Exhibit 10.1
AMENDMENT NO. 3, WAIVER AND AGREEMENT dated as of
December 31, 2001 (this "Amendment"), to the CREDIT
AGREEMENT dated as of August 5, 1999, as amended and
restated as of June 30, 2000, as amended by Amendment No. 1
dated as of March 13, 2001, and Amendment No. 2 dated as of
June 8, 2001 (the "Credit Agreement"), among CHIPPAC
INTERNATIONAL COMPANY LIMITED, a British Virgin Islands
company (the "Company"), CHIPPAC, INC., a Delaware
corporation ("ChipPAC"), the Lenders (as defined therein)
and CREDIT SUISSE FIRST BOSTON, a bank organized under the
laws of Switzerland, acting through its New York branch
("CSFB"), as administrative agent (in such capacity, the
"Administrative Agent"), as sole lead arranger (in such
capacity, the "Sole Lead Arranger") and as collateral agent
(in such capacity, the "Collateral Agent") for the Lenders.
A. Pursuant to the Credit Agreement, the Lenders and the Issuing Bank have
extended, and have agreed to extend, credit to the Company.
B. ChipPAC and the Company have requested that the Required Lenders waive
compliance by ChipPAC and the Company with certain provisions of the Credit
Agreement, and that the Credit Agreement be amended, in each case as provided
herein. The Required Lenders are willing to grant such waiver and to amend the
Credit Agreement pursuant to the terms and subject to the conditions set forth
herein.
C. Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Credit Agreement.
Accordingly, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Waiver. (a) Subject to paragraph (b) below, the Required Lenders
hereby waive compliance by ChipPAC and the Company with the provisions of
Subsections 7.6A, 7.6B and 7.6F of the Credit Agreement during the Waiver Period
(as defined below).
(b) The waiver provided for by paragraph (a) above shall be effective only
during the period (the "Waiver Period") commencing on and including December 31,
2001, and ending on and including December 31, 2002; provided, however, that if
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the Company shall not have consummated the Prepayment Transactions (as defined
in Section 3 below) on or prior to March 1, 2002 (the "Prepayment Transactions
Date"), then the Waiver Period shall expire on the Prepayment Transactions Date,
and the provisions of
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Subsections 7.6A, 7.6B and 7.6F of the Credit Agreement shall apply in all
respects on and after such date as originally in effect without regard to such
waiver, and the Administrative Agent and the Lenders shall have all rights and
remedies under the Credit Agreement that they would have had if such waiver had
never been granted; provided further, that if the Prepayment Transaction is a
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registered offering of securities and the Securities and Exchange Commission
reviews such offering, then the Prepayment Transactions Date shall be extended
for such additional time, not to exceed 30 days, as is necessary for the
Securities and Exchange Commission to review and comment on such registered
offering and for ChipPAC to respond to such comments in good faith.
(c) The Required Lenders hereby waive compliance by ChipPAC and the Company
with the provisions of Subsection 7.1 of the Credit Agreement to the extent
necessary to allow ChipPAC or the Company to issue on or prior to the Prepayment
Transactions Date and remain liable on Permitted Junior Capital (as defined in
Section 3 below) constituting subordinated Indebtedness; provided that any such
Indebtedness shall be deemed to be "Convertible Subordinated Notes" for purposes
of Subsections 7.5, 7.6F, 7.11B and 8.11 of the Credit Agreement.
SECTION 2. Amendments to the Credit Agreement. (a) Subsection 1.1 of the
Credit Agreement is hereby amended as follows:
(i) The definition of the term "Applicable Base Rate Margin" is hereby
amended and restated in its entirety as follows:
"Applicable Base Rate Margin" means (i) with respect to Term C
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Loans, 3.25% per annum, (ii) with respect to Term B Loans, 3.25% per
annum, and (iii) with respect to Term A Loans, Term Delayed Draw Loans
and Revolving Loans, a percentage per annum determined by reference to
the Applicable Leverage Ratio as set forth below:
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Applicable Base Rate
Applicable Margin for Term A
Leverage Loans, Term Delayed Draw
Ratio Loans and Revolving Loans
(greater than)3.5:1.0 2.50%
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(less than or equal to)3.5:1.0 2.25%
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(less than or equal to)3.0:1.0 2.00%
(less than)2.5:1.0 1.75%
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;provided, however, that the Applicable Base Rate Margin shall be
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2.50% in the case of Term A Loans, Term Delayed Draw Loans and
Revolving Loans, in each case for so long (but only for so long) as an
Event of Default has occurred and is continuing or Company has not
submitted to the Administrative Agent the information as and when
required under subsection 6.1(ii) or (iii), as applicable.
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(ii) The definition of the term "Applicable Eurodollar Rate Margin" is
hereby amended and restated in its entirety as follows:
"Applicable Eurodollar Rate Margin" means (i) with respect to
Term C Loans, 4.25% per annum, (ii) with respect to Term B Loans,
4.25% per annum, and (iii) with respect to Term A Loans, Term Delayed
Draw Loans and Revolving Loans, a percentage per annum determined by
reference to the Applicable Leverage Ratio as set forth below:
===================================================================
Applicable Eurodollar
Applicable Rate Margin for Term A
Leverage Loans, Term Delayed Draw
Ratio Loans and Revolving Loans
(greater than)3.5:1.0 3.50%
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(less than or equal to)3.5:1.0 3.25%
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(less than or equal to)3.0:1.0 3.00%
(less than)2.5:1.0 2.75%
===================================================================
;provided, however, that the Applicable Eurodollar Rate Margin
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shall be 3.50% in the case of Term A Loans, Term Delayed Draw Loans
and Revolving Loans, in each case for so long (but only for so long)
as an Event of Default has occurred and is continuing or Company has
not submitted to the Administrative Agent the information as and when
required under subsection 6.1(ii) or (iii), as applicable.
(b) Section 7 of the Credit Agreement is hereby amended as follows:
(i) Subsection 7.6C of the Credit Agreement is hereby amended by (A)
replacing the Maximum Consolidated Capital Expenditures Amount set forth
therein for Fiscal Year 2002 with the amount $30,000,000 and (B) inserting
immediately prior to the period at the end of Subsection 7.6C(i) thereof
the words"; provided further that, to the extent financed with Local Lines
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of Credit, the Maximum Consolidated Capital Expenditure Amount shall not
include any expenditures resulting from the conversion of an Operating
Lease to owned property".
(ii) Subsection 7.6 is hereby amended by adding at the end thereof the
following:
"G. Minimum Consolidated Adjusted EBITDA. The Consolidated Adjusted
EBITDA for any four-Fiscal Quarter period ending on any date set forth
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below shall not be less than the corresponding amount set forth below
opposite such date:
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Minimum Consolidated
Date Adjusted EBITDA
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March 31, 2002 $30,000,000
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June 30, 2002 $26,000,000
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September 30, 2002 $32,000,000
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December 31, 2002 $40,000,000
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SECTION 3. Agreement. The Company and ChipPAC hereby agree as follows:
(a) The Company and ChipPAC will use reasonable efforts to issue or
cause to be issued Permitted Junior Capital on or prior to the Prepayment
Transactions Date, in an amount sufficient to raise at least $20,000,000 of
Net Proceeds (as defined below). If such Permitted Junior Capital is issued
by the Company or ChipPAC prior to the Prepayment Transactions Date, then
on or prior to the first Business Day following the receipt of such Net
Proceeds, the Company will prepay the outstanding Term Loans in an
aggregate principal amount equal to the greater of (i) $20,000,000 and (ii)
50% of the amount of such Net Proceeds, such prepayment to be applied as
specified for mandatory prepayments in Subsection 2.4(c) of the Credit
Agreement. The Required Lenders hereby consent to the foregoing prepayment
requirement and waive compliance by the Company and ChipPAC with
Subsections 2.4B(iii)(b) and (c) to the extent such subsections would
require the application of a greater percentage of the Net Proceeds of
Permitted Junior Capital issued on or prior to the Prepayment Transactions
Date, to be applied to the prepayment of the Term Loans.
(b) As used herein, the following terms shall have the meanings
specified below:
"Net Proceeds" shall mean (a) with respect to any issuance of
Permitted Junior Capital constituting Capital Stock or other equity
securities, the Equity Proceeds thereof, and (b) with respect to any
issuance of Permitted Junior Capital constituting Indebtedness, the
gross cash proceeds thereof (net of any payment of underwriting
discounts, commissions and other costs and expenses associated
therewith (including legal costs and expenses)).
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"Permitted Junior Capital" shall mean (a) Capital Stock of
ChipPAC or (b) subordinated, unsecured Indebtedness of ChipPAC or the
Company; provided that (i) such Permitted Junior Capital does not
require any scheduled payment of principal or return of capital prior
to the maturity date of the Convertible Subordinated Notes issued
prior to the Amendment Effective Date (as defined below) and (ii) the
subordination provisions (in the case of Indebtedness) and other
non-pricing terms and conditions thereof are no less favorable to
ChipPAC and its Subsidiaries and the Lenders than the analogous
provisions of the Subordinated Debt Documents issued prior to the
Amendment Effective Date.
"Prepayment Transactions" shall mean, collectively, the issuance
of the Permitted Junior Capital and the prepayment of the Term Loans
as required by Section 3 hereof.
SECTION 4. Representations and Warranties. To induce the other parties
hereto to enter into this Amendment, the Company and ChipPAC represent and
warrant to each of the Lenders that, after giving effect to this Amendment, (a)
the representations and warranties set forth in Section 5 of the Credit
Agreement are true and correct in all material respects on and as of the date
hereof, except to the extent such representations and warranties expressly
relate to an earlier date, and (b) no Default or Event of Default has occurred
and is continuing.
SECTION 5. Effectiveness. This Amendment shall become effective as of the
date first written above on the date (the "Amendment Effective Date") on which
the Administrative Agent shall received (a) the Amendment Fee (as defined below)
and (b) counterparts of this Amendment that, when taken together, bear the
signatures of the Company, the Guarantors, the Required Lenders and the
Administrative Agent.
SECTION 6. Amendment Fee. ChipPAC and the Company agree, jointly and
severally, to pay to each Lender that executes and delivers a copy of this
Amendment to the Administrative Agent (or its counsel) at or prior to 12:00
p.m., New York City time, on December 31, 2001, an amendment fee (the "Amendment
Fee") in an amount equal to 0.25% of the sum of such Lender's Revolving Loan
Commitment (whether used or unused) and outstanding Term Loans, in each case as
of the Amendment Effective Date. The Amendment Fee shall be payable in
immediately available funds on the Amendment Effective Date. Once paid, the
Amendment Fee shall not be refundable.
SECTION 7. Effect of Amendment. Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights and remedies of the Lenders, the
Issuing Bank or the Administrative Agent under the Credit Agreement or any other
Loan Document, and shall not alter, modify, amend or in any way affect any of
the terms, conditions, obligations,
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covenants or agreements contained in the Credit Agreement or any other Loan
Document, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. Nothing herein shall be deemed to entitle any
Loan Party to a consent to, or a waiver, amendment, modification or other change
of, any of the terms, conditions, obligations, covenants or agreements contained
in the Credit Agreement or any other Loan Document in similar or different
circumstances. This Amendment shall apply and be effective only with respect to
the provisions of the Credit Agreement specifically referred to herein. After
the date hereof, any reference to the Credit Agreement shall mean the Credit
Agreement, as modified hereby. This Amendment shall constitute a "Loan Document"
for all purposes of the Credit Agreement and the other Loan Documents.
SECTION 8. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same contract. Delivery
of an executed counterpart of a signature page of this Amendment by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof.
SECTION 9. Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 10. Headings. The headings of this Amendment are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 11. Acknowledgment of Guarantors. Each of the Guarantors hereby
acknowledges receipt and notice of, and consents to the terms of, this
Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized officers, all as of the date and year
first above written.
CHIPPAC INTERNATIONAL COMPANY LIMITED,
by /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: President
CHIPPAC, INC.,
by /s/ Xxxxxx XxXxxxx
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Name: Xxxxxx Xxxxxxx
Title: President & CEO
CHIPPAC KOREA COMPANY LTD.,
by /s/ X.X. Xxxx
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Name: X.X. Xxxx
Title: President
CHIPPAC LIQUIDITY MANAGEMENT HUNGARY LIMITED LIABILITY
COMPANY,
by /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Managing Director
CHIPPAC LUXEMBOURG S.A.R.L.,
by /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Manager
CHIPPAC (BARBADOS) LTD.,
by /s/ Xxxx Xxxxx
-------------------------------------------------
Name: Xxxx Xxxxx
Title: President
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CHIPPAC LIMITED,
by /s/ Xxxxxxxx XxXxxx
-------------------------------------------------
Name: Xxxxxxxx XxXxxx
Title: Director
CHIPPAC MALAYSIA Sdn. Bhd.
by /s/ X.X. Xxxxx
-------------------------------------------------
Name: X.X. Xxxxx
Title: Director, Plant Controller
CREDIT SUISSE FIRST BOSTON, individually, and as
Administrative Agent and an Issuing Bank,
by /s/ Xxxxxx Xxxx
-------------------------------------------------
Name: Xxxxxx Xxxx
Title: Director
by /s/ Xxxx X'Xxxx
-------------------------------------------------
Name: Xxxx X'Xxxx
Title: Vice President
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SIGNATURE PAGE TO AMENDMENT NO. 3, WAIVER AND
AGREEMENT DATED AS OF DECEMBER 31, 2001, TO THE
CHIPPAC CREDIT AGREEMENT DATED AS OF AUGUST 5,
1999, AS AMENDED AND RESTATED AS OF JUNE 30, 2000,
AS AMENDED BY AMENDMENT NO. 1 DATED AS OF MARCH
13, 2001 AND AMENDMENT NO. 2 DATED AS OF JUNE 8,
2001
NAME OF LENDER: CSAM FUNDING I
--------------
by /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
NAME OF LENDER: FIRST DOMINION FUNDING III
--------------------------
by /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
NAME OF LENDER: XXXXXX FINANCIAL, INC.
----------------------
by /s/ Xxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
NAME OF LENDER: BALANCED HIGH YIELD FUND II, LTD. by ING Capital Advisors LLC
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as Asset Manager
----------------
by /s/ Xxxxxx Xxxx
-----------------------
Name: Xxxxxx Xxxx
Title: Senior Vice President & Portfolio Manager
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NAME OF LENDER: FLEET NATIONAL BANK
-------------------
by /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
NAME OF LENDER: CITIZENS BANK OF MASSACHUSETTS
------------------------------
by /s/ Xxxxxxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Vice President
NAME OF LENDER: IBM CREDIT CORPORATION
----------------------
by /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Manager of Credit
NAME OF LENDER: INDOSUEZ CAPITAL FUNDING VI, LIMITED by Indosuez Capital as
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Collateral Manager
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by /s/ Xxxxxxx Xxxxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Principal and Portfolio Manager
NAME OF LENDER: ARK II CLO 2001-1, LIMITED by Patriarch Partners II, LLC,
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its Collateral Manager
----------------------
by /s/ Xxxx Xxxxxx
-----------------------
Name: Xxxx Xxxxxx
Title: Authorized Signatory
NAME OF LENDER: SANKATY HIGH YIELD ASSET PARTNERS, L.P.
---------------------------------------
by /s/ Xxxxx X. Xxxxx
----------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Portfolio Manager
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NAME OF LENDER: FIRST SOURCE LOAN OBLIGATIONS TRUST by First Source Financial
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Inc. Its Servicer and Adminstrator
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by /s/ Xxxxxx Xxxxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Senior Vice President & General Counsel
NAME OF LENDER: BANK ONE, NA
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by /s/ Xxxxxx Xxxxxx
-----------------------
Name: Xxxxxx Xxxxxx
Title: First Vice President
