
or by reason of any change described in Section 5.03 hereof, (c) without
limiting the provisions of Section 5.01(a) (but without duplication), in the
event that the Borrower is required, by any Regulatory Change, to deduct or
withhold any Taxes from any amounts payable on, under or in respect of this
Agreement or the Loans, the Borrower shall immediately pay such additional
amount or amounts as may be required, after such deduction or withholding, to
enable the Bank to receive from the Borrower an amount equal to the full amount
stated to be payable under this Agreement; (d) if at any time the Borrower is
required to make any deduction or withholding from any sum payable by it
hereunder (or if thereafter there is any change in the rates at which or the
manner in which such deductions or withholdings are calculated), the Borrower
shall promptly notify the Bank, and shall promptly (and in any event within 30
days) after it has made any payment from which it is required to make any
deduction or withholding deliver to the Bank a certified copy of any receipt
issued by the applicable taxation or other authority evidencing the deduction or
withholding of all amounts required to be deducted or withheld from such payment
and the Borrower shall indemnify the Bank against any loss the Bank may suffer
as a result of the Borrower's failing to provide any certified copies of tax
receipts or otherwise failing to comply with the administrative procedures
required in order to enable the Bank to claim any credit or offset available to
it in computing its overall net income; (e) the Borrower shall furnish to the
Bank certified copies of tax receipts in respect of any payment of Taxes as
contemplated by this Section 5.05 within 30 days after the respective due dates
therefor, and the Borrower shall promptly furnish to the Bank any other
information, documents and receipts that the Bank may require, in its sole
discretion and from time to time, to establish to its satisfaction that full and
timely payment has been made of all Taxes required to be paid hereunder, and (f)
the covenants and agreements of the Borrower under this Section 5.05 shall
survive the expiration of the Commitment and repayment of the Loans.
SECTION 6. CONDITIONS PRECEDENT
6.01 Initial Loan. The obligation of the Bank to make the initial Loan
hereunder is subject to the condition precedent that the Bank shall have
received the following documents, each of which shall be in form and substance
satisfactory to the Bank:
(a) Borrower Corporate Documents. The following documents, each
certified as indicated below:
(i) a certificate of a director of the Borrower, dated the
Closing Date and certifying (A) that attached thereto is a true and
complete copy of the articles of incorporation and bylaws of the
Borrower as amended and in effect at all times from the date on which
the resolutions referred to in clause (B) were adopted to and including
the
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date of such certificate, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the board of directors of
the Borrower authorizing the execution, delivery and performance of
this Agreement and borrowings hereunder, and that such resolutions have
not been modified, rescinded or amended and are in full force and
effect, and (C) as to the incumbency and specimen signature of each
officer of the Borrower executing this Agreement and each other
document to be delivered by the Borrower from time to time in
connection herewith (and the Bank may conclusively rely on such
certificate until it receives notice in writing from the Borrower);
(ii) a certificate of another officer of the Borrower as to
the incumbent and specimen signature of such director of the Borrower;
(iii) a certificate of good standing issued by the Securities
and Exchange Commission of the Philippines;
(iv) the certificate of registration of the Borrower's
Articles of Incorporation issued by the Securities and Exchange
Commission of the Philippines.
(b) Guarantor Corporate Documents. The following documents, each
certified as indicated below:
a certificate of the Representative Director or any other duly
authorized officer of the Guarantor, dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
articles of incorporation and the corporate registry extracts of the
Guarantor as appended and in effect at all times from the date on which
the resolutions referred to in clause (B) were adopted to and including
the date of such certificate, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the board of directors of
the Guarantor authorizing the execution, delivery and performance of
the Guarantee, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, and (C) as to
the incumbency and specimen signature of each officer of the Guarantor
executing the Guarantee and each other document to be delivered by the
Guarantor from time to time in connection therewith (and the Bank may
conclusively rely on such certificate until it receives notice in
writing from the Guarantor).
(c) Officer's Certificate. A certificate of a duly authorized officer
of the Borrower, dated the Closing Date, to the effect set forth in the first
sentence of Section 6.02 hereof.
(d) Opinion of Special Philippine Counsel to the Bank. An opinion,
dated the Closing Date, of Puno & Puno, Philippine counsel to the Bank,
substantially in the form of Exhibit C hereto.
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(e) Opinion of Special Korean Counsel to the Bank. An opinion, dated
the Closing Date, of Xxx & Xxxxx, special Korean counsel to the Bank,
substantially in the form of Exhibit D hereto.
(f) Opinion of Special New York Counsel to the Bank. An opinion, dated
the Closing Date, of Milbank, Tweed, Xxxxxx & XxXxxx, special New York counsel
to the Bank, substantially in the form of Exhibit E hereto.
(g) Guarantee. The Guarantee, duty executed and delivered by the
Guarantor and the Bank.
(h) Governmental Approvals. Certified copies of all governmental
licenses, approvals, filings and registrations (including all foreign exchange
approvals, approval of the Central Bank authorizing the execution, delivery and
performance by the Borrower of the Loan Agreement, the approval of the Central
Bank approving the terms and conditions (including the Final Maturity Date) of
an executed copy of this Agreement, and the municipal permits and licenses from
the Municipality of Muntinlupa, Metro Manila) that in the opinion of the Bank or
its counsel are required under applicable law for the Borrower to make and
perform this Agreement and to borrow hereunder, for the Guarantor to make and
perform the Guarantee, and for this Agreement and the Guarantee to be admissible
in evidence in the United States of America, the State of New York, the
Philippines or Korea, as the case may be.
(i) Process Agent Acceptance Letter. An acceptance letter or letters
from the process agent referred to in Section 10.12 hereof and in Section 5.09
of the Guarantee accepting its respective appointments set forth herein and
therein.
(j) Fees. The fees referred to in Section 2.04 hereof, to the extent
then due and payable, have been paid (or the Bank shall have received evidence
satisfactory to it that irrevocable instructions have been issued for such
payment on the relevant due date or dates).
(k) Other Documents. Such other documents as the Bank or special New
York counsel to the Bank may reasonably request.
6.02 Initial and Subsequent Loans. The obligation of the Bank to make
any Loan to the Borrower upon the occasion of each borrowing hereunder
(including the initial borrowing) is subject to the further conditions precedent
that, both immediately prior to the making of such Loan and also after giving
effect thereto and to the intended use thereof: (a) no Default shall have
occurred and be continuing; and (b) the representations and warranties made by
the Borrower in Section 7, hereof shall be true and complete on and as of the
date of the making of such Loan with the same force and effect as if made on and
as of such date (or, if any such representation or warranty is expressly stated
to have been made as of a specific date, as of such specific date). Each notice
of borrowing by the Borrower hereunder shall constitute a certification by the
Borrower to the effect set forth in the preceding sentence (both as of the date
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of such notice and, unless the Borrower otherwise notifies the Bank Prior to the
date of such borrowing, as of the date of such borrowing).
6.03 Conditions for Benefit of Bank. The conditions set for in this
Section 6 are for the exclusive benefit of the Bank and may be waived only by
the Bank.
SECTION 7. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Bank that:
7.01 Corporate Existence. The Borrower: (a) is a corporation duly
organized, validly existing and in good standing under the laws of the
Philippines; (b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and approvals necessary
to own its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could have a Material
Adverse Effect.
7.02 Financial Condition. The Borrower has heretofore furnished to the
Bank the balance sheet of the Borrower as at December 31, 1995 and the related
statements of incorporate, retained earnings and cash flow of the Borrower for
the fiscal year ended on said date, with the opinion thereon of Sycip, Gorres,
Velayo & Co., certified public accountants. All such financial statements are
complete and correct and fairly present the financial condition of the Borrower,
as at said date and the results of its operations for the fiscal year ended on
said date (subject to normal year-end audit adjustments), all in accordance with
GAAP applied on a consistent basis. The Borrower has on the date hereof no
material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said balance
sheet as at said date. Since December 31, 1995, there has been no material
adverse change in the financial condition, operations, business or prospects
taken as a whole of the Borrower from that set forth in said financial
statements as at said date.
7.03 Litigation. There are no legal or arbitral proceedings, or any
proceedings by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of the Borrower) threatened against the Borrower
which, if adversely determined, could have a Material Adverse Effect.
7.04 No Breach. None of the execution and delivery of this Agreement,
the consummation of the, transactions herein contemplated or compliance with the
terms and Provisions hereof will conflict with or result in a breach of, or
require any consent under, the articles of incorporation and bylaws of the
Borrower, or any applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any agreement or
instrument to which the Borrower is a party or by which it or any of its
Property is bound or to which any of them is subject, or constitute a default
under any such agreement or
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instrument, or result in the creation or imposition of any Lien upon any
Property of the Borrower pursuant to the terms of any such agreement or
instrument.
7.05 Corporate Action. The Borrower has all necessary corporate power,
authority and legal right to execute, deliver and perform its obligations under
this Agreement; the execution, delivery and performance by the Borrower of this
Agreement have been duly authorized by all necessary corporate action on its
part (including any required shareholder approvals); and this Agreement has been
duly and validly executed and delivered by the Borrower and constitutes its
legal, valid and binding obligation, enforceable against the Borrower in
accordance with its terms.
7.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery or
performance by the Borrower of this Agreement or for the legality, validity or
enforceability hereof, except that the amount of each borrowing hereunder shall
be reported to, and registered with, the Central Bank.
7.07 Taxes. The Borrower has filed all income tax returns and all other
material tax returns that are required to be filed by it and has paid all taxes
due pursuant to such returns or pursuant to any assessment received by the
Borrower. The charges, accruals and reserves on the books of the Borrower in
respect of taxes and other governmental charges are, in the opinion of the
Borrower, adequate. The Borrower has not given or been requested to give a
waiver of the statute of limitations relating to the payment of any taxes or
other impositions.
7.08 Capitalization. The authorized capital stock of the Borrower
consists, on the date hereof, of an aggregate of 81,279,809 shares consisting of
77,833,333 shares of common stock, par value P1.00 per share, each of which
shares is fully paid, subscribed and nonassessable. As of the date hereof at
least 40% of such shares of common stock are owned beneficially and of record by
the Guarantor.
7.09 Subsidiaries. The Borrower does not have, on the date hereof, any
subsidiaries other than Automated Microelectronics, Inc.
7.10 True and Complete Disclosure. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of the
Borrower to the Bank in connection with the negotiation, preparation or delivery
of this Agreement and the Guarantee or included herein or therein or delivered
pursuant hereto or thereto, when taken as a whole do not contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading. All written information furnished after the date
hereof by the Borrower to the Bank in connection with this Agreement and the
Guarantee and the transactions contemplated hereby and thereby will be true,
complete and accurate in every material respect, or (in the case of projections)
based on reasonable estimates, on the date as of which such information is
stated or certified. There is no fact known to the Borrower that could have a
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Material Adverse Effect that has not been disclosed herein, in the Guarantee or
in a report, financial statement, exhibit, schedule, disclosure letter or other
writing furnished to the Bank for use in connection with the transactions
contemplated hereby or thereby.
7.11 Ranking. The obligations of the Borrower under this Agreement rank
at least with all other unsecured and unsubordinated Indebtedness of the
Borrower except for such Indebtedness as is entitled to priority by operation of
law.
7.12 Lien. No Lien exists over all or any of the Borrower's Property
other than as disclosed in the financial statements referred to in Section 7.02.
The representations herein shall be deemed automatically to be renewed
and restated on the last day of each Interest Period for any Loan.
SECTION 8. COVENANTS OF THE BORROWER. The Borrower covenants and agrees
with the Bank that, so long as any Commitment or Loan is outstanding and until
payment in full of all amounts payable by the Borrower hereunder:
8.01 Financial Statements Etc. The Borrower shall deliver to the Bank:
(a) as soon as available and in any event within 60 days after the end
of each semi-annual fiscal period of each fiscal year of the Borrower,
statements of income, retained earnings and cash flow of the Borrower for such
period and for the period from the beginning of the respective fiscal year to
the end of such period, and the related balance sheet of the Borrower as at the
end of such period, setting forth in each case in comparative form the
corresponding figures for the corresponding period in the preceding fiscal year,
accompanied by a certificate of a senior financial officer of the Borrower,
which certificate shall state that said financial statements fairly present the
financial condition and results of operations of the Borrower, in each case in
accordance with GAAP, consistently applied, as at the end of, and for, such
period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 120 days after the end
of each fiscal year of the Borrower, statements of income, retained earnings and
cash flow of the Borrower for such fiscal year and the related balance sheet of
the Borrower as at the end of such fiscal year, setting forth in each case in
comparative form the corresponding figures for the Preceding fiscal year, and
accompanied (i) in the case of said statements and balance sheet of the
Borrower, by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall state that said financial
statements fairly present the financial condition and results of operations of
the Borrower as at the end of, and for, such fiscal year in accordance with
generally accepted accounting principles, and a certificate of such accountants
stating that, in making the examination necessary for their opinion, they
obtained no knowledge, except as specifically stated, of any Default, and (ii)
in the case of said statements and balance sheet, by a certificate of a senior
financial officer of the Borrower, which certificate
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shall state that said financial statements fairly present the financial
condition and results of operations of the Borrower, in each case in accordance
with GAAP, consistently applied, as at the end of, and for, such fiscal year;
(c) promptly upon their becoming available, copies of all registration
statements and regular periodic reports, if any, which the Borrower shall have
filed with any governmental agency in connection with this Agreement or: as
shall now or hereafter be necessary under applicable laws and regulations for
the Borrower to make and perform this Agreement and to borrow hereunder;
(d) promptly after the Borrower knows or has reason to believe that any
Default has occurred, a notice of such Default describing the same in reasonable
detail and, together with such notice or as soon thereafter as possible, a
description of the action that the Borrower has taken or proposes to take with
respect thereto; and
(e) from time to time such other information regarding the financial
condition, operations, business or prospects of the Borrower as the Bank may
reasonably request. The Borrower will furnish to the Bank, at the time it
furnishes each set of financial statements pursuant to paragraph (a) or (b)
above, a certificate of a senior financial officer of the Borrower to the effect
that no Default has occurred and is continuing (or, if any Default has occurred
and is continuing, describing the same in reasonable detail and describing the
action that the Borrower has taken or proposes to take with respect thereto).
8.02 Litigation. The Borrower will promptly give to the Bank notice of
all legal or arbitral proceedings, and of all proceedings by or before any
governmental or regulatory authority or agency, and any material development in
respect of such legal or other proceedings, affecting the Borrower or any of its
Property, except proceedings which, if adversely determined, would not have a
Material Adverse Effect.
8.03 Corporate Existence, Etc. The Borrower will:
(a) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises;
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental of regulatory authorities if failure to
comply with such requirements could have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and governmental charges
or levies imposed on it or on its income or profits or on any of its Property
prior to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained;
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(d) promptly obtain all foreign exchange control
authorizations and all such other governmental approvals and filings as shall
now or hereafter be necessary under applicable laws and regulations for the
Borrower to make and perform this Agreement and to borrow hereunder (including
any filing with the Central Bank with respect to each borrowing hereunder) and
promptly furnish copies thereof to the Bank, and promptly execute, acknowledge,
deliver, file, notarize and register at its own expense all such additional
agreements, instruments and documents, and perform such other acts, as the Bank
or its counsel may deem desirable to effectuate the purposes of this Agreement.
Without limiting the generality of the foregoing, the Borrower shall promptly
deliver to the Bank evidence in form and substance satisfactory to it that the
Borrower has filed a report with the Central Bank setting forth the amount of
each borrowing hereunder following the date thereof;
(e) maintain all of its Properties used or useful in its business in
good working order and condition, ordinary wear and tear excepted;
(f) keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP and consistently applied; and
(g) permit representatives of the Bank, during normal business hours,
to examine, copy and make extracts from its books and records, to inspect any of
its Properties, and to discuss its business and affairs with its officers, all
to the extent reasonably requested by the Bank.
8.04 Insurance. The Borrower will keep insured by financially sound and
reputable insurers all Property of a character usually insured by corporations
engaged in the same or similar business similarly situated in the Philippines
against loss or damage of the kinds and in the amounts customarily insured
against by such corporations and carry such other insurance as is usually
carried by such corporations.
8.05 Prohibition of Fundamental Changes. The Borrower will not enter
into any transaction of merger or consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution). The
Borrower will not acquire any business or Property from, or capital stock of, or
be a party to any acquisition of, any Person except for purchases of inventory
and other Property to be sold or used in the ordinary course of business. The
Borrower will not convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or a substantial part of its
business or Property, whether now owned Or hereafter acquired including
receivables and leasehold interests, but excluding (a) any inventory or other
Property sold or disposed of in the ordinary course of business and on ordinary
business terms and (b) the five lease agreements, each between Corinthian
Commercial Corporation and the Borrower, and dated, respectively, December 14,
1984 (as amended on April 28, 1992), October 1, 1990, March 12, 1992, February
28, 1995 and October 17, 1995, all relating to the use of the Borrower's plant
facility, consisting of 82,286.67 square meters, located at Sucat, Muntinlupa
City, the Philippines.
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8.06 Transactions with Affiliates. Except as expressly permitted by
this Agreement, the Borrower will not directly or indirectly: (a) transfer,
sell, lease, assign or otherwise dispose of any Property to an Affiliate; (b)
merge into or consolidate with or purchase or acquire Property from an
Affiliate; or (c) enter into any other transaction directly or indirectly with
or for the benefit of an Affiliate (including guarantees and assumptions of
obligations of an Affiliate); provided that (x) any Affiliate who is an
individual may serve as a director, officer employee of the Borrower and receive
reasonable compensation for his or her services in such capacity and (y) the
Borrower may enter into transactions (other than extensions of credit by the
Borrower to an Affiliate) providing for the leasing of Property, the rendering
or receipt of services or the purchase or sale of inventory and other Property
in the ordinary course of business if the monetary or business consideration
arising therefrom would be substantially as advantageous to the Borrower as the
monetary or business consideration which would obtain in a comparable
transaction with a Person not an Affiliate.
8.07 Use of Proceeds. The Borrower will use the proceeds of the Loans
hereunder solely to finance the expansion of the Borrower's semiconductor
assembly plant in the Philippines (in compliance with all applicable legal and
regulatory requirements); provided that the Bank shall not have any
responsibility as to the use of any of such proceeds.
8.08 Ranking. The Borrower will cause its obligations under this
Agreement to rank at all times in right of payment at least pari passu with all
its other unsecured and unsubordinated Indebtedness, whether now or hereafter
outstanding (except for such Indebtedness as is entitled to priority by
operation of law) and not create, incur, assume or suffer to exist any Lien
whatsoever on any of its Property, whether now owned or hereafter acquired,
except as otherwise agreed by the Bank; provided, however, that the Borrower
shall be permitted to assume, suffer to exist, or create Liens: (a) for taxes,
assessments or governmental charges on properties or assets of the Borrower if
the same shall not at the time be delinquent or thereafter can be paid without
penalty; (b) imposed by law, such as carriers', warehousemen's and mechanics'
liens and other similar Liens arising in are ordinary course of business in
transactions not involving borrowed money or the advance of credit if the
Borrower shall take all reasonable steps to discharge such Lien as soon as
reasonably practical; (c) arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old-age pensions, or other social
security or retirement benefits or similar legislation; (d) on Property acquired
after the date hereof, which Liens are limited to the particular properties or
assets being acquired and were in existence prior to such acquisition or which
are created at the time of purchase solely to secure the purchase price of such
properties or assets; (e) existing on the date hereof and heretofore disclosed
in writing to the Bank, provided that there shall be no renewals of such Liens
or extensions of such Liens to Property other than Property now subject to such
Liens or to secure amounts of Indebtedness greater than such amounts as exist on
the date hereof, or (f) in favor of the Bank.
8.09 No Dividends. If any Default shall occur and be continuing, the
Borrower shall not, without the consent of the Bank, declare or pay dividends or
make any distributions to its shareholders.
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8.10 Debt-Equity Ratio. The Borrower shall not permit (i) the
Debt-Equity Ratio at any time to exceed 4:1 or (ii) its debt-equity ratio
calculated in accordance with and pursuant to the rules and regulations of the
Central Bank to exceed the ratio from time to time required to be maintained by
the Borrower thereunder.
SECTION 9. EVENTS OF DEFAULT. If one or more of the following events
(herein called "Events of Default") shall occur and be continuing:
(a) The Borrower shall: (i) default in the payment of any principal of
any Loan when due (whether at stated maturity or at mandatory prepayment or
otherwise); or (ii) default in the payment of any interest on any Loan, any fee
or any other amount payable by it hereunder or under the Guarantee when due and
such default shall have continued unremedied for 2 Business Days; or
(b) The Borrower or the Guarantor shall default in the payment when due
of any principal of or interest on any of its other Indebtedness aggregating (i)
in the case of the Borrower, U.S.$200,000 or more, and (ii) in the case of the
Guarantor, U.S.$1,000,000 or more; or any event specified in any note,
agreement, indenture or other document evidencing or relating to any such
Indebtedness shall occur if the effect of such event is to cause, or (with the
giving of any notice or the lapse of time or both) to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, such Indebtedness to become due, or to be prepaid in full
(whether by redemption, purchase, offer to purchase or otherwise), prior to its
stated maturity; or
(c) Any representation, warranty or certification made or deemed made
herein or in the Guarantee (or in any modification or supplement hereto or
thereto) by the Borrower or the Guarantor, or any certificate furnished to the
Bank pursuant to the provisions hereof or thereof, shall prove to have been
false or misleading as of the time made or furnished in any material respect; or
(d) The Borrower shall default in the performance of any of its
obligations under Section 8.01(d) or 8.05; the Guarantor shall default in the
performance of any of its payment obligations under the Guarantee; or the
Borrower or the Guarantor shall default in the of any of its other obligations
(other than those referred to elsewhere in this Section 9) in this Agreement or
the Guarantee, as the case may be, and such default shall continue for a period
of 30 days after notice thereof to the Borrower or the Guarantor, as the case
may be, by the Bank; or
(e) The Borrower or the Guarantor shall admit in writing its inability
to, or be generally unable to, pay its debts as such debts become due; or
(f) The Borrower or the Guarantor shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
examiner or
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liquidator of itself or of all or a substantial part of its Property, (ii) make
a general assignment for the benefit of its creditors, (iii) commence a
voluntary, case under the relevant bankruptcy law of any jurisdiction, (iv) file
a petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding-up,
or composition or readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the relevant bankruptcy law of any jurisdiction or
(vi) take any corporate action for the purpose of effecting any of the
foregoing; or
(g) A proceeding or case shall be commenced, without the application or
consent of the Borrower or the Guarantor, in any court of competent
jurisdiction, seeking (i) its reorganization, liquidation, dissolution,
arrangement or winding-up, or the composition or readjustment of its debts, (ii)
the appointment of a receiver, custodian, trustee, examiner, liquidator or the
like of the Borrower or the Guarantor, as the case may be, or any substantial
part of its Property, or (iii) similar relief in respect of the Borrower or the
Guarantor, as the case may be, under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 30 or more days; or an order for relief
against the Borrower or the Guarantor, as the case may be, shall be entered in
an involuntary case under the relevant bankruptcy law; or
(h) Any governmental authority shall take any action to condemn, seize
or appropriate any material portion of the Borrower's or the Guarantor's assets
(whether with or without payment of compensation) or to declare a moratorium on
the payment of any class of obligations including the obligations owed to the
Bank hereunder, or shall have taken any other action that, in the opinion of the
Bank, materially adversely affects the Borrower's or the Guarantor's ability to
perform its respective obligations hereunder or under the Guarantee, as the case
may be; or
(i) A final judgment or judgments for payment of money in excess of
U.S.$500,000 in aggregate shall be rendered by a court or courts against the
Borrower and/or the Guarantor and the same shall not be disclosed (or provision
shall not be made for such discharge), or a stay of execution thereof shall not
be procured, within 30 days after the date of entry thereof, and the Borrower or
the Guarantor, as the case may be, shall not within said period of 30 days, or
such longer period during which the execution thereof shall have been stayed,
appeal time from and cause the execution thereof to be stayed during such
appeal; or
(j) There shall occur a disturbance in the financial markets or any
other adverse change of circumstances of any kind (including a material adverse
change in the operations, business, assets, structure, control or financial
condition of the Borrower or the Guarantor) that shall, in the opinion of the
Bank imperil or preclude the fulfillment of the obligations of the Borrower
hereunder or of the Guarantor under the Guarantee; or
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25
(k) The Guarantor shall cease to own collectively, beneficially and of
record, at least 40% of the subscribed and issued common shares of, or shall
cease to control the management of, the Borrower; or
(l) Except for expiration in accordance with its terms, the Guarantee
shall be terminated or shall cease to be in full force and effect, for whatever
reason or the Guarantor shall purport to repudiate the Guarantee;
THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (f), (g) or (h) of this Section 9 with respect to the Borrower or the
Guarantor, the Bank may, by notice to the Borrower, terminate the Commitment
and/or declare the principal amount then outstanding of, and the accrued
interest on, the Loans and all other amounts payable by the Borrower hereunder
(including any amounts payable under Section 5.04 hereof) to be forthwith due
and payable, whereupon such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Borrower; and (2) in the case of the occurrence
of an Event of Default referred to in clause (f), (g) or (h) of this Section 9
with respect to the Borrower, the Commitment shall automatically be terminated
and the principal amount then outstanding of, and the accrued interest on, the
Loans and all other amounts payable by the Borrower hereunder (including any
amounts payable under Section 5.04 hereof) shall automatically become
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower.
SECTION 10. MISCELLANEOUS
10.01 Waiver. No failure on the part of the Bank to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
10.02 Language; Notices. All notices, communications, instruments,
evidences, reports, opinions and other documents given hereunder (including any
modifications of, or waivers or consents under, this Agreement), unless
submitted in the English language, shall be accompanied by an English
translation for each copy of the foregoing so given. All notices, requests and
other communications provided for herein (including any modifications of, or
waivers or consents under, this Agreement) shall be given or made in writing
(including by telex or telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof);
or, as to any party, at such other address as shall be designated by such party
in a notice to each other party. Except as otherwise provided in this Agreement
all such communications shall be deemed to have been duly given when transmitted
by telex or telecopier (provided such transmission by telecopy is accompanied by
or generates
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26
a simultaneous confirmation of transmission) or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
10.03 Expenses, Etc. The Borrower agrees to pay or reimburse the Bank
for paying: (a) all reasonable out-of-pocket costs and expenses of the Bank
(including the reasonable fees and expenses of Milbank, Tweed, Xxxxxx & XxXxxx,
special New York counsel to the Bank, of Xxx & Xxxxx, special Korean counsel to
the Bank, and of Puno & Puno, special Philippine counsel to the Bank), in
connection with (i) the negotiation, preparation, execution and delivery of this
Agreement and the Guarantee and the making of the Loans hereunder and (ii) any
modification, supplement or waiver of any of the terms of this Agreement or the
Guarantee; (b) all reasonable costs and expenses of the Bank (including
reasonable counsels' fees) in connection with (i) any Default and any
enforcement or collection proceedings resulting therefrom or in connection with
the negotiation of any restructuring (whether or not consummated) of the
obligations of the Borrower hereunder and (ii) the enforcement of this Section
10.03; and (c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or the Guarantee or any other document referred to
herein or therein. The Borrower agrees to pay, or reimburse each Participant (as
defined in Section 10.06(c) hereof) that shall have become a Participant on or
prior to the Closing Date for paying, all reasonable out-of-pocket costs and
expenses of such Participant (including all reasonable fees and expenses of
legal counsel, if any) in connection with the negotiation, preparation,
execution and delivery of the participation agreement relating hereto to which
such Participant is party.
The Borrower hereby agrees (i) to indemnify the Bank and its respective
directors, officers employees, attorneys and agents from, and hold each of them
harmless against, any and all losses, liabilities, claims, damages or expenses
incurred by any of them (whether or not the Bank is a party thereto) arising out
of or by reason of any investigation or litigation or other proceedings
(including any threatened investigation or litigation or other proceedings)
relating to the extensions of credit hereunder or any actual or proposed use by
the Borrower of the proceeds of any of the extensions of credit hereunder,
including, the reasonable fees and disbursements, of counsel incurred in
connection with any such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified) and (ii) not to assert any claim against the Bank, any of its
affiliates, or any of their respective directors, officers, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to any of the transactions
contemplated herein or in the Guarantee.
10.04 Amendments, Etc. Except as otherwise expressly provided in this
Agreement, any provision of this Agreement may be modified or supplemented only
by an instrument in writing signed by the Borrower and the Bank.
10.05 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
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27
10.06 Assignments and Participations.
(a) The Borrower may not assign any of its rights or obligations
hereunder without the prior consent of the Bank.
(b) The Bank may assign any, of the Loans and the Commitment with a
prior written notice to the Borrower (and, in the case of the outstanding
Commitment with the consent of the Borrower). Upon execution and delivery by the
assignee to the Borrower and the Bank of an instrument in writing pursuant to
which such assignee agrees to become a "Bank" hereunder having the Commitment
and Loans specified in such instrument, and upon consent thereto by the Borrower
and the Bank, to the extent required above, the assignee shall have, to the
extent of such assignment (unless otherwise provided in such assignment with the
consent of the Borrower), the obligations, rights and benefits of the Bank
hereunder holding the Commitment and Loans (or portions thereof) assigned to it
and the Bank shall, to the extent of such assignment, be released from the
Commitment (or portion thereof) so assigned.
(c) The Bank may sell or agree to sell to one or more other Persons a
participation in all or any part of the Loans held by it, or of the Commitment,
in which event each purchaser of a participation (a "Participant") shall be
entitled to the rights and benefits of the provision of (x) Sections 8.01(e)
hereof, (y) in the case only of any Participant that shall have become a
Participant on or prior to the Closing Date, Sections 5 and 10.03 hereof to the
fullest extent thereof and (z) in the case of each other Participant, Section 5
hereof, but only to the extent of said rights and benefits that could have been
claimed by the Bank granting the relevant participation to such Participant in
the absence of such participation, with respect to its participation in such
Loans and Commitment as if (and the Borrower shall be directly obligated to such
Participant under such provisions as if) such Participant were a "Bank" for
purposes of said Sections, but shall not have any other rights or benefits under
this Agreement of the Guarantee (the Participant's rights against the Bank with
respect of such participation to be those set forth in the agreements executed
by the Bank with the Participant or Participants).
(d) The Bank may furnish any information concerning the Guarantor in
the possession of the Bank from time to time to assignees and Participants
(including prospective assignees and Participants).
10.07 Survival. The obligations of the Borrower under Sections 5.01 and
10.03 hereof shall survive the repayment of the Loans and the termination of the
Commitment. In addition, each representation and warranty made, or deemed, to be
made by a notice of any Loan, herein or pursuant hereto shall survive the making
of such representation and warranty, and the Bank shall not be deemed to have
waived, by reason of making any Loan, any Default may arise by reason of such
representation or warranty proving to have been false or misleading,
notwithstanding that the Bank may have had notice or knowledge or reason to
believe that such representation or warranty was false or misleading at the time
such Loan was made.
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28
10.08 Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
10.09 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
10.10 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York, United States of America.
10.11 Immunity. To the extent that the Borrower may be or hereafter
become entitled, in any jurisdiction in which judicial proceedings may at any
time be commenced with respect to this Agreement, to claim for itself or its
property, assets or revenues immunity (whether by reason of sovereignty or
otherwise) from suit, jurisdiction of any court (including any court of the
United States of America, the State of New York, the Philippines or Korea),
attachment (before or after judgment), set-off, execution of a judgment or other
legal process, and to the extent that in any such jurisdiction there may be
attributed such an immunity (whether or not claimed), the Borrower hereby
irrevocably waives such immunity.
10.12 Jurisdiction, Service of Process. Any action or proceeding
against the Borrower with respect to this Agreement or any judgment entered by a
court in respect thereof may be brought in the Supreme Court of the State of New
York, County of New York or in the United States District Court for the Southern
District of New York, or in the courts of the Republic of Indonesia or Korea as
the Bank may elect, and the Borrower submits to the nonexclusive jurisdiction of
each such court for the purpose of any such action. The Borrower hereby
irrevocably designates, appoints and empowers Anam USA, Inc., located at Goshen
Corporate Park 0000, Xxxxxxxxxx Xxxxx, Xxxx Xxxxxxx, XX 00000, U.S.A., to be its
authorized agent to receive for and on its behalf and on behalf of its
properties and assets service of process in the State of New York for a period
from the date not less than 3 days prior to the Closing Date to the date 6
months after the Final Maturity Date. Such service shall be deemed completed
upon delivery thereof to the relevant process agent whether or not said agent
transmits the same to the Borrower and the Borrower agrees that the failure of
the Borrower to receive a copy of any process shall not affect in any way the
validity of such service or of any judgment based thereon. The Borrower agrees
that it will at all times maintain in New York, New York or in such other state
of the United States as the Bank shall agree an agent for service of process in
connection with any such action against the Borrower, which agent shall be
reasonably acceptable to the Bank. The Borrower irrevocably consents to the
service of process in any action in said courts by the mailing thereof by the
Bank by registered or certified mail, postage-prepaid, to the Borrower at its
address specified herein, or in any other manner permitted by law. Without
limiting the foregoing, the Borrower agrees that the Bank may at its option
submit any dispute in connection with this Agreement to any other court having
jurisdiction over the Borrower or its Property. The Borrower irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such action or
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29
proceeding brought in such a court and any claim that any such action or
proceeding brought in such a court has been brought in an inconvenient forum.
10.13 Judgment Currency. This is an international loan transaction in
which the specification of Dollars and payment in New York, New York is of the
essence, and Dollars shall be the currency of account in all events. In the
event that any payment is received by the Bank, whether pursuant to a judgment
or otherwise, in a currency other than Dollars, the Borrower hereby agrees to
indemnify the Bank against any resulting shortfall (and the Bank shall have a
separate cause of action therefor).
10.14 Waiver of Jury Trial. EACH OF THE BORROWER AND THE BANK HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
10.15 Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating the remaining provisions and without affecting the validity or
enforceability of such provisions in any other jurisdiction.
10.16 Treatment of Certain Information. The Borrower acknowledges that
from time to time financial advisory, investment banking and other services may
be offered or provided to the Borrower or the Guarantor (in connection with this
Agreement or otherwise) by the Bank or by one or more subsidiaries or affiliates
of the Bank, and the Borrower hereby authorizes the Bank to share any
information delivered to it by the Borrower or the Guarantor pursuant to this
Agreement, or in connection with the decision of the Bank to enter into this
Agreement, to any such subsidiary or affiliate.
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30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
BORROWER
AMKOR/ANAM PILIPINAS, INC.
By: /s/ (ILLEGIBLE)
------------------------------------
Name:
Title:
Address for Notices:
KM 00 Xxxx Xxxxxxx Xxxx
Xxxxx Xxxxxxxxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx
Xxxxxxxxxxx
Attention: Xx. Xxxxx X. Xxxxxxxx
Telex: 26506 AMKPH
Telecopier: (00-0) 000-0000
Telephone: (00-0) 000-0000
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31
BANK
----
Commitment THE KOREA DEVELOPMENT BANK
----------
Tranche A Tranche B
--------- ---------
U.S.$20,610,000 U.S.$50,640,000 By: /s/ (ILLEGIBLE)
-----------------------------------------
Name:
Title:
Address for Notices
and
Initial Lending Office
for Tranche A and Trance B Loans:
Head Xxxxxx
00-0, Xxxxxxxx-xxxx
Xxxxxxx-Xx
(X.X.X. Xxx 00)
Xxxxx, Xxxxx
Attention: Manager, International Loan Dept.
Telex: K26544/K27463 KODBANK
Telecopier: (000) 000-0000, 000-0000
Telephone: (000) 000-0000
34
Exhibit A
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
To: The Korea Development Bank,
as Bank
party to the Loan Agreement
referred to below
Date: [____________]
Ladies and Gentlemen:
Pursuant to the Loan Agreement dated as of March 28, 1996 ("Loan
Agreement") and made between ourselves as Borrower and yourselves as the Bank,
we hereby:
(1) Give you notice that we wish to borrow Loans (the "Loans") in the
aggregate principal amount of U.S.$_________ on _________, 199_. Such
sum is to be available to us by remitting to our account number
_________ with ___________________ for our account.
(2) Confirm and certify that (i) no Default has occurred and is continuing,
and (ii) the representations and warranties made in Section 7 of the
Loan Agreement are true and complete on and as of the date hereof, and
will be true and complete on and as of the date of the Loans, as if
made on and as of such date.
(3) Confirm that the Loans are "Loans" under the Loan Agreement and that
the Guarantor has been notified of our intent to borrow the amount set
forth herein.
Terms defined in the Loan Agreement, unless otherwise defined herein,
shall have the same meanings in this Notice.
For and on behalf of
AMKOR/ANAM PILIPINAS, INC.
By
------------------------------------
Name:
Title:
35
EXHIBIT B
[FORM OF GUARANTEE]
GUARANTEE AGREEMENT
GUARANTEE AGREEMENT dated as of March 28, 1996: between ANAM INDUSTRIAL
CO., LTD., a corporation, duly organized and validly existing under the laws of
Korea (the "Guarantor"); and THE KOREA DEVELOPMENT BANK, as the Bank party to
the Loan Agreement referred to below (in such capacity, together with its
successors, the "Bank").
Amkor/Anam Pilipinas, Inc., a Philippine corporation (the "Borrower")
and the Bank are parties to a Loan Agreement dated as of March 28, 1996 (as
modified and supplemented and in effect from time to time, the "Loan
Agreement"), providing, subject to the terms and conditions thereof, for the
making of loans by the Bank to the Borrower in an aggregate principal amount not
exceeding U.S.$71,250,000.
To induce the Bank to enter into the Loan Agreement and the Bank to
make loans thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Guarantor has
agreed to guarantee the Guaranteed Obligations (as hereinafter defined).
Accordingly, the parties hereto agree as follows:
Section 1. Definitions. Unless otherwise defined herein, terms defined
in the Loan Agreement are used herein as defined therein.
Section 2. The Guarantee.
2.01 The Guarantee. The Guarantor hereby guarantees to the Bank and its
successors and assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the principal of and interest on the
Loans made by the Bank to the Borrower and all other amounts from time to time
owing to the Bank by the Borrower under the Loan Agreement and interest thereon,
in each case strictly in accordance with the terms thereof (such obligations
being herein collectively called the "Guaranteed Obligations"). The Guarantor
hereby further agrees that if the Borrower shall fail to pay in full when due
(whether at stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Guarantor will promptly pay the same, without any demand or
notice whatsoever, and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations, the same will be promptly paid in
full when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal. This Guarantee Agreement
is a guarantee of payment and not merely of collection.
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2
2.02 Obligations Unconditional. The obligations of the Guarantor under
Section 2.01 hereof are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of the Loan Agreement or any
other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 2.02 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of the Guarantor hereunder which shall remain absolute and
unconditional as described above:
(i) at any time or from time to time, without notice to the
Guarantor, the time for any performance of or compliance with any of
the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts (including with respect to enforcement of
the Guaranteed Obligations) mentioned in any of the provisions of the
Loan Agreement or any other agreement or instrument referred to herein
or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under the Loan
Agreement or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Bank as security
for any of the Guaranteed Obligations shall fail to be perfected; or
(v) any regulatory change or other governmental action
(whether adverse or not.
No change in the name, objects, capital stock, status or constitution
of the Borrower or any merger, consolidation or corporate reorganization of the
Borrower shall in any way affect the liability of the Guarantor under this
Guarantee Agreement, and the Guaranteed Obligations shall be guaranteed by this
Guarantee Agreement notwithstanding that the obtaining of the Loans or the
incurring of any other obligations under the Loan Agreement by the Borrower
shall be in excess of the powers of the Borrower or of its officers, directors
or other agents, acting or purporting to act on its behalf, or be in any way
irregular or defective.
The Guarantor hereby expressly waives diligence, presentment, demand of
payment protest and all notices whatsoever, and any requirement that the Bank
exhaust any right,
37
3
power or remedy or proceed against the Borrower under the Loan Agreement or any
other agreement or instrument referred to herein or therein, or against any
other Person under any other guarantee of, or security for, any of the
Guaranteed Obligations.
2.03 Reinstatement. The obligations of the Guarantor under this Section
2 shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of the Borrower in respect of the Guaranteed Obligations
is rescinded or must be otherwise restored by any holder of any of the
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Guarantor agrees that it will indemnify the
Bank on demand for all reasonable costs and expenses (including fees of counsel)
incurred by the Bank in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
2.04 Subrogation. (a) The Guarantor hereby agrees that until the
payment and satisfaction in full of all Guaranteed Obligations and the
expiration or termination of the Commitment of the Bank under the Loan Agreement
it shall not exercise any right or remedy arising by reason of any performance
by it of its guarantee in Section 2.01 hereof, whether by subrogation or
otherwise, against the Borrower or any other guarantor of any of the Guaranteed
Obligations or any security for any of the Guaranteed Obligations. In the event,
that the Guarantor shall receive any payment on account of such rights of
subrogation while any portion of the Guaranteed Obligations remains outstanding,
the Guarantor agrees to pay all such amounts so received (but not in excess of
the Guaranteed Obligations then outstanding) to the Bank to be applied to the
payment of the Guaranteed Obligations and other amounts payable under the Loan
Agreement in accordance with the terms thereof.
2.05 Remedies. The Guarantor agrees that, as between the Guarantor and
the Bank, the obligations of the Borrower under the Loan Agreement may be
declared to be forthwith due and payable as provided in Section 9 of the Loan
Agreement (and shall be deemed to have become automatically due and payable in
the circumstances provided in said Section 9) for purposes of Section 2.01
hereof notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligation from becoming automatically due and payable) as
against the Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrower) shall forthwith
become due and payable by the Guarantor for purposes of said Section 2.01.
2.06 Continuing Guarantee. The guarantee in this Section 2 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
2.07 Taxes. The Guarantor covenants and agrees that, whether or not any
Loan is made under the Loan Agreement: (a) all payments by the Guarantor under
or in respect of this Guarantee Agreement, including amounts payable under
paragraph (b) of this Section 2.07, shall
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be made free and clear and without reduction by reason of any present or future
income, stamp and other taxes or charges whatsoever imposed, withheld, levied or
collected by Korea or the Philippines or any political subdivision or taxing
authority thereof on or in respect of this Guarantee Agreement or the Loans or
the registration, notarization or other formalization thereof or any payments in
respect thereof other than taxes imposed upon the respective overall net income
of the Bank by its jurisdiction of organization (each, a "Tax", and
collectively, "Taxes"), all of which will be paid by the Guarantor for its own
account, prior to the date on which penalties attach thereto; (b) the Guarantor
will indemnify the Bank against, and reimburse the Bank on demand for, any Taxes
and any interest or penalties thereon; (c) in the event that the Guarantor is
required by applicable law, decree or regulation to deduct or withhold any Taxes
from any amounts payable on, under or in respect of this Guarantee Agreement,
the Guarantor shall pay, on demand of the Bank, such additional amount or
amounts as may be required, after such deduction or withholding, to enable the
Bank to receive from the Guarantor an amount equal to the full amount payable
under this Guarantee Agreement; (d) the Guarantor shall furnish to the Bank
certified copies of satisfactory tax receipts in respect of any payment of Taxes
within 30 days after the respective due dates therefor; and (e) the covenants
and agreements of the Guarantor under this Section 2.07 shall survive the
repayment of the Loans.
2.08 Enforcement. The Guarantor agrees to pay on demand all expenses
incurred by the Bank in connection with the enforcement of this Guarantee
Agreement, including legal fees and expenses and other costs of collection.
Section 3. Representations and Warranties. The Guarantor represents and
warrants to the Bank that:
3.01 Corporate Existence. The guarantor: (a) is a corporation duty
organized and validly existing under the laws of Korea; (b) has all requisite
corporate power, and has all material governmental licenses, authorizations,
conscripts, and approvals necessary to own its assets and carry on its business
as now being or as proposed to be conducted; and (c) is qualified to do business
in all jurisdictions in which the nature of the business conducted by it makes
such qualification necessary and where failure so to qualify would have a
material adverse effect on the consolidated financial condition, operations,
business or prospects taken as a whole of the Guarantor.
3.02 Financial Condition. The Guarantor has heretofore furnished to the
Bank the balance sheet of the Guarantor as at December 31, 1995 and the related
statements of income, retained earnings and cash flow of the Guarantor for the
fiscal year ended on said date, with the opinion thereon of Shinhan Accounting
Corporation, certified public accountants. All such financial statements are
complete and correct and fairly present the financial condition of the Guarantor
as at said date and the results of their operations for the fiscal year ended on
said date, all in accordance with generally accepted accounting principles and
practices in Korea applied on a consistent basis. The Guarantor has on the date
hereof no material contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses
39
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from any unfavorable commitments, except as referred to or reflected or provided
for in said balance sheet as at said date. Since December 31, 1995, there has
been no material adverse change in the financial condition, operations, business
or prospects taken as a whole of the Guarantor from that set forth in said
financial statements as at said date.
3.03 Litigation. Except as disclosed to the Bank in writing prior to
the date of this Guarantee Agreement, there are no legal or arbitral proceedings
or any proceedings by or before any governmental or regulatory authority or
agency, now pending or (to the knowledge of the Guarantor) threatened against
the Guarantor which, if adversely determined, could have a material adverse
effect on the financial condition, operations, business or prospects taken as a
whole of the Guarantor.
3.04 No Breach. None of the execution and delivery of this Guarantee
Agreement, the consummation of the transactions herein contemplated or
compliance with the terms and provisions hereof will conflict with or result in
a breach of, or require any consent under, the articles of incorporation of the
Guarantor, or any applicable law or regulation, or any order, writ, injunction
or decree of any court or governmental authority or agency, or any agreement or
instrument to which the Guarantor is a party or by which it is bound or to which
it is subject, or constitute a default under any such agreement or instrument,
or result in the creation or imposition of any Lien upon any of the revenues or
assets of the Guarantor pursuant to the terms of any such agreement or
instrument.
3.05 Corporate Action. The Guarantor has all necessary corporate power
and authority to execute, deliver and perform its obligations under this
Guarantee Agreement; the execution, delivery and performance by the Guarantor of
this Guarantee Agreement have been duly authorized by all necessary corporate
action on its part; and this Guarantee Agreement has been duly and validly
executed and delivered by the Guarantor and constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms.
3.06 Approvals. All authorizations, approvals or consents of, and
filings and registrations with, any governmental or regulatory authority or
agency (including all foreign exchange approvals) that are necessary for the
execution, delivery or performance by the Guarantor of this Guarantee Agreement
or for the validity or enforceability hereof have been obtained or made and are
in full force and effect, except that a separate foreign exchange validation of
the Guarantor's Class A foreign exchange trading bank will be required at the
time of each payment in respect of this Guarantee Agreement.
3.07 Taxes. The Guarantor has filed all income tax returns and all
other material tax returns which are required to be filed by the Guarantor and
has paid all taxes due pursuant to such returns or pursuant to any assessment
received by the Guarantor. The charges, accruals and reserves on the books of
the Guarantor in respect of taxes and other governmental charges are, in the
opinion of the Guarantor, adequate.
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3.08 Ranking. The obligations of the Guarantor under this Guarantee
Agreement rank at least pari passu with all other unsecured Indebtedness of the
Guarantor.
3.09 Sovereign Immunity. The execution, delivery and performance of
this Guarantee Agreement by the Guarantor constitute private and commercial acts
rather than governmental or public acts; and the Guarantor is not entitled to
claim immunity from legal proceedings with respect to itself or any of its
properties or assets on the grounds of sovereignty or otherwise under any law or
in any jurisdiction where an action may be brought for the enforcement of its
obligations hereunder or the attachment of property or the execution of any
judgment with respect thereto; and to the extent that the Guarantor or any of
its properties or assets may hereafter acquire such right of immunity the same
is hereby irrevocably waived by the Guarantor.
3.10 Ownership of Borrower. The Guarantor owns at least 40% of the
subscribed and issued common shares of, and controls the management of, the
Borrower.
Section 4. Covenants. The Guarantor agrees that, until the payment and
satisfaction in full of the Guaranteed Obligations and the expiration or
termination of the Commitment of the Bank under the Loan Agreement:
4.01 Financial Statements The Guarantor shall deliver to the Bank:
(a) as soon as available and in any event within 60 days after
the end of each semi-annual fiscal period of each fiscal year of the
Guarantor, statements of income of the Guarantor for such period and
for the period from the beginning of the respective fiscal year to the
end of such period, and the related balance sheet of the Guarantor as
at the end of such period, setting forth in each case in comparative
form the corresponding figures for the corresponding period in the
preceding fiscal year, accompanied by a certificate of a senior
financial officer of the Guarantor, which certificate shall state that
said financial statements fairly present the financial condition and
results of operations of the Guarantor, in accordance with generally
accepted accounting principles in Korea, consistently applied, as at
the end of, and for such period (subject to normal year-end audit
adjustments);
(b) as soon as available and in any event within 120 days
after the end of each fiscal year of the Guarantor, statement of
income, retained earnings and cash flow of the Guarantor for such
fiscal year and the related balance sheet of the Guarantor as at the
end of such fiscal year, setting forth in each case in comparative form
the corresponding figures for the preceding fiscal year, and
accompanied by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state
that said financial statements fairly present the financial condition
and results of operations of the Guarantor as at the end of, and for,
such fiscal year in accordance with generally accepted accounting
principles in Korea, and a certificate of such
41
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accountants stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically stated, of
any Default;
(c) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which the
Guarantor shall have filed with any governmental agency or any national
securities exchange;
(d) promptly after the Guarantor knows or has reason to
believe that any Default has occurred, a notice of such Default
describing the same in reasonable detail and, together with such notice
or as soon thereafter as possible, a description of the action that the
Guarantor has taken or proposes to take with respect thereto; and
(e) from time to time such other information regarding the
financial condition, operations, business or prospects of the Guarantor
as the Bank may reasonably request.
The Guarantor will furnish to each Bank, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate of a
senior financial officer of the Guarantor to the effect that no Default has
occurred and is continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the action that the
Guarantor has taken or proposes to take with respect thereto).
4.02 Litigation. The Guarantor will promptly give to the Bank notice of
all legal or arbitral proceedings, and of all proceedings by or before any
governmental or regulatory authority or agency, affecting the Guarantor, except
proceedings which, if adversely determined, would not have a material adverse
effect on the financial condition, operations, business or prospects taken as a
whole of the Guarantor or its ability to perform its obligations hereunder.
4.03 Corporate Existence, Etc. The Guarantor will: preserve and
maintain its corporate existence and all of its material rights, privileges and
franchises; comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if failure to
comply with such requirements would materially and adversely affect the
financial condition, operations, business or prospects taken as a whole of the
Guarantor; pay and discharge all taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of its property prior
to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained; maintain all of its properties used or useful in its business in
good working order and condition, ordinary wear and tear excepted; permit
representatives of the Bank, during normal business hours, to examine, copy and
make extracts from its books and records, to inspect its properties, and to
discuss its business and, affairs with its officers, all to the extent
reasonably requested by the Bank; and keep insured by financially sound and
reputable insurers all property of a character usually insured by corporations,
engaged in the same or similar business similarly situated against loss or
damage of the kinds and in the amounts customarily insured against by such
corporations and carry such other insurance as is usually carried by such
corporations.
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4.04 Authorizations. The Guarantor will promptly obtain all exchange
control authorizations and all such other governmental approvals, filings and
reports (including any filings or periodic reports required under the Foreign
Exchange Management Act of Korea and regulations promulgated thereunder or
pursuant thereto) as shall now or hereafter be necessary under applicable laws
and regulations for the Guarantor to make and perform this Guarantee Agreement
and will promptly furnish copies thereof to the Bank.
4.05 Merger; Disposition of Assets. The Guarantor shall not consolidate
with or merge into any other corporation or entity, nor shall dispose of
(whether in one transaction or in a series of transactions) all or any
substantial part of its property, whether now owned or hereafter acquired
(excluding any inventory or other assets sold or disposed of in the ordinary
course of business), provided that the Guarantor may merge or consolidate with
any other Person if the Guarantor is the surviving or succeeding entity, and
such merger or consolidation will not have a materially adverse effect (in the
reasonable opinion of the Bank) on the Guarantor's ability to perform its
obligations hereunder.
4.06 Ranking. The Guarantor will cause its obligations under this
Guarantee Agreement to rank at all times in right of payment at least pari passu
with all other unsecured and unsubordinated Indebtedness of the Guarantor,
whether now or hereafter outstanding (except for Liens created by operation of
law), and will not create, incur, assume or suffer to exist any Lien whatsoever
on any of its Property, whether now owned or hereafter acquired, except Liens to
secure any credit facility in existence on the date of the Loan Agreement which
by the terms of such credit facility requires the creation of such Lien as a
condition to the advance of credit and except as otherwise agreed by the Bank;
provided, however, that the Guarantor shall be permitted to assume or create
Liens: (i) for taxes, assessments or governmental charges on properties or
assets of the Guarantor if the same shall not at the time be delinquent or
thereafter can be paid without penalty; (ii) imposed by law, such as carriers',
warehousemen's and mechanics' liens, Liens arising from employees' claims for
wages and severance payments and other similar Liens arising in the ordinary
course of business in a transaction not involving borrowed money or. the advance
of credit if the Guarantor shall take all reasonable steps to discharge such
Lien as soon as reasonably practical; (iii) arising out of pledges or deposits
under worker's compensation laws, unemployment insurance, old-age pensions, or
other social security or retirement benefits or similar legislation; (iv) on
Properties or assets acquired after the date hereof, which Liens are limited to
the particular Properties or assets, being acquired and were in existence prior
to such acquisition or which are created at the time of purchase solely to
secure the purchase price of such Properties or assets; (v) existing on the date
hereof and disclosed in the financial statements referred to in Section 3.02
hereof or otherwise heretofore disclosed in writing to the Bank, provided that
there shall be no renewals of such Liens or extensions of such Liens to Property
other, than Property now subject to such Liens or to secure amounts of
Indebtedness greater than such amounts as exist on the date hereof; (vi) over
any assets in Korea in favor of a bank or other financial institution securing
any credit facility granted to the Guarantor or any of its subsidiaries or
affiliates, by such bank or other financial institution through a lending office
in Korea, (vii) arising in the ordinary course of business with respect to the
Guarantor's obligations under, or in connection with, any accounts receivable or
inventory
43
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financing and securing Indebtedness not exceeding U.S.$20,000,000 at any one
time; and (viii) in favor of the Bank.
4.07 Ownership of Borrower and Dividends. The Guarantor shall ensure
that it own and maintain at least 40% of the subscribed and issued common shares
of, and control the management of, the Borrower, and that, if any Default shall
occur and be continuing, the Borrower shall not declare or pay dividends or make
any distributions to its shareholders.
4.08 Debt-Equity Ratio. The Guarantor shall not permit the Debt-Equity
Ratio (as defined in the following sentence) to exceed 6:1 at any time.
"Debt-Equity Ratio" shall mean, at any time, the ratio of total liabilities to
total equity of the Guarantor and "total liabilities" and "total equity", as
used herein, shall have the respective meanings assigned to such term under
generally accepted accounting principles in Korea applied on a basis consistent
with those used in the preparation of the financial statements referred to in
Section 4.01.
Section 5. Miscellaneous.
5.01 No Waiver. No failure on the Part of the Bank or any of its agents
to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Bank or any of its
agents of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.
5.02 Governing Law. This Guarantee Agreement shall be governed by, and
construed in accordance with, the law of the State of New York, United States of
America.
5.03 Notice. All notice requests, consents and demands hereunder shall
be in writing and telexed, telecopied or delivered to the intended recipient at
the "Address for Notices" specified beneath its name on the signature pages
hereof or, as to any party, at such other address as shall be designated by such
party in a notice to each other party. Except as otherwise provided in this
Guarantee Agreement, all such communications shall be deemed to have been duly
given when transmitted by telex or telecopier (provided such transmission by
telecopy is accompanied by or generates a simultaneous confirmation of
transmission) or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
5.04 Amendments, Waivers, Etc. The terms of this Guarantee Agreement
may be waived, altered or amended only by an instrument in writing duly executed
by the Guarantor and the Bank. Any such amendment or waiver shall be binding
upon the Bank, each holder of any of the Guaranteed Obligations and the
Guarantor.
5.05 Successors and Assigns. This Guarantee Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Guarantor, the Bank and
44
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each holder of any of the Guaranteed Obligations (provided, however, that the
Guarantor shall not assign or transfer its rights or obligations hereunder
without the prior written consent of the Bank).
5.06 Counterparts. This Guarantee Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Guarantee
Agreement by signing any such counterpart.
5.07 Severability. If any provision hereof is invalid and unenforceable
in any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Bank in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
5.08 Stamp Tax, Etc. The Guarantor agrees to pay all stamp and other
duties and taxes imposed by any taxing authority on this Guarantee Agreement and
shall indemnify the Bank against all liabilities, costs, claims and expenses
resulting from any omission to pay or delay in paying any such duty or tax.
5.09 Jurisdiction; Service of Process. Any action or proceeding against
the Guarantor with respect to this Guarantee Agreement or any judgment entered
by a court in respect thereof may be brought in any court of or in the State of
New York, Singapore or Korea as the Bank in its sole discretion may elect, and
the Guarantor submits to the non-exclusive jurisdiction of each such court for
the purpose of any such action. The Guarantor hereby irrevocably designates,
appoints and empowers Anam USA, Inc., located at Goshen Corporate Park 0000,
Xxxxxxxxxx Xxxxx, Xxxx Xxxxxxx, XX 00000, U.S.A., as its authorized agent to
receive for and on its behalf and on behalf of its properties and assets service
of process in the State of New York. Such service shall be deemed completed upon
delivery thereof to the relevant process agent whether or not said agent
transmits the same to the Guarantor and the Guarantor agrees that the failure of
the Guarantor to receive a copy of any process shall not affect in any way the
validity of such service or of any judgment based thereon. The Guarantor agrees
that it will at all times maintain in New York, New York or in such other state
of the United States as the Bank shall agree an agent for service of process in
connection with any such action against the Guarantor, which agent shall be
reasonably acceptable to the Bank. The Guarantor irrevocably consents to the
service of process in any action in said courts by the mailing thereof by the
Bank by registered or certified mail, postage prepaid, to the Guarantor at its
address specified herein, or in any other manner permitted by law. Without
limiting the foregoing, the Guarantor agrees that the Bank may at its option
submit any dispute in connection with this Guarantee Agreement to any other
court having jurisdiction over the Guarantor or the Guarantor's property. The
Guarantor irrevocably waives any objection which it may now or hereafter have to
any such action relating to this Guarantee Agreement on the ground of improper
venue or inconvenient forum.
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5.10 Judgment Currency. This is a guaranty of an international loan
transaction in which the specification of Dollars and payment in New York, New
York are of the essence, and Dollars shall be the currency of account in all
events. In the event that any payment is received by the Bank hereunder, whether
pursuant to a judgment or otherwise, in a currency other than Dollars, the
Guarantor hereby agrees to indemnify the Bank, against any resulting shortfall
(and the Bank shall have a separate cause of action therefor).
5.11 Set-Off. The Guarantor expressly agrees that the Bank may at any
time set off or apply any and all deposits by the Guarantor with such Person or
any of its branches or affiliates (whether general or special, time or demand,
matured or unmatured, in whatever currency) against any amount or amounts due
and unpaid by the Guarantor under this Guarantee Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Guarantee
Agreement to be duly executed and delivered as of the day and year first above
written.
ANAM INDUSTRIAL CO., LTD.
By:
---------------------------------
Name:
Title:
Address for Notices:
000-0, 0-xx
Xxxxxx-xxxx
Xxxxxxxx-xx
Xxxxx
Xxxxx
Attention: Xx. X.X. Xxx
Telex: K27381, K26540
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
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THE KOREA DEVELOPMENT BANK
as Bank
By:
-------------------------------------------
Name:
Title:
Head Xxxxxx
00-0, Xxxxxxxx-xxxx
Xxxxxxx-xx
(X.X.X. Xxx 00)
Xxxxx, Xxxxx
Attention: Manager, International Loan Dept.
Telex: K26544/K27463 KODBANK
Telecopier: (000) 000-0000, 000-0000
Telephone: (000) 000-0000
00
Xxxxxxx X
[XXXX XX XXXXXXX XX XXXXXXXXXX COUNSEL THE BANK]
____________, 1996
To: The Korea Development Bank
as Bank
party to the Loan Agreement
referred to below
Ladies and Gentlemen:
We have been requested to issue to you this opinion as your special
Philippine counsel in connection with the Loan Agreement dated as of March 28,
1996 (the "Loan Agreement") between Amkor/Anam Pilipinas, Inc. (the "Borrower")
and The Korea Development Bank as Bank, providing for the making of loans by the
Bank to the Borrower in an aggregate principal amount not exceeding
U.S.$71,250,000.00. This opinion is delivered to you pursuant to Section 6.01(d)
of the Loan Agreement. Terms defined in the Loan Agreement have their respective
defined meanings when used herein.
In connection therewith, we have examined the Constitution, laws and
regulations of the Republic of the Philippines and the following documents:
(a) a copy of the executed Loan Agreement;
(b) a copy of the executed Guarantee;
(c) Certified True Copies of the Articles of Incorporation and
By-Laws of the Borrower;
(d) an original of the Secretary's Certificate dated 15 March 1996
containing the Board Resolutions adopted during, the meeting
of the Board of Directors of the Borrower authorizing the
execution, delivery with, performance of the Loan Agreement;
(e) Certified True Copies of various General Information Sheets
filed with the Securities and Exchange Commission (SEC) for
the Fiscal Years Ending July 2, 1995, December 24,1994,
December 26,1993, December 27, 1992, December 29, 1991 and
December 30, 1990;
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(f) Environmental Compliance Certificate issued by the Department
of Environmental and Natural Resources (DENR);
(g) Certified True Copy of the Certificate of Registration No. EP
94-061 issued by the Board of Investments on 23 March 1994,
certifying that the Board has duly registered Amkor/Anam
Pilipinas, Inc. in accordance with the provisions of the
Omnibus Investments Code of 1987, together with the General
Terms and Conditions for registration and the Annual/Semestral
Report On Actual Operations for the year starting January 1,
1995 to December 31, 1995;
(h) Certified True Copy of the Mayor's Permit & Business License
issued by the City of Muntinlupa, effective up to December 31,
1996;
(i) Certified True Copy of the Certificate of Registration of
Business Name issued by the Department of Trade and Industry,
effective up to June 25, 1999;
(j) Certified True Copy of the Certificate of Accreditation issued
by the Bureau of Export Trade Promotion with Accreditation No.
BOI-95-0104, certifying that the corporation is an eligible
exporter satisfying the requirements of Republic Act No. 7844,
otherwise known as the Export Development Act, and its
implementing rules and regulations, which Certificate is valid
until 18 August, 1996;
(k) a copy of an executed U.S.$50,000,000.00 Loan Agreement dated
as of September 7, 1995 between Amkor/Anam Pilipinas, Inc., as
Borrower, The Korea Development Bank, as Lender and KDB Asia
Limited, as Agent;
(l) a copy of an executed U.S.$40,000,000.00 Guaranteed Floating
Rate Notes due February 2000 of Amkor/Anam Pilipinas, Inc.
guaranteed by Anam Industrial Co., Ltd.;
(m) a copy of an executed Mortgage Trust Indenture dated July 29,
1992 between Amkor/Anam Pilipinas, Inc. and PCIBank - Trust
Services, as Trustee;
(n) a copy of a Real Estate Mortgage executed by IMI Realty, Inc.
to secure a U.S.$5,000,000.00 loan granted by Bank of the
Philippine Islands in favor of Amkor/Anam Pilipinas, Inc.;
(o) Certified True Copies of pleadings, judgments and/or decisions
or documents relative to any cases filed or threatened in any
court, tribunal or arbitral body or quasi-judicial body in the
Philippines;
(p) Certified True Copy of a letter from the Central Bank of the
Philippines approving the loan and containing the various
conditions for such approval.
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In the examination of the documents made available to us, we have
assumed the genuineness of all signatures and the authenticity of all documents
submitted to us as originals, and the accurate conformity with the originals of
all documents submitted to us as copies or and we have found nothing to indicate
that such assumptions are not fully justified. As to any other matters of fact
material to the opinions expressed herein, we have relied upon certificates or
statements of officers and other representatives of the Borrower.
Based upon the foregoing, and subject to the qualifications set forth
below, and having due regard to such legal considerations as we deem relevant,
we are of the opinion that:
1. The Borrower is a corporation duly organized and validly existing
under the laws of the Philippines and has full power and authority to own
property and assets, to carry on business as now being conducted, and to enter
into and perform the Loan Agreement.
In this connection, we have examined the following documents furnished
to us by Amkor/Anam Pilipinas, Inc., to wit:
a. Certified true copy of a Certification dated 28 February 1996
issued by the Director of the Administrative and Finance
Department of the Securities and Exchange Commission (SEC),
certifying that the Borrower has not been dissolved by action
of its stockholders and that the SEC has not received any
information derogatory to the good standing of the Borrower in
the Philippines which would prevent it from conducting its
normal corporate franchise;
b. Certified true copy of the Articles of Incorporation of
Advanced Micro Devices (Philippines) Inc. dated 16 August 1976
which was subsequently amended to change the name of the
Borrower to Amkor/Anam Pilipinas, Inc.;
c. Certified true copies of two (2) separate Certificates issued
by the SEC of the Filing of Amended Articles of Incorporation
and the Filing of By-Laws of Amkor/Anam Philipinas, Inc.
(formerly: Advanced Micro Devices (Philippines, Inc.) both
dated 31 May 1989 whereby Article 1 of the Articles of
Incorporation (Name of the Corporation) was amended, and
photocopies of the Amended Articles of Incorporation and
By-Laws attached to the said Certificates;
d. Certified true copy of the Certificate of Filing of
Certificate of Increase of Capital Stock dated 22 March 1991
issued by the SEC;
e. Certified, true copy of the Certificate of Filing of Amended
Articles of incorporation dated 30 September 1993 whereby
Article VII of the Articles of Incorporation was amended to
increase the authorized capital stock of the Borrower to
P93,500,000.00, and photocopies of the Amended Articles of
incorporation and By-Laws;
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f. Certified true copy of the Certificate of Amendment of
Articles of Incorporation and By-Laws dated 25 August 1995,
certifying, among others, that the authorized capital stock of
the Borrower was increased to P153,500,000.00, and photocopies
of the Amended Articles and By-Laws;
g. Certified true copies of various General Information Sheets
filed with the SEC for the Fiscal Years Ending July 2, 1995,
December 24, 1994, December 26, 1993, December 27, 1992,
December 29, 1991 and December 30, 1990;
h. Certified true copy of the Certificate of Registration No. EP
94-061 issued by the Board of Investments on 23 March 1994,
certifying that the Board has duly registered Amkor/Anam
Pilipinas, Inc. in accordance with the provisions of the
Omnibus Investments Code of 1987, together with the General
Terms and Conditions for registration and the Annual/Semestral
Report On Actual Operations for the year starting January 1,
1995 to December 31, 1995;
i. Certified true copy of the Mayor's Permit & Business License
issued by the City of Muntinlupa, effective up to December 31,
1996;
j. Certified true copy of the Certificate of Registration of
Business Name issued by the Department of Trade and Industry,
effective up to June 25, 1909; and
k. Certified true copy of Certificate of Accreditation issued by
the Bureau of Export Trade Promotion with Accreditation No.
BOI-95-0104, certifying that the Borrower is an eligible
exporter satisfying the requirements of Republic Act No. 844,
otherwise known as the Export Development Act, and its
implementing rules and regulations, which Certificate is valid
until 18 August, 1996.
2. The making and performance by the Borrower of the Loan
Agreement:
(i) have been duly authorized by all necessary corporate
and other action of the Borrower pursuant to the
Secretary's Certificate dated 15 March, 1996
containing the Board Resolutions adopted during the
meeting of the Board of Directors of the Borrower
authorizing the execution, delivery and performance
of the Loan Agreement.
(ii) do not and will not violate any provision of the
Articles of Incorporation, ByLaws, or other
equivalent documents, of the Borrower, or of
applicable laws or regulations of the Philippines, or
of any judgment, decree, order or award of any court,
regulatory body or arbitral tribunal known to us, and
(iii) do not and will not result in the breach of, or
constitute a default under or require any waiver or
consent under, any loan agreement, indenture or
52
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other agreement, instrument or document whatsoever
known to us to which the Borrower is a party or by
which it or any of its property, assets or revenues
may be bound or affected.
In regard to paragraph 2(iii) above, we have examined the following
documents furnished to us by Amkor/Anam Pilipinas, Inc., to wit:
a. U.S.$50,000,000.00 Loan Agreement dated as of September 7,
1995 between Amkor/Anam, Pilipinas, Inc., as Borrower, The
Korea Development Bank, as Lender and KDB Asia Limited, as
Agent;
b. U.S.$40,000,000.00 Guaranteed Floating Rate Notes due February
2000 of Amkor/Anam Pilipinas, Inc. guaranteed by Anam
Industrial Co., Ltd.;
c. Mortgage Trust Indenture dated July 29, 1992 between
Amkor/Anam Pilipinas, Inc. and PCIBank - Trust Services, as
Trustee; and
d. Real Estate Mortgage executed by IMI Realty, Inc. to secure a
U.S.$5,000,000.00 loan granted by Bank of the Philippine
Islands in favor of Amkor/Anam Pilipinas, Inc.
3. Assuming that the Loan Agreement is legal, valid and enforceable
(subject to customary qualifications) under the laws of the State of New York by
which it is expressed to be governed, the Loan Agreement constitutes the legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms.
4. All consents, approvals, licenses and authorizations (including any
applicable foreign exchange approvals) of, any submissions to and registrations
with, any governmental authority required under applicable laws and regulations
of the Philippines for the making and performance by the Borrower of the Loan
Agreement have been obtained or made and are in full force and effect, (except
that the Borrower is required to file a report with Bangko Sentral ng Pilipinas
setting forth the amount of each borrowing under the Loan Agreement).
5. The Loan Agreement is the direct and unconditional general
obligation of the Borrower, ranking in right of payment and collateral security
at least pari passu with all other unsecured Indebtedness of the Borrower,
except as regards statutory preferences which are applicable generally to
corporations established under Philippine law.
The Loan Agreement, being an unsecured indebtedness of the Borrower,
enjoys no preference with respect to any specific movable or immovable property
of the Borrower. However, the credit under the Loan Agreement, if appearing in a
public instrument, may fall within the purview of Article 2244 of the New Civil
Code of the Philippines, the pertinent portion of which reads:
53
6
"Act. 2244. With reference to other property, real and
personal, of the debtor, the following claims or credits shall be
preferred in t he order named:
(14) Credits which, without special privilege, appear (a) in a
public instrument; or (b) in the final judgment, if they have been the
subject of litigation. These credits shall have preference among
themselves in the order of priority of the dates of the instruments and
of the judgments, respectively."
If the indebtedness is not made to appear in a public instrument, then
it shall fall under the pertinent provision of Article 2245 of the New Civil
Code of the Philippines, to wit:
"Art. 2245. Credits of any other kind or class or by any other
right or title not comprised in the four preceding articles, shall
enjoy no preference."
In the order of preference of credits, an unsecured indebtedness which
appears in a public instrument enjoys preference over an unsecured indebtedness
which does not appear in a public instrument pursuant to Article 2251 of the New
Civil Code of the Philippines, which reads:
"Art. 2251. Those credits which do not enjoy any preference
with respect to specific property, and those which enjoy preference, as
to the amount not paid, shall be satisfied according to the following
rules:
(1) In the order established in article 2244;
(2) Common credits referred to in article 2245 shall be paid
pro rata regardless of dates."
6. To the best of our knowledge, information and belief, there is no
suit, action, tax claim or proceeding at law or in equity, now pending before
any court, governmental agency or authority or arbitral tribunal or threatened
against, or affecting the Borrower or any of its property, assets or revenues
which, if adversely determined, would materially and adversely affect the
financial condition of the Borrower or the ability of the Borrower to perform or
observe its obligations under the Loan Agreement.
7. The Borrower is subject to civil and commercial laws of the
Philippines with respect to its obligations under the Loan Agreement, and the
making and performance by the Borrower of the Loan Agreement constitute private
and commercial acts rather than governmental or public acts; and neither the
Borrower nor any of its property, assets or revenues enjoys any right of
immunity from suit, court jurisdiction, attachment prior to judgment, attachment
in aid of execution, set-off, enforcement and execution of judgments or orders,
or from any other legal process with respect to its obligations under the Loan
Agreement. The Borrower's agreement in the Loan Agreement to waive and not to
claim any immunity, to which it or any of its property, assets or revenues may
be or become entitled, is legal, valid and binding under the laws of the
Philippines.
54
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8. There is no withholding or other tax or charge applicable to any
payment to made by the Borrower pursuant to the terms of the Loan Agreement or
imposed on the Bank by virtue of the execution and delivery of the Loan
Agreement. Based on Article 11 of the "Convention Between The Republic of Korea
And The Republic of The Philippines For The Avoidance of Double Taxation And The
Prevention of Fiscal Evasion With Respect To Taxes On Income", interest payments
received by the Bank under the Loan Agreement will be exempt from Philippine
withholding tax. The Borrower's obligation under the Loan Agreement to make
payments thereunder free and clear of and without reduction by reason of Taxes,
in the event that the Philippines or any governmental sub-division thereof
should in the future impose (or, as the case may be, increase) any such tax,
withholding or charge, whether by change in law, regulation or the
interpretation thereof so that the Bank shall receive the amount due as if no
such tax, withholding or charge, whether by change in law, regulation or the
interpretation thereof so that the Bank shall receive the amount due as if no
such tax, withholding or charge had been imposed, is valid and binding on the
Borrower.
9. The Loan Agreement is subject to documentary stamp tax pursuant to
Section 173 of Republic Act No. 7660, as amended, in the amount provided in
Section 6 of Revenue Regulations No. 9-94 which is "thirty centavos (P0.30) on
each two hundred pesos, or fractional part thereof, of the face value" of the
Loan Agreement.
Other than the documentary stamp tax, no other tax is payable in
respect of the execution and delivery of the Loan Agreement.
10. Under the laws of the Philippines, the choice of New York law to
govern the validity, construction and performance of the Loan Agreement is a
valid choice.
11. The submission of the Borrower in the Loan Agreement to the
jurisdiction of the courts in the State of New York and Korea referred to
therein constitutes the legal and valid undertaking of the Borrower and does not
contravene any provision of the laws of the Philippines.
12. It is not necessary or advisable under; the laws of the
Philippines, in order to assure the validity, effectiveness and enforceability
of the Loan Agreement or any part thereof, that the Loan Agreement be registered
or recorded in any public office or agency, or that any other instrument-
relating thereto be executed, delivered, registered or recorded in the
Philippines.
13. It is not necessary under the laws of the Philippines, in order to
enable the Bank or any of its successors or assigns to enforce its rights under
the Loan Agreement, that any such Person should be licensed, qualified or
otherwise entitled to carry on business in the Philippines.
14. Neither the Bank nor any of its successors or assigns are or will
be deemed to be resident, domiciled or carrying on business in the Philippines
by reason of the execution, delivery, performance and/or enforcement of the Loan
Agreement.
Our opinions expressed herein are subject to the following reservations
and qualifications:
55
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A. The binding effect and/or enforceability of the obligations of
the Loan Agreement may be limited or affected by the
bankruptcy, insolvency, liquidation, reorganization or
reconstruction of the Borrower pursuant to the current laws
and regulations of the Philippines which affect the validity
and enforcement of creditors' rights generally; and
B. Nothing in this letter/opinion should be taken as indicating
that the remedies of specific performance or injunction (being
in some instances discretionary remedies of the court) would
necessarily or readily be available with respect to any
particular provision of the Loan Agreement in any particular
instance.
We express no opinion as to any law other than the laws of the
Philippines as in effect on the date hereof. This opinion is directly addressed
to you and may be relied upon and availed of only by you and your counsel.
Very truly yours,
PUNO AND PUNO
By:
XXXXX X. XXXX
56
EXHIBIT D
[FORM OF OPINION OF SPECIAL KOREAN COUNSEL TO THE BANK]
________________, 1996
To: The Korea Development Bank,
as Bank
party to the Loan Agreement
referred to below
Ladies and Gentlemen:
We have acted as your special Korean counsel in connection with the
Guarantee Agreement dated as of March 28, 1996 (the"'Guarantee") between Anam
Industrial Co., Ltd. (the "Guarantor") and the Bank (as defined below) relating
to the Loan Agreement dated as of March 28, 1996 (the "Loan Agreement") between
Amkor/Anam Pilipinas, Inc. (the "Borrower") and The Korea Development Bank, as
Bank (the "Bank"), providing for the making of loans by the Bank to the Borrower
in an aggregate principal amount not exceeding U.S.$71,250,000. Terms defined in
the Loan Agreement have their respective defined meanings when used herein.
In rendering the opinions expressed below, we have examined the
following documents:
(a) an executed copy of the Loan Agreement;
(b) an executed copy of the Guarantee:
(c) certified copies of the articles of incorporation and
corporate registry extracts of the Guarantor; and
(d) a certified copy of the minutes of a meeting of the Board of
Directors of the Guarantor authorizing the execution, delivery
and performance of the Guarantee.
In addition, we have examined such other documents and records and such
matters of law as we have deemed appropriate as a basis for the opinions
hereinafter expressed.
57
2
In such examination, we have assumed the genuineness of all signatures
and the authenticity of all documents submitted to us as originals, and the
conformity with the originals of all documents submitted to us as copies
thereof, and we have found nothing to indicate that such assumptions are not
fully justified. As to any other matters fact material to the opinions expressed
herein, we have relied upon certain certificates or statements of officers and
other representatives of the Guarantor.
Based upon the foregoing, and subject to the qualifications set forth
below, and having regard to such legal considerations as we deem relevant, we
are of the opinion that:
1. The Guarantor is a corporation duly organized and validly existing
under the laws of Korea and has full power and authority (corporate and
otherwise) to own Property and assets, to carry on business as now being
conducted and to make and perform the Guarantee.
2. The making and performance by the Guarantor of the Guarantee (i)
have been duly authorized by all necessary corporate and other action of the
Guarantor, (ii) do not and will not violate any provision of the articles of
incorporation, or equivalent documents, of the Guarantor or of applicable laws
or regulations of Korea or, of any judgment, decree, order or award of any
court, regulatory body or arbitral tribunal known to us, and (iii) do not and
will not result in the breach of, or constitute a default under or require any
waiver or consent under, any loan agreement, indenture or other agreement,
instrument or document whatsoever known to us to which the Guarantor is a party
or by which, it or any of its property, assets or revenues may be bound or
affected. Mr. ____________of Anam Industrial Co., Ltd. has been duly authorized
to execute and deliver the Guarantee and all other documents, certificates,
notices and other instruments on behalf of the Guarantor required by the terms
of the Loan Agreement or the Guarantee and such person's signature thereon
legally binds the Guarantor.
3. Assuming that the Guarantee is legal, valid and enforceable under
the law of the State of New York by which it is expressed to be governed, the
Guarantee constitutes the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its terms.
4. All consents, approvals, licenses and authorizations (including,
without limitation, all foreign exchange approvals) of, and filings and
registrations with, any governmental authority required under applicable laws
and regulations of Korea for (i) the making and performance by the Guarantor of
the Guarantee, and (ii) the Guarantee to be admissible in evidence in Korea have
been obtained or made and are in full force and effect; provided, however, that
each actual payment by the Guarantor under the Guarantee will require a separate
payment authorization of the Guarantor's designated foreign exchange bank (the
"Designated Bank"). The granting of any such authorization is largely an
administrative act in nature designed in order for the Designated Bank to verify
that the amount being remitted conforms to the amount required to be remitted
under the Guarantee as initially approved by the Designated Bank and,
accordingly, such authorization should be readily granted for all payments by
the Guarantor under the Guarantee that do so conform. We note that any amendment
to the Guarantee or any
58
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assignment thereof resulting in a conflict with the initial approval of the
Designated Bank would require a separate approval of the relevant authority at
the time of such amendment or assignment. We also note that in order to be
admitted in evidence by a court in Korea, documents submitted to the court must
be in the Korean language or accompanied by a Korean language translation.
5. The Guarantee is the direct and unconditional general obligation of
the Guarantor, ranking in right of payment and collateral security at least pari
passu with all other unsecured Indebtedness of the Guarantor except for
statutory preferences which are applicable generally to corporations established
under Korean law.
6. The Guarantor is subject to civil and commercial law of Korea with
respect to its obligations under the Guarantee, and the making and performance
by the Guarantor of the Guarantee constitute private and commercial acts rather
than governmental or public acts; and neither the Guarantor nor any of its
property, assets or revenues enjoys any right of immunity from suit, court
jurisdiction, attachment prior to judgment, attachment in aid of execution,
setoff, execution or from any other legal process with respect to its
obligations under the Guarantee.
7. There is no tax of any kind due in connection with the execution and
delivery of the Guarantee, and there is no withholding or other tax or charge
applicable to any payment to be made by the Guarantor pursuant to the terms of
the Guarantee or imposed on the Bank (other than the tax to be imposed on the
overall net income of the Bank) by virtue of the execution and delivery of the
Guarantee, except that the stamp tax in the amount of W350,000 would be payable
on the execution of the Loan Agreement to the extent executed in Korea. The
Guarantor's obligation under the Guarantee to make payments thereunder free and
clear of and without reduction by reason of Taxes (including any such Tax set
forth in the preceding sentence) and including in the event that Korea or any
governmental subdivision thereof should in the future impose (or, as the case
may be, increase) any such tax, withholding or charge, whether by change in law,
regulation or the interpretation thereof so that each Bank shall receive the
amount due as if no such tax, withholding or charge had been imposed, is valid
and binding on the Guarantor.
8. Under the laws of Korea, the choice of New York law to govern the
validity, construction and performance of the Guarantee is a valid choice of
law. We note, however, that in the event of an action, proceeding or litigation
in a Korean court, (a) Korean law bearing upon the capacity of the Guarantor to
enter into contracts and (b) Korean laws, decrees and administrative regulations
requiring governmental approvals, authorizations and consents for actions or
contracts executed by the Guarantor, will be applied by the Korean court.
9. The submission of the Guarantor in the Guarantee to the jurisdiction
of New York and United States courts referred to therein constitutes the legal
and valid undertaking of the Guarantor and does not contravene any provision of
the laws of Korea.
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10. It is not necessary or advisable under the laws of Korea, in order
to assure the validity, effectiveness and enforceability of the Guarantee or any
part thereof, that the Guarantee be filed, registered or recorded in any public
office or elsewhere, or that any other instrument relating thereto be executed,
delivered, filed, registered or recorded in Korea.
Our opinions expressed above are subject to the following reservation
qualifications:
(A) The binding effect of the obligations of the Guarantor under
the Guarantee may be limited or affected by the bankruptcy,
insolvency, liquidation, reorganization or reconstruction of
the Guarantor Pursuant to the bankruptcy laws or other similar
laws of Korea which affect the enforcement of creditors'
rights generally; and
(B) Nothing in this letter should be taken as indicating that the
remedies of specific performance or injunction (being in some
instances discretionary remedies of the court) would
necessarily be available with respect to any particular
provision of the Guarantee in any particular instance.
As we are duly licensed attorneys of Korea and do not represent
ourselves to be familiar with the laws of the United States of America or any
state thereof, or the laws of any jurisdiction other than Korea, we express no
opinion in respect of any of such laws other than the laws of Korea as in effect
on the date hereof. We have assumed that there is nothing in the law of any
jurisdiction other than Korea that affects this opinion.
This opinion is limited to the matters addressed herein and is not to
be read as an opinion with respect to any other matter.
This opinion is addressed to you and may be relied upon only by you and
your counsel.
Very truly yours,
Xxx & Xxxxx
60
EXHIBIT E
[FORM OF SPECIAL NEW YORK COUNSEL TO THE BANK]
_______________, 1996
Re: Loan Agreement dated as of March 28, 1996
between Amkor/Anam, Pilipinas, Inc., as
Borrower, and The Korea Development Bank, as
Bank
The Korea Development Bank,
as Bank
party to the Loan Agreement
referred to below
Ladies and Gentlemen:
We have acted as your special New York counsel in connection with the
Loan Agreement dated as of March 28, 1996 (the "Loan Agreement") between
Amkor/Anam Pilipinas Inc., as Borrower and The Korea Development Bank, as Bank.
Terms defined in the Loan Agreement are used herein with the same meanings. In
this connection, we have examined an executed copy of each of the Loan Agreement
and the Guarantee (collectively, the "Documents").
We have also reviewed such other documents and such matters of law as
we have considered relevant hereto (and in such examination and review we have
assumed the genuineness of all signatures, the authenticity of documents
submitted to us as originals and the conformity, with the original documents of
all documents submitted to us as copies). With your permission and without
independent investigation, we have assumed for purposes of our opinion set forth
below that with respect to each party to any of the Documents, (i) such party is
duly organized and validly existing in the jurisdiction of its organization,
(ii) such party has full power, authority, and legal right to make and perform
the Documents to which it is a party, (iii) each of the Documents to which it is
a party has been duly authorized, executed and delivered by it, (iv) all
consents, approvals, licenses. and authorizations of, or filings and
registrations with, any governmental authority required under any law or any of
such party's corporate or other organizational documents or any agreement or
instrument to which it is a party or that binds or affects it or any of its
property, for the making and performance by such party of any of the Documents
to which it is a party and the consummation of the transactions contemplated by
such Documents have been obtained or made and are valid and sufficient for their
intended purposes and in full force and effect, and (v) except with respect to
the Borrower in respect of the Loan Agreement and the Guarantor in respect of
the Guarantee, each Document to which it is a part constitutes its legal, valid
and binding obligation. As to certain of the foregoing matters, we understand
you have obtained the opinions of Xxx & Xxxxx, in respect of certain Korean
legal matters, and Puno & Puno, in respect of certain Philippine legal matters.
61
2
Based on and subject to the foregoing, and further subject to the
qualifications set forth below, and having due regard for legal considerations
we deem relevant, it is our opinion that, under the law of the State of New
York, (i) the Loan Agreement constitutes the valid and binding obligation of the
Borrower enforceable against the Borrower and (ii) the Guarantee constitutes the
valid and binding obligation of the Guarantor enforceable against the Guarantor,
in each case in accordance with the terms of the Loan Agreement and the
Guarantee, respectively, subject to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally. Our opinion as to enforceability is further subject
to (i) general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including (a) the possible unavailability of
specific performance, injunctive relief or any other equitable remedy, and (b)
concepts of materiality, reasonableness, good faith and fair dealing, and (ii)
in view of each party to each of the Documents being a non-U.S. Person, the
possible judicial application of non-U.S. laws or governmental actions affecting
the enforcement of creditors' rights.
We express no opinion herein as to (i) the subject matter jurisdiction
of the District Courts of the United States of America to adjudicate any
controversy relating to any of the Documents; (ii) any provision of any of the
Documents to the extent that it provides an indemnity for payment in a currency
other than U.S. Dollars; (iii) whether a court outside of the State of New York
would honor the choice of New York law in any of the Documents; (iv) the waiver
of immunity in Section 10.11 of the Loan Agreement or Section 3.09 of the
Guarantee to the extent such waiver purports to apply to immunity acquired by
any party after the date of the Loan Agreement or the Guarantee, respectively;
and (v) the last sentence in Section 10.12 of the Loan Agreement or in Section
5.09 of the Guarantee insofar as it constitutes either a waiver of forum non
conveniens in respect of the United States District Court referred to in said
Section 10.12 of the Loan Agreement or Section 5.09 of the Guarantee of a waiver
of the right to object to improper venue.
We do not herein express any opinion as to any law other than the law
of the State of New York and the Federal law of the United States of America. In
rendering the foregoing opinions we have assumed that enforcement of the
Documents in accordance with New York law would not violate any provision of any
law or public policy of Korea, the Republic of Philippines or any other
jurisdiction (other than the State of New York) that bears a reasonable relation
to the Documents or the parties thereto. This opinion may be relied upon solely
by you.
Very truly yours,
YJK/GSG
