EXHIBIT 4.22
EXECUTION COPY
THIS FACTORY KUN-MORTGAGE AGREEMENT (the "Agreement") is entered into as of this
26th day of December, 2003 by and among:
(i) SIMMTECH CO. LTD, a company duly incorporated and existing under the laws
of Korea and having its principal place of business at 00-0 Xxxxxxxx-Xxxx,
Xxxxxxxx-xx, Xxxxxxxx, Xxxxxxxxxxxxx-xx, Xxxxx 361-290 (the "Mortgagor");
and
(ii) ST ASSEMBLY TEST SERVICES LTD., a company duly incorporated and existing
under the law of Singapore and having a place of business at 0 Xxxxxx
Xxxxxx 00, Xxxxxxxxx 000000 (the "Mortgagee").
RECITALS
WHEREAS:
A. By the Loan Agreement dated as of December 26, 2003 (the "Loan Agreement")
made by and between the Mortgagor, the Mortgagee and Mr. Se-Xx Xxxx, the
Mortgagee has agreed, subject to and upon the terms and conditions
contained therein, to provide a loan to the Mortgagor in the amount of USD
15 million (USD 15,000,000); and
B For the purposes of securing the Secured Obligations (as defined below),
the Mortgagor grant to the Mortgagees, inter alia, a fourth priority
maximum amount factory mortgage over the properties located at 00-0
Xxxxxxxx-Xxxx, Xxxxxxxx-xx, Xxxxxxxx, Xxxxxxxxxxxxx-xx, Xxxxx (including
all building and equipment located thereon).
NOW, THEREFORE, it is agreed as follows:
1. Interpretation
Words and expressions defined in the Loan Agreement shall, unless otherwise
defined herein or the context otherwise requires, have the same meaning when
used in this Agreement. References to any agreement or document shall be
construed as references to such agreement or document as varied, amended,
novated or supplemented from time to time. In addition thereto, as used in this
Agreement:
1.1 "Mortgaged Properties" shall mean the properties located at 00-0
Xxxxxxxx-Xxxx, Xxxxxxxx-xx, Xxxxxxxx, Xxxxxxxxxxxxx-xx, Xxxxx, which
include all building and equipment located thereon as agreed by the
parties.
1.2 "Secured Obligations" shall mean (i) any and all obligations, liabilities
and indebtedness of the Mortgagor owing to the Mortgagor, presently
existing or to be incurred hereinafter under or with respect to the Loan
Agreement, (ii) moneys, obligations and liabilities owing
and payable by the Major Shareholder (defined in the Loan Agreement) to the
Mortgagee under the Share Pledge Agreement dated December 26, 2003 made
between the Major Shareholder and the Mortgagee, (iii) moneys, obligations
and liabilities owing and payable by the Mortgagor to the Mortgagee under
the Yangdo Tambo Agreement dated December 26, 2003 made between the
Mortgagor and the Mortgagee ("Yangdo Tambo Agreement") and (iv) moneys,
obligations and liabilities owing and payable by the Mortgagor to the
Mortgagee under this Agreement.
2. Establishment of Factory Kun-Mortgage
2.1 The Mortgagor does hereby grant to the Mortgagee a fourth priority maximum
amount mortgage (the "Factory Kun-Mortgage") on the Mortgaged Property to
secure the Secured Obligations pursuant to the Factory Mortgage Act of
Korea. The Mortgagee understands and acknowledged that there is a first
priority, second priority and third priority mortgage over the Mortgaged
Property for the benefit of Korea Development Bank ("Priority Mortgages").
2.2 The maximum mortgage amount to be secured by the Factory Kun-Mortgage over
the Mortgaged Property shall be United States Dollars Fifteen Million Only
(USD 15,000,000.00), provided that, the Mortgagee shall, upon demand from
the Mortgagor, allow this maximum mortgage amount to be reduced from time
to time to the extent of the value of the Property To Be Owned (as defined
under the Yangdo Tambo Agreement) which is purchased by the Mortgagor and
becomes subject to the yandgo tambo pursuant to the Yangdo Tambo Agreement.
All costs and expenses incurred as a result of reducing the maximum
mortgage amount shall be borne by the Mortgagor.
2.3. Immediately upon the execution of this Agreement, the Mortgagor shall cause
the Factory Kun-Mortgage in the maximum amount of United States Dollars
Fifteen Million in favor of the Mortgagee to be registered in the real
estate registry for the Mortgaged Property with the relevant registry
office. Upon completion of the registration of the Factory Kun-Mortgage,
the Mortgager shall deliver to the Mortgagee a certified copy of relevant
real estate registry extract and list of equipment.
3. Representations, Warranties and Covenants
The Mortgagor hereby represents, warrants and covenants to the Mortgagee that as
of the date hereof:
(a) the execution, delivery and performance by the Mortgagor of this
Agreement has been duly authorized by the Mortgagor, and are not in
conflict with any provision of any applicable laws or regulations or
the articles of incorporation of the Mortgagor;
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(b) the execution, delivery and performance by the Mortgagor of this
Agreement does not violate or cause any default under any indenture,
agreement or undertaking by which the Mortgagor is bound;
(c) all authorizations required from any government or governmental agency
in connection with this Agreement have been obtained and are in full
force and effect except for the report to the foreign exchange bank
under the Korean Foreign Exchange Transaction Law and the regulations,
which will be submitted by the Mortgagee immediately after the
execution of this Agreement;
(d) this Agreement constitutes valid obligations of the Mortgagor, legally
binding upon it and enforceable in accordance with its terms, subject,
as to enforceability, to laws relating to bankruptcy, insolvency,
liquidation, reorganization, court schemes, moratoria, administration
and other laws generally affecting the rights of creditors;
(e) all property forming part of the Mortgaged Property is owned legally
by the Mortgagor by good and marketable title free from all security,
interest, lien or other encumbrance other than the Priority Mortgages,
and shall at all times be and remain free from any security, interest,
lien or other encumbrance, except for the Priority Mortgages and the
mortgage created hereunder;
(f) the Mortgagor has not agreed, and will not agree to sell, assign,
transfer or create any security, interest, lien or other encumbrance
in or over all or any part of the Mortgaged Property other than the
Priority Mortgages;
(g) to the knowledge of the Mortgagor, there are no circumstances that may
or will diminish the value of the Mortgaged Property; and
(h) the Mortgagor has not taken any corporate action nor have any other
steps been taken or legal proceedings been started by it or any third
party for its winding up, dissolution, reorganization or bankruptcy or
for the appointment of a receiver, trustee or similar officer over the
Mortgagor or its assets or revenues, and there occurs or continues no
cause/event that may lead to such action or steps.
4. Scope of Factory Kun-Mortgage
4.1 The Factory Kun-Mortgage created hereunder shall be effective as a matter
of course with respect to not only doors, walls, terraces, garden trees,
garden stones, structures, appurtenant buildings, facilities for water
supply and sewage, electrical facilities including the facilities for
supply and transformation of electric power, air-conditioning and heating
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facilities, elevator facilities, facilities for gas supply, and all other
facilities in or outside the buildings but also attached machinery and
tools, which are united with or attached to the Mortgaged Property and
goods to be attached to or united from time to time with the Mortgaged
Property by extension, reconstruction, repair or rebuilding.
4.2 If any building located on the land which is subject to this Factory
Kun-Mortgage is not registered on the official register or if a new
building is built on such land, the Mortgagor shall promptly register the
unregistered existing or new buildings (including the buildings which are
owned by a third party) and cause to be granted to the Mortgagee a Factory
Kun-Mortgage on such buildings pursuant to Section 2 hereof, upon the
Mortgagee's request for purposes of protecting the rights of the Mortgagee
hereunder and submit an amended registry showing the establishment of a
Factory Kun-Mortgage on such previously unregistered or new buildings.
4.3 The Factory Kun-Mortgage created hereunder shall also extend as to any
actual part of the Mortgaged Property not actually shown in the registry to
the extent that such part is deemed to fall within the scope of the
property described in the registry thereof. If the Mortgagee, in its
reasonable judgment, deems it necessary to file for an amendment or
addition to the Factory Kun-Mortgage for the preservation of the
Mortgagee's rights, the Mortgagor shall immediately take all such actions
as the Mortgagees may request.
5. Preservation of the Mortgaged Property
5.1 The Mortgagor shall not transfer the Mortgaged Property or materially
change the nature or condition of the Mortgaged Property (other than in the
ordinary course of business of the Mortgagor or as a consequence of normal
wear and tear), without the prior consent of the Mortgagee, nor do any act
(legal or otherwise) which may cause damage or losses to the Mortgagee.
5.2 The Mortgagor shall give prompt notice to the Mortgagee in the event there
is any material damage, destruction or expropriation, or there occurs any
event that may cause material impairment in the value of the Mortgaged
Property.
5.3 In the event any party (other than the Mortgagee) attaches (including
provisional attachment), seizes or otherwise creates, asserts, claims or
otherwise acquires any lien or security interest over the Mortgaged
Property, the Mortgagor shall promptly notify the Mortgagee thereof and
take all necessary actions to dismiss, discharge and release such
attachment, seizure, lien or other security interest.
6. Enforcement of Factory Kun-Mortgage
6.1 If any of the Secured Obligations becomes due and payable, the Mortgagee
shall become
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forthwith entitled, as and when it may see fit, to put into force and to
exercise all or any of the power possessed by it as mortgagees, chargees
and assignees of the Mortgaged Property, including without limitation, the
power to:
(a) exercise their rights to any of the Mortgaged Property, regardless of
whether such Mortgaged Property is in its own name, in the name of the
Mortgagor or otherwise;
(b) assign, sell or other dispose of the Mortgaged Property to such
person, at a public or a private sale, and upon such terms and in such
manner as the Mortgagee may reasonably determine, and the Mortgagee or
anyone else may be the purchaser, assignee or recipient of any or all
of the Mortgaged Property and thereafter hold the same absolutely free
from any claims or rights of the Mortgagor whatsoever;
(c) take over or institute (by using the name of the Mortgagor, if
necessary) all such proceedings in connection with the Mortgaged
Property as the Mortgagee may in its sole discretion think fit (but
shall be under no obligation to do so); and
(d) make any reasonable compromise or settlement deemed desirable with
respect to any of the Mortgaged Property.
Notwithstanding the foregoing, if the holder of the Priority Mortgages
enforces its rights against the Mortgaged Property, the Mortgagee shall be
entitled to participate in the distribution of the proceeds from such
enforcement to the extent permitted by applicable laws.
6.2 If the proceeds of the sale, collection or other collection upon or
realization of the Mortgaged Property pursuant to Section 6.1 hereof, which
will be applied to the Secured Obligations, are insufficient to cover the
costs and expenses of such realization and the payment in full of the
Secured Obligations, the Mortgagor shall remain liable for any such
deficiency.
6.3 The Mortgagee shall incur no liability as a result of the sale of the
Mortgaged Property or any part thereof, at any private sale pursuant to
Section 6.1 hereof conducted in a commercially reasonable manner. The
Mortgagor hereby waives any claims against the Mortgagee arising by reason
of the fact that the price at which the Mortgaged Property has been sold at
such private sale may be less than the price at which it could have been
sold if the Mortgagee had not accepted the first offer received or had
offered the Mortgaged Property to more than one offeree.
6.05 The Mortgagor hereby irrevocably appoints the Mortgagee as its
attorneys-in-fact, for and on behalf of the Mortgagor and in its name, to:
(i) execute, seal and deliver and otherwise perfect any such documents as
mentioned in Section 8; (ii) execute, seal and deliver to any
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purchaser of the Mortgaged Property from the Mortgagee in the exercise of
the Mortgagee's power under Section 6, a xxxx of sale or other assurance of
title; and (iii) execute all such documents as the Mortgagor could do in
respect of the Factory Kun-Mortgage, registration or deregistration of the
Mortgaged Property or Factory Kun-Mortgage with the relevant registry
office in connection with the exercise of the Mortgagees' powers under
Section 6; provided, that the Mortgagee shall not exercise the authority
conferred in sub-clause (ii) and (iii) above unless an Event of Default has
occurred and is continuing.
7. Assignment
This Agreement and the Factory Kun-Mortgage created hereunder shall be binding
upon and inure to the benefit of the Mortgagor and the Mortgagee and their
respective heirs, successors and assigns. The Mortgagee may, in the ordinary
course of business and in accordance with the applicable law, at any time assign
all or any part of its rights or obligations hereunder to any party (each an
"Assignee") without the consent of the Mortgagor. The parties hereto agree that
to the extent of any assignment, the Assignee shall be deemed to have the same
rights and benefits under this Agreement as it would have had if it were a
Mortgagee hereunder. The Mortgagor may not assign any of its rights or
obligations hereunder without the prior written consent of the Mortgagee.
8. Further Assurances
8.1 The Mortgagor covenants that it will promptly from time to time at the
reasonable request of the Mortgagee do all such things and execute all such
documents as Mortgagee may reasonably consider necessary or desirable for
giving full effect to this Agreement or for securing the rights of the
Mortgagees hereunder.
8.2 Upon the request of the Mortgagee and at the Mortgagor's expense, the
Mortgagor hereby agrees to take any and all necessary actions for the
registration, recordation or any other procedures that may be required for
the creation, amendment, refiling or deregistration of the Factory
Kun-Mortgage.
9. Termination and Release of Mortgage
The term of this Agreement shall begin on the date of this Agreement and end on
the date on which all of the Secured Obligations have been unconditionally and
irrevocably paid and discharged in full. Upon termination of this Agreement, the
Mortgagee shall, at the request of the Mortgagor and at the Mortgagor's cost and
expense, deregister the Factory Kun-Mortgage from the relevant registry office
and take such other action as may be reasonably requested by the
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Mortgagor to effectuate the release of the Factory Kun-Mortgage.
10. Governing Law and Jurisdiction
This Agreement and the grant of mortgage pursuant hereto shall be governed by
the laws of Korea in all respects. The parties hereto agree that any legal
action or proceeding arising out of or relating to this Agreement may be brought
in the Seoul District Court in Korea and irrevocably submit to the non-exclusive
jurisdiction of such court.
11. Miscellaneous
11.1 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective, shall be in writing and shall be personally
delivered or sent by facsimile (with subsequent written confirmation) or by
registered or certified first class mail, postage prepaid, return receipt
requested, or by overnight (or next business day) courier service shall be
deemed to have been duly given or made when delivered by hand, on the day
that such facsimile is transmitted, or, if by first class mail, five days
following the date on which such writing is deposited with the postal
service, or the day after the date when deposited with an overnight (or
next business day) courier service, addressed as follows, or to such other
address as either party hereto may hereafter specify in writing to the
other party:
To: ST Assembly Test Services Ltd
0 Xxxxxx Xxxxxx 00
Xxxxxxxxx 000000
Attention: Director, Legal
DID: 00 0000 0000
Fax: 00 000 0000
To: SimmTech Co., Ltd.
00-0 Xxxxxxxx-xxxx
Xxxxxxxx-xx
Xxxxxxxx, Xxxxxxxxxxxxx-Xx
Xxxxx
Attention: Chief Marketing Officer
DID: 00-00-000 9280
Fax: 00-00-000 9048
11.2 Severability. If any of the provisions of this Agreement shall contravene
any law or regulation or be held invalid, this Agreement shall be construed
as if not containing those provisions, and the rights and obligations of
the parties hereto shall be construed and
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enforced accordingly.
11.3 Amendments, Changes and Modifications. This Agreement shall not be amended,
changed, modified, altered or terminated unless the prior written approval
of each of the Mortgagor and the Mortgagee is obtained. This Agreement
shall not be amended by an oral agreement.
11.4 Counterparts. This Agreement may be executed in multiple counterparts, each
of which, when executed, shall constitute an original but all of which
together shall constitute one and the same instrument.
11.5 Heading. Headings and titles herein are for convenience only and shall not
affect the construction or interpretation of this Agreement.
11.6 Entire Agreement. This Agreement is intended by the parties as the written
final expression of each party's obligations and rights in connection with
the Mortgaged Property and supersedes all prior and contemporaneous
understandings or agreements concerning the subject matter hereof.
11.7 No Waiver. Neither the Security Agent nor any Mortgagee shall, by any act,
delay, indulgence, omission or otherwise, except by an express written
instrument clearly indicating an intention to waive, be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Event of
Default. No failure to exercise, nor any delay in exercising on the part of
the Mortgagee, any rights, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power,
privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
11.8 Remedies Cumulative. The rights and remedies provided herein are cumulative
and may be exercised individually or concurrently, and are not exclusive of
any other rights or remedies provided by law.
SIGNATURE PAGE TO FOLLOW
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year first above written.
MORTGAGOR: SIMMTECH CO. LTD
By: /s/ Se-Xx Xxxx
-----------------------------------------------
Name: Se-Xx Xxxx
Title: Representative Director
In the presence of : /s/ Young Goo Xxx
----------------------
MORTGAGEE: ST ASSEMBLY TEST SERVICES LTD
By: /s/ Xxx Xxx Suk
-----------------------------------------------
Name: Xx. Xxx Xxx Xxxx
Title: President and CEO
In the presence of : /s/ Xxxxxxx Xx
----------------------
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