Exhibit 99.1
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AMKOR TECHNOLOGY, INC.,
UNITIVE, INC.,
and
UNITIVE ELECTRONICS, INC.,
as Borrowers
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LOAN AND SECURITY AGREEMENT
Dated as of November 28, 2005
$100,000,000
============================
CERTAIN FINANCIAL INSTITUTIONS,
as Lenders,
BANK OF AMERICA, N.A.,
as Agent,
and
WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN),
as Documentation Agent
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BANK OF AMERICA, N.A.
WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN)
Co-Lead Arrangers and Co-Book Managers
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION........................... 1
1.1. Definitions................................................. 1
1.2. Accounting Terms............................................ 38
1.3. Certain Matters of Construction............................. 38
SECTION 2. CREDIT FACILITIES............................................ 39
2.1. Revolving Commitment........................................ 39
2.2. Reserved.................................................... 41
2.3. Letter of Credit Facility................................... 41
SECTION 3. INTEREST, FEES, AND CHARGES.................................. 45
3.1. Interest.................................................... 45
3.2. Fees........................................................ 46
3.3. Computation of Interest, Fees, Yield Protection............. 47
3.4. Reimbursement Obligations................................... 47
3.5. Illegality.................................................. 47
3.6. Increased Costs............................................. 48
3.7. Capital Adequacy............................................ 49
3.8. Mitigation.................................................. 49
3.9. Funding Losses.............................................. 49
3.10. Maximum Interest............................................ 49
SECTION 4. LOAN ADMINISTRATION.......................................... 50
4.1. Manner of Borrowing and Funding Revolving Loans............. 50
4.2. Defaulting Lender........................................... 52
4.3. Number and Amount of LIBOR Revolving Loans; Determination of
Rate........................................................ 52
4.4. Borrower Agent.............................................. 53
4.5. One Obligation.............................................. 53
4.6. Effect of Termination....................................... 53
SECTION 5. PAYMENTS..................................................... 54
5.1. General Payment Provisions.................................. 54
5.2. Repayment of Revolving Loans................................ 54
5.3. Reserved.................................................... 54
5.4. Payment of Other Obligations................................ 54
5.5. Marshaling; Payments Set Aside.............................. 54
5.6. Post-Default Allocation of Payments......................... 55
5.7. Application of Payments..................................... 55
5.8. Loan Account; Account Stated................................ 56
5.9. Gross Up for Taxes.......................................... 56
5.10. Withholding Tax Exemption................................... 56
5.11. Nature and Extent of Each Borrower's Liability.............. 57
SECTION 6. CONDITIONS PRECEDENT......................................... 59
6.1. Conditions Precedent to Initial Revolving Loans............. 59
6.2. Conditions Precedent to All Credit Extensions............... 61
6.3. Limited Waiver of Conditions Precedent...................... 62
SECTION 7. COLLATERAL................................................... 62
7.1. Grant of Security Interest.................................. 62
7.2. Lien on Deposit Accounts; Cash Collateral................... 63
7.3. Real Estate Collateral...................................... 64
7.4. Other Collateral............................................ 64
7.5. No Assumption of Liability.................................. 64
7.6. Further Assurances.......................................... 64
SECTION 8. COLLATERAL ADMINISTRATION.................................... 64
8.1. Borrowing Base Certificates................................. 64
8.2. Administration of Accounts.................................. 65
8.3. Administration of Inventory................................. 66
8.4. Administration of Equipment................................. 66
8.5. Administration of Deposit Accounts.......................... 67
8.6. General Provisions.......................................... 67
8.7. Power of Attorney........................................... 68
SECTION 9. REPRESENTATIONS AND WARRANTIES............................... 69
9.1. General Representations and Warranties...................... 69
9.2. Complete Disclosure......................................... 73
SECTION 10. COVENANTS AND CONTINUING AGREEMENTS.......................... 74
10.1. Affirmative Covenants....................................... 74
10.2. Negative Covenants.......................................... 77
10.3. Total Liquidity............................................. 90
SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT....................... 90
11.1. Events of Default........................................... 90
11.2. Remedies upon Default....................................... 92
11.3. License..................................................... 93
11.4. Setoff...................................................... 93
11.5. Remedies Cumulative; No Waiver.............................. 93
SECTION 12. THE AGENT.................................................... 94
12.1. Appointment, Authority and Duties of the Agent.............. 94
12.2. Agreements Regarding Collateral and Field Examination Reports 95
12.3. Reliance By the Agent....................................... 96
12.4. Action Upon Default......................................... 97
12.5. Ratable Sharing............................................. 97
12.6. Indemnification of the Agent Indemnitees.................... 97
12.7. Limitation on Responsibilities of the Agent................. 98
12.8. Successor Agent and Co-Agents............................... 98
12.9. Due Diligence and Non-Reliance.............................. 99
12.10. Replacement of Certain Lenders.............................. 99
12.11. Remittance of Payments and Collections...................... 100
12.12. The Agent in its Individual Capacity........................ 100
12.13. Documentation Agent......................................... 101
12.14. No Third Party Beneficiaries................................ 101
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS......... 101
13.1. Successors and Assigns...................................... 101
13.2. Participations.............................................. 101
13.3. Assignments................................................. 102
13.4. Tax Treatment............................................... 102
13.5. Representation of Lenders................................... 103
SECTION 14. MISCELLANEOUS................................................ 103
14.1. Consents, Amendments and Waivers............................ 103
14.2. General Indemnity........................................... 104
14.3. Limitations of Indemnities.................................. 104
14.4. Notices and Communications.................................. 104
14.5. Performance of the Borrowers' Obligations................... 105
14.6. Credit Inquiries............................................ 105
14.7. Severability................................................ 105
14.8. Cumulative Effect; Conflict of Terms........................ 106
14.9. Counterparts; Facsimile Signatures.......................... 106
14.10. Entire Agreement............................................ 106
14.11. Obligations of the Lenders.................................. 106
14.12. Confidentiality............................................. 106
14.13. Certifications Regarding Indebtedness Agreements............ 107
14.14. Governing Law............................................... 107
14.15. Consent to Forum............................................ 107
14.16. Waivers by the Borrowers.................................... 107
14.17. Patriot Act Notice.......................................... 108
14.18. No Oral Agreement........................................... 108
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS:
Exhibit A Revolving Note
Exhibit B Notice of Borrowing
Exhibit C Notice of Conversion/Continuation
Exhibit D Compliance Certificate
Exhibit E Assignment and Acceptance
Exhibit F Assignment Notice
SCHEDULES:
Schedule 1.1A Revolving Commitments of Lenders
Schedule 1.1B Eligible Foreign Account Debtors
Schedule 1.1C Permitted Liens
Schedule 1.1D Owned Real Estate
Schedule 8.5 Deposit Accounts
Schedule 8.6.1 Business Locations
Schedule 9.1.4 Names and Capital Structure
Schedule 9.1.5A Former Names
Schedule 9.1.5B Former Places of Business
Schedule 9.1.12 Patents, Trademarks, Copyrights, and Licenses
Schedule 9.1.15 Environmental Matters
Schedule 9.1.16 Restrictive Agreements
Schedule 9.1.17 Litigation
Schedule 9.1.21 Labor Contracts
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT, dated as of November 28, 2005, is among
AMKOR TECHNOLOGY, INC. and its Subsidiaries party hereto, the lending
institutions party to this Agreement from time to time as lenders (collectively,
the "Lenders"), and BANK OF AMERICA, N.A., a national banking association, as
administrative agent for the Lenders (the "Agent").
R E C I T A L S:
The Borrowers have requested that the Lenders make available a credit
facility, to be used by the Borrowers to finance their mutual and collective
business enterprise. The Lenders are willing to provide such credit facility on
the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
parties agree as follows:
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION
1.1. Definitions. As used herein, the following terms have the
meanings set forth below:
Account - as defined in the UCC, including all rights to payment for
goods sold or leased, or for services rendered.
Account Debtor - a Person who is obligated under an Account, Chattel
Paper, or General Intangible.
Acquired Indebtedness - with respect to any specified Person (a)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person and (b) Indebtedness secured by a
Lien encumbering any asset acquired by such specified Person.
Adjusted LIBOR - for any Interest Period, with respect to LIBOR
Revolving Loans, the per annum rate of interest determined pursuant to the
following formula (expressed as a decimal, rounded upward to the next
1/8th of 1%):
Offshore Base Rate
------------------------------------
LIBOR = 1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means the reserve percentage
applicable to member banks under regulations issued from time to
time by the Board of Governors for determining the maximum reserve
requirement (including any
LOAN AND SECURITY AGREEMENT
Page 1
emergency, supplemental, or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities").
"Offshore Base Rate" means the rate per annum appearing on
Telerate Page 3750, or if such page is unavailable, the Reuters
Screen LIBO Page (or any successor page of either, as applicable),
as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if the Reuters Screen LIBO Page
is used and more than one rate is shown on such page, the applicable
rate shall be the arithmetic mean thereof. If for any reason none of
the foregoing rates is available, the Offshore Base Rate shall be
the rate per annum determined by the Agent as the rate of interest
at which Dollar deposits in the approximate amount of the applicable
LIBOR Revolving Loan would be offered to major banks in the offshore
Dollar market at or about 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable
to such Interest Period.
Affiliate - with respect to any Person (the "subject Person") any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the subject Person. For purposes of
this definition, "control," as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10.0% or more, or an agreement,
obligation, or option to purchase 10.0% or more, of the Equity Interests
of a Person that are at such time entitled to vote in the election of the
board of directors (or other similar governing body) of such Person shall
be deemed to be control. For purposes of this definition, the terms
"controlling," "controlled by," and "under common control with" shall have
correlative meanings.
Affiliate Transaction - as defined in Section 10.2.6.
Agent - as defined in the introductory paragraph of this Agreement.
Agent Advance - any Borrowing of Base Rate Revolving Loans funded
with the Agent's funds, until such Borrowing is settled among the Lenders
pursuant to Section 4.1.3.
Agent Indemnitees - the Agent and its officers, directors,
employees, Affiliates, agents, and attorneys.
Agent Professionals - attorneys, accountants, appraisers, auditors,
business valuation experts, environmental engineers or consultants,
turnaround consultants, and other professionals and experts retained by
the Agent.
Agent's Lien - the Liens in the Collateral granted to the Agent, for
the benefit of the Secured Parties, pursuant to the terms of this
Agreement or any Security Document.
LOAN AND SECURITY AGREEMENT
Page 2
Allocable Amount - as defined in Section 5.11.3.
Amkor - Amkor Technology, Inc., a Delaware corporation.
Anti-Terrorism Laws - any laws relating to terrorism or money
laundering, including the Patriot Act.
Applicable Law - all laws, rules, regulations, and governmental
guidelines applicable to the Person, conduct, transaction, agreement or
matter in question, including all applicable statutory law, common law,
and equitable principles, and all provisions of constitutions, treaties,
statutes, rules, regulations, orders, and decrees of Governmental
Authorities.
Applicable Margin - with respect to any Type of Revolving Loan and
the unused line fee to be paid pursuant to Section 3.2.1, the per annum
percentage set forth below, as determined by the lowest amount of the
Borrowers' Total Liquidity in any calendar month:
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Base Rate LIBOR Unused
Revolving Revolving Line Fee
Level Total Liquidity Loans Loans Percentage
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I Greater than or 0.00% 1.50% 0.25%
equal to $75,000,000
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II Less than 0.50% 2.25% 0.50%
$75,000,000
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The Applicable Margin shall be subject to increase or decrease during each
calendar month for such entire calendar month, and any change shall be
effective retroactively to the first day of such calendar month. If the
Total Liquidity at any time during any calendar month is unable to be
determined due to the Borrower's failure to deliver any Borrowing Base
Certificate or financial statement required to be delivered pursuant to
the terms of this Agreement, and at any time during the existence of an
Event of Default, the Applicable Margin shall be determined as if Level II
were applicable.
Approved Fund - any Person (other than a natural person) that is
engaged in making, holding or investing in extensions of credit in its
ordinary course of business and is administered or managed by a Lender, an
entity that administers or manages a Lender, or an Affiliate of either.
Asset Purchase Agreement - that certain Asset Purchase Agreement,
dated as of December 30, 1998, between Amkor and Anam Semiconductor, Inc.,
as such agreement may be extended or renewed from time to time without
alteration of the material terms thereof.
Asset Sale - as defined in Section 10.2.5.
Assignment and Acceptance - an assignment agreement between a Lender
and an Eligible Assignee, in the form of Exhibit E.
LOAN AND SECURITY AGREEMENT
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Attributable Debt - in respect of a sale and leaseback transaction
involving an operating lease, at the time of determination, the present
value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback
transaction including any period for which such lease has been extended or
may, at the option of the lessor, be extended. Such present value shall be
calculated using a discount rate equal to the rate of interest implicit in
such transaction, determined in accordance with GAAP.
Availability - determined as of any date, the amount that the
Borrowers are entitled to borrow as Revolving Loans, being the Borrowing
Base, minus the principal balance of all Revolving Loans.
Bank of America - Bank of America, N.A., a national banking
association, and its successors and assigns.
Bank of America Indemnitees - Bank of America and its officers,
directors, employees, Affiliates, agents, and attorneys.
Bank Product - any of the following products, services, or
facilities extended to any Borrower or Subsidiary by Bank of America, the
Documentation Agent, or any of their respective Affiliates: (a) Cash
Management Services; (b) products under Hedging Agreements; (c) commercial
credit card and merchant card services; (d) foreign exchange agreements;
and (e) leases or other banking products or services as may be requested
by any Borrower or Subsidiary, other than Letters of Credit.
Bank Product Debt - Indebtedness and other obligations of an Obligor
relating to Bank Products.
Bankruptcy Code - Title 11 of the United States Code.
Base Rate - the rate of interest announced by Bank of America from
time to time as its prime rate. Such rate is a reference rate only and
Bank of America may make loans or other extensions of credit at, above, or
below such rate of interest. Any change in the prime rate announced by
Bank of America shall take effect at the opening of business on the
effective day specified in the public announcement of the change.
Base Rate Revolving Loan - a Revolving Loan that bears interest
based on the Base Rate.
Beneficial Owner - as assigned to such term in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as such term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have
beneficial ownership of all securities that such "person" has the right to
acquire, whether such right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition.
Board of Governors - the Board of Governors of the Federal
Reserve System.
LOAN AND SECURITY AGREEMENT
Page 4
Borrowed Money - with respect to any Obligor, without duplication,
its (a) Indebtedness that (i) arises from the lending of money by any
Person to such Obligor, (ii) is evidenced by notes, drafts, bonds,
debentures, credit documents, or similar instruments, or (iii) was issued
or assumed as full or partial payment for Property, (b) Capital Leases,
(c) reimbursement obligations with respect to letters of credit, and (d)
guaranties of any Indebtedness of the foregoing types owing by another
Person.
Borrower - any of Amkor, Unitive, and UEI.
Borrower Agent - as defined in Section 4.4.
Borrowing - a group of Revolving Loans of one Type that are made on
the same day or are converted into Revolving Loans of one Type on the same
day.
Borrowing Base - on any date of determination, subject to the
restrictions in Section 5.7 of the Second Lien Credit Agreement or any
other similar restriction on Indebtedness in any other agreement
evidencing Indebtedness to which any Borrower is a party the effect of
which is to limit the availability of Revolving Loans made pursuant to
this Agreement, an amount equal to the lesser of (a) the aggregate amount
of Revolving Commitments, minus the LC Reserve, minus Reserves or (b) the
result of (i) up to 85.0% of the net amount of Eligible Accounts and
Eligible Foreign Accounts (as used in this definition, "net amount" means
the face amount of an Account, minus (ii) any returns, rebates, discounts
(calculated on the shortest terms), credits, allowances, or Taxes
(including sales, excise, and other taxes) that have been or could be
claimed by the Account Debtor or any other Person), minus (iii) the LC
Reserve, minus (iv) the Minimum Availability Requirement, minus (v)
Reserves.
Borrowing Base Certificate - a certificate, in form and substance
reasonably satisfactory to the Agent, by which the Borrowers certify
calculation of the Borrowing Base.
Business Day - any day (a) excluding Saturday, Sunday, and any other
day on which banks are permitted to be closed under the laws of the State
of Texas and (b) when used with reference to a LIBOR Revolving Loan, also
excluding any day on which banks do not conduct dealings in Dollar
deposits on the London interbank market.
Capital Adequacy Regulation - any law, rule, regulation, guideline,
request, or directive of any central bank or other Governmental Authority,
whether or not having the force of law, regarding capital adequacy of a
bank or any Person controlling a bank.
Capital Expenditures - expenditures made or liabilities incurred by
a Borrower or Subsidiary for the acquisition of any fixed assets, or any
improvements, replacements, substitutions, or additions thereto with a
useful life of more than one year, including the principal portion of
Capital Leases.
Capital Lease - any lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
LOAN AND SECURITY AGREEMENT
Page 5
Capital Lease Obligation - at time any determination thereof is to
be made, the amount of the liability in respect of a Capital Lease that
would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.
Cash Collateral - cash, and any interest or other income earned
thereon, that is delivered to the Agent to Cash Collateralize any
Obligations.
Cash Collateral Account - a demand deposit, money market, or other
account established by the Agent at such financial institution as the
Agent may select in its discretion, which account shall be in the Agent's
name and subject to the Agent's Liens for the benefit of the Secured
Parties.
Cash Collateralize - the delivery of cash to the Agent, as security
for the payment of the Obligations, in an amount equal to (a) with respect
to LC Obligations, 110% of the aggregate LC Obligations and (b) with
respect to any inchoate or contingent Obligations (including Obligations
arising under Bank Products), the Agent's good faith estimate of the
amount due or to become due, including all fees and other amounts relating
to such Obligations. "Cash Collateralization" has a correlative meaning.
Cash Equivalents - (a) Dollars or currency of any other sovereign
nation in which the Borrower or any Restricted Subsidiary conducts
business, (b) securities issued or directly and fully guaranteed or
insured by the full faith and credit of the United States government or
any agency or instrumentality thereof having maturities of not more than
twelve months from the date of acquisition, (c) certificates of deposit
and eurodollar time deposits with maturities of twelve months or less from
the date of acquisition, bankers' acceptances with maturities not
exceeding twelve months and overnight bank deposits, in each case with (i)
any domestic commercial bank having capital and surplus in excess of
$500,000,000 and a Fitch Individual Rating (formerly Xxxxxxxx Bank Watch
Rating) of "B" or better, or (ii) any commercial bank organized under the
laws of any foreign country recognized by the United States having capital
and surplus in excess of $500,000,000 (or the foreign currency equivalent
thereof) and a Fitch Individual Rating (formerly Xxxxxxxx Bank Watch
Rating) of "B" or better, (d) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in
clause (b) and clause (c) preceding entered into with any financial
institution meeting the qualifications specified in clause (c) preceding,
(e) commercial paper having the highest rating obtainable from either
Xxxxx'x or S&P and, in each case, maturing within six months after the
date of acquisition, and (f) money market funds at least 95.0% of the
assets of which constitute Cash Equivalents of the kinds described in
clause (a) through clause (e) of this definition, provided that (w) the
currency of any sovereign nation other than the United States, (x)
certificates of deposit, eurodollar time deposits, and bankers'
acceptances with any commercial bank organized under the laws of any
country other than the United States, (y) repurchase obligations entered
into with any financial institution organized under the laws of any
country other than the United States, and (z) overnight bank deposits with
any commercial bank organized under the laws of any country other than the
United States shall not be considered "Cash Equivalents" for purposes of
determining the amount of Total Liquidity at any time and whether an Asset
Sale is permitted pursuant to Section 10.2.5.
LOAN AND SECURITY AGREEMENT
Page 6
Cash Management Services - any services provided from time to time
by Bank of America or any of its Affiliates to any Borrower or Subsidiary
in connection with operating, collections, payroll, trust, or other
depository or disbursement accounts, including automatic clearinghouse,
controlled disbursement, depository, electronic funds transfer,
information reporting, lockbox, stop payment, overdraft, and/or wire
transfer services.
CERCLA - the Comprehensive Environmental Response Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.).
Change of Control - the occurrence of any of the following: (a) the
adoption of a plan relating to the liquidation or dissolution of any
Borrower, (b) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
Person, other than a Permitted Holder, becomes the Beneficial Owner,
directly or indirectly, of more than 35.0% of the Voting Stock of Amkor,
measured by voting power rather than number of shares, and such percentage
represents more than the aggregate percentage of the Voting Stock of
Amkor, measured by voting power rather than number of shares, as to which
any Permitted Holder is the Beneficial Owner, or (c) the first date during
any consecutive two year period on which a majority of the members of the
board of directors of Amkor are not Continuing Directors. For purposes of
this definition, any transfer of an Equity Interest of any Person that was
formed for the purpose of acquiring Voting Stock of Amkor will be deemed
to be a transfer of such portion of Voting Stock as corresponds to the
portion of the equity of such Person that has been so transferred.
Chattel Paper - as defined in the UCC.
Claims - all liabilities, obligations, losses, damages, penalties,
judgments, proceedings, costs, and expenses of any kind (including
remedial response costs, reasonable attorneys' fees, and Extraordinary
Expenses) at any time (including after Full Payment of the Obligations,
resignation or replacement of the Agent, or replacement of any Lender)
incurred by or asserted against any Indemnitee in any way relating to (a)
any Loan Documents or transactions relating thereto, (b) any action taken
or omitted to be taken by any Indemnitee in connection with any Loan
Documents, (c) the existence or perfection of any Liens, or realization
upon any Collateral, (d) exercise of any rights or remedies under any Loan
Documents or Applicable Law, or (e) failure by any Obligor to perform or
observe any terms of any Loan Document, in each case including all costs
and expenses relating to any investigation, litigation, arbitration, or
other proceeding (including an Insolvency Proceeding or appellate
proceedings), whether or not the applicable Indemnitee is a party thereto.
Closing Date - the date on which the initial Revolving Loans are
made under this Agreement.
Collateral - all Property described in Section 7.1, all Property
described in any Security Documents as security for any Obligations, and
all other Property that now or hereafter secures (or is intended to
secure) any Obligations.
LOAN AND SECURITY AGREEMENT
Page 7
Collateral Documents - for the purpose of interpretation of the
Intercreditor Agreement, this Agreement, the Security Documents, and all
other documents, instruments, and agreements now or hereafter securing (or
given with the intent to secure) any Obligations.
Commercial Tort Claim - as defined in the UCC.
Compliance Certificate - a Compliance Certificate to be provided by
the Borrowers to the Agent pursuant to this Agreement, in the form of
Exhibit D, and all supporting schedules.
Consolidated Cash Flow - with respect to any Person for any period,
the Consolidated Net Income of such Person for such period, plus (a) an
amount equal to any extraordinary loss, plus any net loss realized in
connection with an Asset Sale, to the extent such losses were deducted in
computing such Consolidated Net Income, plus (b) provision for taxes based
on income or profits of such Person and its Restricted Subsidiaries for
such period, to the extent that such provision for taxes was deducted in
computing such Consolidated Net Income, plus (c) consolidated interest
expense of such Person and its Restricted Subsidiaries for such period,
whether paid or accrued and whether or not capitalized (including, without
limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect
to Attributable Debt, commissions, discounts, and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings,
and net payments, if any, pursuant to Hedging Obligations), to the extent
that any such expense was deducted in computing such Consolidated Net
Income, plus (d) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period), and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents an
accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of
such Person and its Restricted Subsidiaries for such period to the extent
that such depreciation, amortization, and other non-cash expenses were
deducted in computing such Consolidated Net Income, plus (e) non-cash
items (other than any non-cash items that will require cash payments in
the future or that relate to foreign currency translation) decreasing such
Consolidated Net Income for such period, other than items that were
accrued in the ordinary course of business, in each case, on a
consolidated basis and determined in accordance with GAAP, minus (f)
non-cash items (other than any non-cash items that will require cash
payments in the future or that relate to foreign currency translation)
increasing such Consolidated Net Income for such period, other than items
that were accrued in the ordinary course of business, in each case, on a
consolidated basis and determined in accordance with GAAP. Notwithstanding
the foregoing, the provision for taxes based on the income or profits of,
and the depreciation and amortization and other non-cash charges of, a
Restricted Subsidiary of Amkor shall be added to Consolidated Net Income
to compute Consolidated Cash Flow of Amkor only to the extent that a
corresponding amount would be permitted at the date of determination to be
dividended to Amkor by such Restricted Subsidiary without prior approval
(that has not
LOAN AND SECURITY AGREEMENT
Page 8
been obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules, and governmental
regulations applicable to that Subsidiary or its stockholders.
Consolidated Interest Expense - with respect to any Person for any
period, the sum, without duplication, of (a) the consolidated interest
expense of such Person and its Restricted Subsidiaries for such period,
whether paid or accrued, including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net payments, if
any, pursuant to Hedging Obligations, plus (b) the consolidated interest
of such Person and its Restricted Subsidiaries that was capitalized during
such period, plus (c) interest actually paid by Amkor or any Restricted
Subsidiary under any Guarantee of Indebtedness of another Person, plus (d)
the product of all dividend payments, whether or not in cash, on any
series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable
solely in Equity Interests of Amkor (other than Disqualified Stock) or to
Amkor or a Restricted Subsidiary of Amkor.
Consolidated Interest Expense Coverage Ratio - with respect to any
specified Person for any period, the ratio of the Consolidated Cash Flow
of such Person and its Restricted Subsidiaries for such period to the
Consolidated Interest Expense of such Person for such period. In the event
that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, or redeems any Indebtedness (other than the
Obligations) or issues or redeems preferred stock subsequent to the
commencement of the period for which the Consolidated Interest Expense
Coverage Ratio is being calculated but prior to the date on which the
event for which the calculation of the Consolidated Interest Expense
Coverage Ratio is made (the "Calculation Date"), then the Consolidated
Interest Expense Coverage Ratio shall be calculated giving pro forma
effect to such incurrence, assumption, Guarantee, or redemption of
Indebtedness, or such issuance or redemption of preferred stock, as if the
same had occurred at the beginning of the applicable four-quarter
reference period. In addition, for purposes of calculating the
Consolidated Interest Expense Coverage Ratio: (a) acquisitions that have
been made by the specified Person or any of its Restricted Subsidiaries,
including through mergers or consolidations and including any related
financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation
Date shall be deemed to have occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference period
shall be calculated without giving effect to clause (c) of the proviso set
forth in the definition of Consolidated Net Income, (b) the Consolidated
Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to
the Calculation Date, shall be excluded, and (c) the Consolidated Interest
Expense attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to
the Calculation Date, shall be excluded, but only to the extent that the
obligations giving rise to such Consolidated Interest Expense
LOAN AND SECURITY AGREEMENT
Page 9
will not be obligations of the specified Person or any of its Restricted
Subsidiaries following the Calculation Date.
Consolidated Net Assets - with respect to any specified Person as of
any date, the total assets of such Person as of such date less (a) the
total liabilities of such Person as of such date, (b) the amount of any
Disqualified Stock as of such date, and (c) any minority interests
reflected on the balance sheet of such Person as of such date.
Consolidated Net Income - with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP; provided that: (a) the Net Income (but
not loss) of any Person that is not a Restricted Subsidiary or that is
accounted for by the equity method of accounting shall be included only to
the extent of the amount of dividends or distributions paid in cash to the
specified Person or a Restricted Subsidiary thereof, (b) the Net Income of
any Restricted Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has
not been obtained) or, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, (c) the Net Income (but not loss) of any
Unrestricted Subsidiary shall be excluded, whether or not distributed to
the specified Person or one of its Subsidiaries, and (d) the cumulative
effect of a change in accounting principles shall be excluded.
Contingent Obligation - any obligation of a Person arising from a
guaranty, indemnity, or other assurance of payment or performance of any
Indebtedness, lease, dividend, or other obligation (as used in this
definition, "primary obligations") of another obligor (as used in this
definition, "primary obligor") in any manner including any obligation of
such Person under any (a) guaranty, endorsement, co-making, or sale with
recourse of an obligation of a primary obligor, (b) obligation to make
take-or-pay or similar payments regardless of nonperformance by any other
party to an agreement, and (c) arrangement (i) to purchase any primary
obligation or security therefor, (ii) to supply funds for the purchase or
payment of any primary obligation, (iii) to maintain or assure working
capital, equity capital, net worth, or solvency of the primary obligor,
(iv) to purchase Property or services for the purpose of assuring the
ability of the primary obligor to perform a primary obligation, or (v)
otherwise to assure or hold harmless the holder of any primary obligation
against loss in respect thereof. The amount of any Contingent Obligation
shall be deemed to be the stated or determinable amount of the primary
obligation (or, if less, the maximum amount for which such Person may be
liable under the instrument evidencing the Contingent Obligation) or, if
not stated or determinable, the maximum reasonably anticipated liability
with respect thereto.
Continuing Directors - as of any date of determination, any member
of the board of directors of Amkor who (a) was a member of such board of
directors on the Closing Date or (b) was nominated for election or elected
to such board of directors with the approval of a majority of the
Continuing Directors who were members of such board at
LOAN AND SECURITY AGREEMENT
Page 10
the time of such nomination or election.
Convertible Subordinated Notes - Amkor's 5.75% Convertible
Subordinated Notes due 2006, issued pursuant to the Convertible
Subordinated Notes (2006) Indenture, Amkor's 5% Convertible Subordinated
Notes due 2007, issued pursuant to the Convertible Subordinated Notes
(2007) Indenture, and Amkor's 6 1/4% Convertible Subordinated Notes due
2013, issued pursuant to the Convertible Subordinated Notes (2013)
Indenture.
Convertible Subordinated Notes (2006) Indenture - that certain
Indenture between Amkor and U.S. Bank National Association (as successor
to State Street Bank and Trust Company) as Trustee, dated as of May 25,
2001, as such Indenture may be amended or supplemented from time to time,
relating to Amkor's 5.75% Convertible Subordinated Notes due June 1, 2006.
Convertible Subordinated Notes (2007) Indenture - that certain
Indenture between Amkor and U.S. Bank National Association (as successor
to State Street Bank and Trust Company) as Trustee, dated as of March 22,
2000, as such Indenture may be amended or supplemented from time to time,
relating to Amkor's 5.75% Convertible Subordinated Notes due March 15,
2007.
Convertible Subordinated Notes (2013) Indenture - that certain
Indenture between Amkor and U.S. Bank National Association as Trustee,
dated as of November 18, 2005, as such Indenture may be amended or
supplemented from time to time, relating to Amkor's 6 1/4% Convertible
Subordinated Notes due December 1, 2013.
Convertible Subordinated Notes Indentures - the Convertible
Subordinated Notes (2006) Indenture, the Convertible Subordinated Notes
(2007) Indenture, and the Convertible Subordinated Notes (2013) Indenture.
Copyright Security Agreement - each copyright security agreement
pursuant to which an Obligor grants to the Agent, for the benefit of the
Secured Parties, a Lien on such Obligor's interests in copyrights, as
security for the Obligations.
Credit Facilities - with respect to Amkor or any Subsidiary, one or
more debt facilities or commercial paper facilities with banks or other
institutional lenders providing for revolving credit loans, term loans,
notes, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such
lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in
whole or in part from time to time.
CWA - the Clean Water Act (33 U.S.C. Sections 1251 et seq.).
Default - an event or condition that, with the lapse of time or
giving of notice, would constitute an Event of Default.
LOAN AND SECURITY AGREEMENT
Page 11
Default Rate - for any Obligation (including, to the extent
permitted by law, interest not paid when due), 2.00%, plus the interest
rate otherwise applicable thereto.
Deposit Account - as defined in the UCC.
Deposit Account Control Agreements - an agreement (a) in form and
substance satisfactory to the Agent, (b) between the Agent and a
depository institution which maintains a Deposit Account for a Borrower,
and (c) which establishes control of such Deposit Account for purposes of
perfection of the Agent's Lien in such Deposit Account and the funds held
therein.
Designated Account - a deposit account of the Borrowers established
with the Agent or an Affiliate of the Agent, into which the Agent shall
fund Revolving Loans hereunder.
Disqualified Stock - any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon
the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of
the holder thereof, in whole or in part, on or prior to the date that is
91 days after the Termination Date. Notwithstanding the preceding
sentence, any Equity Interest that would constitute Disqualified Stock
solely because the holders thereof have the right to require Amkor to
repurchase such Equity Interest upon the occurrence of a change of control
or an asset sale shall not constitute Disqualified Stock if the terms of
such Equity Interest provide that Amkor may not repurchase or redeem any
such Equity Interest pursuant to such provisions unless such repurchase or
redemption complies with Section 10.2.2.
Distribution - (a) any declaration or payment of a distribution,
interest, or dividend on any Equity Interest (other than payment-in-kind);
(b) any distribution, advance, or repayment of Indebtedness to a holder of
Equity Interests; or (c) any purchase, redemption, or other acquisition or
retirement for value of any Equity Interest.
Document - as defined in the UCC.
Documentation Agent - Wachovia Capital Finance Corporation
(Western), a California corporation.
Dollars - lawful money of the United States.
Domestic Subsidiary - a Restricted Subsidiary that is (a) formed
under the laws of the United States or a state or territory thereof or (b)
as of the date of determination, treated as a domestic entity or a
partnership or a division of a domestic entity for United States federal
income tax purposes, and, in either case, is not owned, directly or
indirectly, by an entity that is not described in clause (a) or clause (b)
preceding.
LOAN AND SECURITY AGREEMENT
Page 12
Dominion Account - a special account established by the Borrowers at
Bank of America or another bank acceptable to the Agent, over which,
subject to the terms of Section 8.2.4, the Agent has exclusive control for
withdrawal purposes.
Eligible Account - an Account owing to a Borrower, excluding
Accounts owing to Unitive and to UEI until the Agent has completed an
audit and field examination with respect to such Accounts to its
satisfaction, that arises in the Ordinary Course of Business from the sale
of goods or rendition of services, is payable in Dollars and is deemed by
the Agent, in its reasonable credit judgment, to be an Eligible Account.
Without limiting the foregoing, no Account shall be an Eligible Account if
(a) it is unpaid for more than 60 days after the original due date, or
more than 90 days after the original invoice date, (b) 50.0% or more of
the Accounts owing by the Account Debtor are not Eligible Accounts or
Eligible Foreign Accounts under any other provision of this definition or
the definition of Eligible Foreign Accounts, (c) when aggregated with
other Accounts owing by the Account Debtor and its Affiliates, it exceeds
15.0% of the aggregate Eligible Accounts and Eligible Foreign Accounts (or
such higher percentage as the Agent, with the consent of the Requisite
Lenders, may establish for the Account Debtor and its Affiliates from time
to time), (d) it does not conform with a covenant or representation
herein, (e) it is owing by a creditor or supplier, or is otherwise subject
to a offset, counterclaim, dispute, deduction, discount, recoupment,
reserve, defense, chargeback, credit, or allowance (but ineligibility
shall be limited to the amount thereof), (f) an Insolvency Proceeding has
been commenced by or against the Account Debtor, or the Account Debtor has
failed, has suspended, or ceased doing business, is liquidating,
dissolving, or winding up its affairs, or is not Solvent, (g) the Account
Debtor is organized or has its principal offices or assets outside the
United States, (h) it is owing by a Government Authority, (i) it is not
subject to a duly perfected, first priority Lien in favor of the Agent, or
is subject to any other Lien (except a Permitted Accounts Lien), (j) the
goods giving rise to it have not been delivered to and accepted by the
Account Debtor, the services giving rise to it have not been accepted by
the Account Debtor, or it otherwise does not represent a final sale, (k)
it is evidenced by Chattel Paper or an Instrument of any kind, or has been
reduced to judgment, (l) its payment has been extended, the Account Debtor
has made a partial payment, or it arises from a sale on a cash-on-delivery
basis, (m) it arises from a sale to an Affiliate, or from a sale on a
xxxx-and-hold, guaranteed sale, sale-or-return, sale-on-approval,
consignment, or other repurchase or return basis, (n) it represents a
progress billing or retainage, (o) it includes a billing for interest,
fees, or late charges, but ineligibility shall be limited to the extent of
such billing, or (p) it arises from a retail sale to a Person who is
purchasing for personal, family, or household purposes.
Eligible Assignee - a Person that is (a) a Lender, a United
States-based Affiliate of a Lender, or an Approved Fund, (b) any other
financial institution approved by the Agent and the Borrower Agent (which
approval by the Borrower Agent shall not be unreasonably withheld or
delayed, and shall be deemed given if no objection is made within two
Business Days after notice of the proposed assignment), that is organized
under the laws of the United States or any state or district thereof, has
total assets in excess of $5,000,000,000, extends asset-based lending
facilities in its ordinary course of business, and whose becoming an
assignee would not constitute a prohibited transaction
LOAN AND SECURITY AGREEMENT
Page 13
under Section 4975 of ERISA or any other Applicable Law, and (c) during
any Event of Default, any Person acceptable to the Agent in its
discretion.
Eligible Foreign Account - an Account owing to a Borrower, excluding
Accounts owing to Unitive and to UEI until the Agent has completed an
audit and field examination with respect to such Accounts to its
satisfaction, from an Account Debtor that is organized or has its
principal offices or assets outside the United States, that (a) arises in
the Ordinary Course of Business from the sale of goods or rendition of
services, (b) is payable in Dollars, (c) is owing from an Account Debtor
listed on Schedule 1.1B or is owing from an Account Debtor acceptable to
the Agent and the Requisite Lenders, each in their discretion, (d) meets
all of the requirements in clause (a) through clause (p) of the definition
of Eligible Accounts other than clause (g) thereof, and (e) is deemed by
the Agent, with the consent of the Requisite Lenders, each in their
reasonable credit judgment, to be an Eligible Foreign Account; provided
that, in any event, without the consent of the Agent and the Requisite
Lenders, any such Accounts owing from the Account Debtors specified in
Part II of Schedule 1.1B, or any of their respective Affiliates when
aggregated with other Accounts owing by such Account Debtors and their
respective Affiliates which exceed 10.0% of the aggregate Eligible
Accounts and Eligible Foreign Accounts shall not be Eligible Foreign
Accounts.
Enforcement Action - any action to enforce any Obligations or Loan
Documents or to realize upon any Collateral (whether by judicial action,
self-help, notification of Account Debtors, exercise of setoff or
recoupment, or otherwise).
Environmental Laws - all Applicable Laws (including all programs,
permits, and guidance promulgated by regulatory agencies), relating to
public health (but excluding occupational safety and health, to the extent
regulated by OSHA) or the protection or pollution of the environment,
including CERCLA, RCRA, and CWA.
Environmental Notice - any written notice from any Governmental
Authority of any possible noncompliance with, investigation of a possible
violation of, litigation relating to, or potential fine or liability under
any Environmental Law, or with respect to any Environmental Release,
environmental pollution or hazardous materials, including any complaint,
summons, citation, order, claim, demand or request for correction,
remediation, or otherwise.
Environmental Release - a release as defined in CERCLA or under any
other Environmental Law.
Equipment - as defined in the UCC, including all machinery,
apparatus, equipment, fittings, furniture, fixtures, motor vehicles, and
other tangible personal Property (other than Inventory), and all parts,
accessories, and special tools therefor, and accessions thereto.
Equity Interest - the interest of any (a) shareholder in a
corporation, (b) partner in a partnership (whether general, limited,
limited liability, or joint venture), (c) member in a limited liability
company, (d) any Person holding warrants, options, or other rights to
LOAN AND SECURITY AGREEMENT
Page 14
acquire any equity security or ownership interest (but excluding any debt
security that is convertible into, or exchangeable for, any equity
security or ownership interest), or (e) other Person having any other form
of equity security or ownership interest that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
ERISA - the Employee Retirement Income Security Act of 1974.
Event of Default - as defined in Section 11.
Exchange Act - the Securities Exchange Act of 1934.
Excluded Domestic Subsidiaries - Guardian Assets, Inc., a Delaware
corporation, Amkor International Holdings, a company organized under the
laws of the Cayman Islands (also existing as Amkor International Holdings,
LLC, a Delaware limited liability company), Amkor Technology Limited, a
company organized under the laws of the Cayman Islands, P-Four, Inc., a
company organized under the laws of the Philippines (also existing as
P-Four, LLC, a Delaware limited liability company), and Amkor Technology
Philippines, Inc., a corporation organized under the laws of the
Philippines.
Excluded Taxes - Taxes on the overall net income or gross receipts
of a Lender imposed by the jurisdiction in which such Lender's principal
executive office is located.
Existing Indebtedness - Indebtedness of Amkor and its Restricted
Subsidiaries in existence on the date of this Agreement, until such
amounts are repaid.
Extraordinary Expenses - all costs, expenses, or advances that the
Agent may incur during a Default or Event of Default, or during the
pendency of an Insolvency Proceeding of an Obligor, including those
relating to (a) any audit, inspection, repossession, storage, repair,
appraisal, insurance, manufacture, preparation or advertising for sale,
sale, collection, or other preservation of or realization upon any
Collateral, (b) any action, arbitration, or other proceeding (whether
instituted by or against the Agent, any Lender, any Obligor, any
representative of creditors of an Obligor, or any other Person) in any way
relating to any Collateral (including the validity, perfection, priority,
or avoidability of the Agent's Liens with respect to any Collateral), any
Loan Documents, or the validity, allowance, or amount of any Obligations,
including any lender liability or other Claims asserted against the Agent
or any Lender, (c) the exercise, protection, or enforcement of any rights
or remedies of the Agent in, or the monitoring of, any Insolvency
Proceeding, (d) settlement or satisfaction of any taxes, charges, or Liens
with respect to any Collateral, (e) any Enforcement Action, (f)
negotiation and documentation of any modification, waiver, workout,
restructuring, or forbearance with respect to any Loan Documents or
Obligations, or (g) Protective Advances. Such costs, expenses, and
advances include transfer fees, taxes, storage fees, insurance costs,
permit fees, utility reservation and standby fees, legal fees, appraisal
fees, brokers' fees and commissions, auctioneers' fees and commissions,
accountants' fees, environmental study fees, wages and salaries paid to
employees of any Obligor or independent contractors in liquidating any
Collateral, and travel expenses.
LOAN AND SECURITY AGREEMENT
Page 15
Federal Funds Rate - a fluctuating interest rate per annum equal to
the weighted average of the rates on overnight federal funds transactions
among members of the Federal Reserve System arranged by federal funds
brokers, as published for the applicable day (or, if not a Business Day,
for the preceding Business Day) by the Federal Reserve Bank of New York,
or if such rate is not so published, the average of the quotations for
such day on such transactions as determined by the Agent.
Fee Letter - the fee letter agreement, dated as of the Closing Date,
between the Agent and the Borrowers.
Fiscal Quarter - each period of three months, the first of such
periods commencing on the first day of a Fiscal Year.
Fiscal Year - the fiscal year of the Borrowers and the Subsidiaries
for accounting and tax purposes, ending on December 31 of each year.
FLSA - the Fair Labor Standards Act of 1938.
Foreign Lender - any Lender that is organized under the laws of a
jurisdiction other than the laws of the United States, or any state or
district thereof.
Foreign Plan - any employee benefit plan or arrangement maintained
or contributed to by any Obligor or Subsidiary that is not subject to the
laws of the United States, or any employee benefit plan or arrangement
mandated by a government other than the United States for employees of any
Obligor or Subsidiary.
Foreign Subsidiary - a Subsidiary of Amkor that is not a Domestic
Subsidiary.
Foundry Agreement - that certain Foundry Agreement, dated as of
January 1, 1998, among Amkor, its predecessor company (Amkor
Electronics, Inc.), Amkor Technology Limited (f/k/a C.I.L. Limited),
Anam Semiconductor, Inc., and Anam USA, Inc., as the same may be
extended or renewed from time to time without alteration of the
material terms thereof.
Full Payment - with respect to any Obligations, (a) the full and
indefeasible cash payment thereof, including all interest, fees, and other
charges under any Loan Documents and including those accruing during an
Insolvency Proceeding (whether or not allowed in the proceeding), (b) if
such Obligations are LC Obligations or inchoate or contingent in nature,
Cash Collateralization thereof, and (c) a release of any Claims of the
Obligors against the Agent, the Lenders, and the Issuing Bank arising on
or before the payment date. The Revolving Loans shall not be deemed to
have been paid in full until the Revolving Commitments have expired or
been terminated.
GAAP - generally accepted accounting principles in the United States
in effect from time to time.
General Intangibles - as defined in the UCC, including choses in
action, causes of action, contract rights, company or other business
records, inventions, blueprints, designs,
LOAN AND SECURITY AGREEMENT
Page 16
patents, patent applications, trademarks, trademark applications, trade
names, trade secrets, service marks, goodwill, brand names, copyrights,
registrations, licenses, franchises, customer lists, permits, tax refund
claims, computer programs, operational manuals, internet addresses and
domain names, insurance refunds and premium rebates, all rights to
indemnification, and all other intangible Property of any kind.
Goods - as defined in the UCC.
Governmental Approvals - all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and required
reports to, all Governmental Authorities.
Governmental Authority - any federal, state, municipal, foreign, or
other governmental department, agency, commission, board, bureau, court,
tribunal, instrumentality, political subdivision, or other entity or
officer exercising executive, legislative, judicial, regulatory, or
administrative functions for or pertaining to any government or court, in
each case whether associated with the United States, a state, district, or
territory thereof, or a foreign entity or government.
Guarantee - a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, through letters of credit or
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
Guarantor Payment - as defined in Section 5.11.3.
Guarantors - Amkor, Unitive, UEI, and each other Person who
guarantees payment or performance of any Obligations.
Guaranty - each guaranty agreement executed by a Guarantor in favor
of the Agent.
Hedging Agreement - any transaction that provides for an interest
rate, foreign exchange, currency, commodity, credit, or equity swap, cap,
floor, collar, option, forward, cross right or obligation, or combination
thereof, or any transaction of a similar nature.
Hedging Obligations - with respect to any Person, the indebtedness,
liabilities, and obligations of such Person under Hedging Agreement.
Indebtedness - with respect to any Person, any indebtedness of such
Person, including Contingent Obligations, in respect of (a) borrowed
money, (b) bonds, notes, debentures, or similar instruments or letters of
credit (or reimbursement agreements in respect thereof), (c) banker's
acceptances, (d) Capital Lease Obligations, (e) the balance deferred and
unpaid of the purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable, and (f) Hedging
Obligations, if and to the extent any of such indebtedness (other than
letters of credit and Hedging Obligations) would appear as a liability on
a balance sheet of the specified Person prepared in
LOAN AND SECURITY AGREEMENT
Page 17
accordance with GAAP. With respect to the Borrowers, all Obligations,
other than Bank Product Debt not covered by clause (a) through clause (f)
preceding, shall be included in the term "Indebtedness". In addition, the
term "Indebtedness" includes all Indebtedness of others secured by a Lien
on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person measured as the lesser of the fair market
value of the assets of such Person so secured or the amount of such
Indebtedness) and, to the extent not otherwise included, the Guarantee by
such Person of any indebtedness of any other Person. The amount of any
Indebtedness outstanding as of any date shall be the accreted value
thereof, in the case of any Indebtedness issued with original issue
discount. In addition, the amount of any Indebtedness shall also include
the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Restricted Subsidiary of Amkor, any preferred stock of
such Restricted Subsidiary.
Increase Effective Date - as defined in Section 2.1.7.
Indemnitees - the Agent Indemnitees, the Lender Indemnitees, the
Issuing Bank Indemnitees, and the Bank of America Indemnitees.
Indentures - the Convertible Subordinated Notes Indentures, the
Senior Notes Indentures, and the Senior Subordinated Notes Indenture.
Insolvency Proceeding - any case or proceeding commenced by or
against a Person under any state, federal, or foreign law for, or any
agreement of such Person to, (a) the entry of an order for relief under
the Bankruptcy Code, or any other insolvency, debtor relief, or debt
adjustment law, (b) the appointment of a receiver, trustee, liquidator,
administrator, conservator, or other custodian for such Person or any part
of its Property, or (c) an assignment or trust mortgage for the benefit of
creditors.
Instrument - as defined in the UCC.
Insurance Assignment - each collateral assignment of insurance
pursuant to which an Obligor assigns to the Agent, for the benefit of the
Secured Parties, such Obligor's rights under business interruption or
other insurance policies as the Agent deems appropriate, as security for
the Obligations.
Intellectual Property - (a) all intellectual and similar Property of
a Person, including inventions, designs, patents, patent applications,
copyrights, trademarks, service marks, trade names, trade secrets,
confidential or proprietary information, customer lists, know-how,
software, and databases; (b) all embodiments or fixations thereof and all
related documentation, registrations, and franchises; (c) all books and
records describing or used in connection with the foregoing; and (d) all
licenses or other rights to use any of the foregoing.
Intellectual Property Claim - any claim or assertion (whether in
writing, by suit, or otherwise) that a Borrower's or a Subsidiary's
ownership, use, marketing, sale, or distribution of any Inventory,
Equipment, Intellectual Property, or other Property violates another
Person's Intellectual Property.
LOAN AND SECURITY AGREEMENT
Page 18
Intellectual Property Rights Licensing Agreement - that certain
Intellectual Property Rights Licensing Agreement, dated as of May 6, 1999,
by and between Amkor and Anam Semiconductor, Inc. in connection with the
Asset Purchase Agreement, as such agreement may be extended or renewed
from time to time without alteration of the material terms thereof.
Intercreditor Agreement - the Intercreditor Agreement, dated
concurrently herewith, among the Agent (as the "Senior Agent" thereunder),
for the benefit of the Agent and the Lenders (as the holders of the
"Senior Obligations" thereunder), Citicorp North America, Inc. (in its
capacities as the administrative agent and collateral agent for the
"Junior Parties" (as defined therein), Amkor, Unitive, and UEI (Amkor,
Unitive, and UEI each being party thereto as a "Borrower" (as defined
therein) and a "Loan Party" (as defined therein)), in form and substance
satisfactory to the Agent.
Interest Period - as defined in Section 3.1.3.
Inventory - as defined in the UCC, including (a) all goods intended
for sale, lease, display, or demonstration, (b) all work in process, and
(c) all raw materials, and other materials and supplies of any kind that
are or could be used in connection with the manufacture, printing,
packing, shipping, advertising, sale, lease, or furnishing of such goods,
or otherwise used or consumed in a Borrower's business (but excluding
Equipment).
Investments - with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of direct or
indirect loans (including Guarantees of Indebtedness or other
obligations), advances or capital contributions (excluding commission,
travel, and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities,
together with all items that are or would be classified as investments on
a balance sheet prepared in accordance with GAAP. If Amkor or any
Restricted Subsidiary of Amkor sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary of Amkor such
that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of Amkor, Amkor shall be deemed to have
made an Investment on the date of any such sale or disposition equal to
the fair market value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in
Section 10.2.2.
Investment Property - as defined in the UCC, including all
securities (whether certificated or uncertificated), security
entitlements, securities accounts, commodity contracts, and commodity
accounts.
Issuing Bank - Bank of America or an Affiliate of Bank of America.
Issuing Bank Indemnitees - the Issuing Bank and its officers,
directors, employees, Affiliates, agents, and attorneys.
LC Application - an application by the Borrower Agent to the Issuing
Bank for issuance of a Letter of Credit, in form and substance
satisfactory to the Issuing Bank.
LOAN AND SECURITY AGREEMENT
Page 19
LC Conditions - the following conditions necessary for issuance of a
Letter of Credit: (a) each of the conditions set forth in Section 6; (b)
after giving effect to such issuance, total LC Obligations do not exceed
$25,000,000, no Overadvance exists and, if no Revolving Loans are
outstanding, the LC Obligations do not exceed the Borrowing Base (without
giving effect to the LC Reserve for purposes of this calculation); (c) the
expiration date of such Letter of Credit is (i) no more than 365 days from
the date of issuance and (ii) at least 20 Business Days prior to the
Termination Date; (d) the Letter of Credit and payments thereunder are
denominated in Dollars; and (e) the form of the proposed Letter of Credit
is satisfactory to the Agent and the Issuing Bank in their discretion.
LC Documents - all documents, instruments, and agreements (including
LC Requests and LC Applications) delivered by the Borrowers or any other
Person to the Issuing Bank or the Agent in connection with issuance,
amendment, or renewal of, or payment under, any Letter of Credit.
LC Obligations - the sum (without duplication) of (a) all amounts
owing by the Borrowers for any drawings under Letters of Credit, (b) the
aggregate undrawn amount of all outstanding Letters of Credit, and (c) all
fees and other amounts owing with respect to Letters of Credit.
LC Request - a Letter of Credit Request from the Borrowers to the
Issuing Bank in form acceptable to the Issuing Bank in its discretion.
LC Reserve - the aggregate of all LC Obligations, other than (a)
those that have been Cash Collateralized and (b) if no Event of Default
exists, those constituting charges owing solely to the Issuing Bank.
Lender Indemnitees - the Lenders and their officers, directors,
employees, Affiliates, agents, and attorneys.
Lenders - as defined in the introductory paragraph of this
Agreement, including the Agent in its capacity as a provider of Agent
Advances and any other Person who hereafter becomes a "Lender" pursuant to
an Assignment and Acceptance.
Letter of Credit - any standby letter of credit issued by the
Issuing Bank for the account of a Borrower, or any indemnity, guarantee,
exposure transmittal memorandum, or similar form of credit support issued
by the Agent or the Issuing Bank for the benefit of a Borrower.
Letter-of-Credit Right - as defined in the UCC.
LIBOR Revolving Loan - a Revolving Loan that bears interest based on
Adjusted LIBOR.
License - any license or agreement under which an Obligor is
authorized to use Intellectual Property in connection with any
manufacture, marketing, distribution, or disposition of Collateral, any
use of Property or any other conduct of its business.
LOAN AND SECURITY AGREEMENT
Page 20
Licensor - any Person from whom an Obligor obtains the right to use
any Intellectual Property.
Lien - any Person's interest in Property securing an obligation owed
to, or a claim by, such Person, whether such interest is based on common
law, statute, or contract, including liens, security interests, pledges,
hypothecations, statutory trusts, reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases, and
other title exceptions and encumbrances affecting Property.
Lien Waiver - an agreement, in form and substance satisfactory to
the Agent, by which (a) for any material Collateral located on leased
premises, the lessor waives or subordinates any Lien it may have on the
Collateral, and agrees to permit the Agent to enter upon the premises and
remove the Collateral or to use the premises to store or dispose of the
Collateral, (b) for any Inventory held by a warehouseman, processor, or
freight forwarder, such Person waives or subordinates any Lien it may have
on the Inventory, agrees to hold any Documents in its possession relating
to the Inventory as agent for the Agent, and agrees to deliver the
Inventory to the Agent upon request, (c) for any Collateral held by a
bailee, such bailee acknowledges the Agent's Lien, waives or subordinates
any Lien such bailee may have on the Collateral, and agrees to deliver the
Collateral to the Agent upon request, and (d) for any Collateral subject
to a Licensor's Intellectual Property rights, the Licensor grants to the
Agent the right, vis-a-vis such Licensor, to enforce the Agent's Liens
with respect to the Collateral, including the right to dispose of the
Collateral with the benefit of the Intellectual Property, whether or not a
default exists under any applicable License.
Loan Account - the loan account established by each Lender on its
books pursuant to Section 5.8.
Loan Documents - this Agreement, the Other Agreements, and the
Security Documents.
Loan Year - each calendar year commencing on the Closing Date and
each anniversary of the Closing Date.
Margin Stock - as defined in Regulation U of the Board of Governors.
Material Adverse Effect - the effect of any event or circumstance
that, taken alone or in conjunction with other related events or
circumstances, has a material adverse effect on (a) the business,
operations, Properties, or condition (financial or otherwise) of any
Obligor, on the value of any material Collateral, on the enforceability of
any Loan Documents, or on the validity or priority of the Agent's Liens on
any Collateral, (b) the ability of any Obligor to perform any obligations
under the Loan Documents, including repayment of any Obligations, or (c)
the ability of the Agent or any Lender to enforce or collect any
Obligations or to realize upon any Collateral.
Material Contract - any agreement or arrangement to which a Borrower
is party (other than the Loan Documents) (a) that is deemed to be a
material contract under any securities law applicable to such Obligor,
including the Securities Act of 1933, (b) for
LOAN AND SECURITY AGREEMENT
Page 21
which breach, termination, nonperformance, or failure to renew could
reasonably be expected to have a Material Adverse Effect, or (c) that
relates to the Second Lien Credit Agreement, the Senior Notes, the Senior
Subordinated Notes, the Convertible Subordinated Notes, or any other
Indebtedness of such Obligor in excess of $10,000,000.
Minimum Availability Requirement - as of any date of determination,
an amount equal to the greater of (a) 25.0% of the amount determined on
such date pursuant to clause (b)(i) of the definition of Borrowing Base or
(b) $25,000,000.
Xxxxx'x - Xxxxx'x Investors Services, Inc., and any successor
thereto.
Mortgage - a mortgage, deed of trust, or deed to secure debt, in
form and substance reasonably satisfactory to the Agent, pursuant to which
Amkor grants to the Agent, for the benefit of the Secured Parties, Liens
upon all of Amkor's right, title, and interest in the Owned Real Estate,
as security for the Obligations.
Multiemployer Plan - as defined in Section 4001(a)(3) of ERISA.
Net Income - with respect to any Person, the net income (or loss) of
such Person and its Restricted Subsidiaries, determined in accordance with
GAAP and before any reduction in respect of preferred stock dividends,
excluding, however: (a) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection
with (i) any Asset Sale or (ii) the disposition of any securities by such
Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries, (b) any
extraordinary gain (but not loss), together with any related provision for
taxes on such extraordinary gain (but not loss), (c) any gain or loss
relating to foreign currency translation or exchange, and (iv) any income
or loss related to any discontinued operation.
Net Proceeds - the aggregate cash proceeds received by Amkor or any
of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition
of any non-cash consideration received in any Asset Sale), net of the
direct costs relating to such Asset Sale, including, without limitation,
legal, accounting, and investment banking fees, and sales commissions, and
any relocation expenses incurred as a result thereof, taxes paid or
payable as a result thereof, in each case after taking into account any
available tax credits or deductions and any tax sharing arrangements and
amounts required to be applied to the repayment of Indebtedness, other
than the Obligations, secured by a Lien on the asset or assets that were
the subject of such Asset Sale.
Non-Recourse Debt - Indebtedness (a) as to which neither Amkor nor
any of its Restricted Subsidiaries (i) provides credit support of any kind
(including any obligation that would constitute Indebtedness) or (ii) is
directly or indirectly liable as a guarantor or otherwise, other than in
the form of a Lien on the Equity Interests of an Unrestricted Subsidiary
held by Amkor or any Restricted Subsidiary in favor of any holder of
Non-Recourse Debt of such Unrestricted Subsidiary, (b) no default with
respect to which (including any rights that the holders thereof may have
to take enforcement action against
LOAN AND SECURITY AGREEMENT
Page 22
an Unrestricted Subsidiary) would permit, upon notice, lapse of time, or
both, any holder of any other Indebtedness (other than the Obligations or
the Term Loan) of Amkor or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity, and (c) as to which
the lenders have been notified in writing that they will not have any
recourse to the stock or assets of Amkor or any of its Restricted
Subsidiaries (other than against the Equity Interests of such Unrestricted
Subsidiary, if any).
Notes - each Revolving Note or other promissory note executed by the
Borrowers to evidence any Obligations.
Notice of Borrowing - a Notice of Borrowing to be submitted by the
Borrower Agent to request the funding of a Borrowing of Revolving Loans,
either electronically according to such procedures as may be established
by the Agent or in the form of Exhibit B.
Notice of Conversion/Continuation - a Notice of
Conversion/Continuation to be submitted by the Borrower Agent to request a
conversion or continuation of any Revolving Loans as LIBOR Revolving
Loans, either electronically according to such procedures as may be
established by the Agent or in the form of Exhibit C.
Obligations - all (a) principal of and premium, if any, on the
Revolving Loans, (b) LC Obligations and other obligations of the Obligors
with respect to Letters of Credit, (c) interest, expenses, fees, and other
sums payable by the Obligors under the Loan Documents, (d) obligations of
the Obligors under any indemnity for Claims, (e) Extraordinary Expenses,
(f) Bank Product Debt, and (g) other Indebtedness, obligations, and
liabilities of any kind owing by the Obligors pursuant to the Loan
Documents, whether now existing or hereafter arising, whether evidenced by
a note or other writing, whether allowed in any Insolvency Proceeding,
whether arising from an extension of credit, issuance of a letter of
credit, acceptance, loan, guaranty, indemnification, or otherwise, and
whether direct or indirect, absolute or contingent, due or to become due,
primary or secondary, or joint or several.
Obligor - each Borrower, Guarantor, or other Person that is liable
for payment of any Obligations or that has granted a Lien in favor of the
Agent on such Borrower's, Guarantor's, or other Person's assets to secure
any Obligations.
Officer - with respect to any Person, the chairman of the board, the
chief executive officer, the president, the chief operating officer, the
chief financial officer, the treasurer, any assistant treasurer, the
controller, the secretary, or any vice president of such Person.
Officers' Certificate - a certificate signed on behalf of Amkor by
two Officers of Amkor, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of Amkor, in form and substance satisfactory to the
Agent.
LOAN AND SECURITY AGREEMENT
Page 23
Ordinary Course of Business - the ordinary course of business of any
Borrower or Subsidiary, consistent with past practices and undertaken in
good faith (and not for the purpose of evading any provision of a Loan
Document).
Organic Documents - with respect to any Person, its charter,
certificate, or articles of incorporation, bylaws, articles of
organization, limited liability agreement, operating agreement, members
agreement, shareholders agreement, partnership agreement, certificate of
partnership, certificate of formation, voting trust agreement, or similar
agreement or instrument governing the formation or operation of such
Person.
OSHA - the Occupational Safety and Hazard Act of 1970.
Other Agreement - each Note, LC Document, Fee Letter, Lien Waiver,
Intercreditor Agreement, Related Real Estate Document, Borrowing Base
Certificate, Compliance Certificate, financial statement, or report
delivered hereunder, that certain Postclosing Agreement executed
concurrently herewith among the Borrowers, the Lenders, and the Agent, or
any other document, instrument, or agreement (other than this Agreement, a
Security Document, or any of the items listed in clause (b) through clause
(d) of the definition of Related Real Estate Documents) now or hereafter
delivered by an Obligor or other Person to the Agent or a Lender in
connection with any transactions contemplated by the Loan Documents.
Overadvance - as defined in Section 2.1.5.
Overadvance Loan - a Base Rate Revolving Loan made when an
Overadvance exists or is caused by the funding thereof.
Owned Real Estate - that certain real property owned by Amkor
located at 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxx and 0000 X. Xxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxx, such property being more particularly described
in Schedule 1.1D.
Participant - as defined in Section 13.2.
Patent Security Agreement - each patent security agreement pursuant
to which an Obligor grants to the Agent, for the benefit of the Secured
Parties, a Lien on such Obligor's interests in patents, as security for
the Obligations.
Patriot Act - the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).
Payment Intangible - as defined in the UCC.
Payment Item - each check, draft, or other item of payment payable
to a Borrower, including those constituting proceeds of any Collateral.
Permitted Accounts Liens - any of the following Liens: (a) Liens in
favor of the Agent; (b) Liens for Taxes not yet due or being Properly
Contested; (c) statutory Liens
LOAN AND SECURITY AGREEMENT
Page 24
(other than Liens for Taxes or imposed under ERISA) arising in the
Ordinary Course of Business, but only if (i) payment of the obligations
secured thereby is not yet due or is being Properly Contested and (ii)
such Liens do not materially impair the value or use of the Property or
materially impair operation of the business of any Borrower or Subsidiary;
(d) Liens arising by virtue of a judgment or judicial order against any
Borrower or Subsidiary, or any Property of a Borrower or Subsidiary, as
long as such Liens are (i) in existence for less than 30 consecutive days
or being Properly Contested, and (ii) at all times junior to the Agent's
Liens; and (e) Liens to secure Indebtedness outstanding under the Second
Lien Credit Agreement.
Permitted Bank Debt - Indebtedness incurred by Amkor or any
Restricted Subsidiary other than a Foreign Subsidiary pursuant to the
Credit Facilities, any Receivables Program, any indenture, or one or more
other term loan and/or revolving credit or commercial paper facilities
(including any letter of credit subfacilities) entered into with
commercial banks and/or institutional lenders, and any replacement,
extension, renewal, refinancing or refunding thereof, but excluding the
Obligations and the Term Loan.
Permitted Business - the business of Amkor and its Subsidiaries,
taken as a whole, operated in a manner consistent with past operations,
and any business that is reasonably related thereto or supplements such
business or is a reasonable extension thereof.
Permitted Debt - as defined in Section 10.2.4(b).
Permitted Holder - each of Xxxxx X. Xxx and his estate, spouse,
siblings, ancestors, heirs, and lineal descendants, and spouses of any
such persons, the legal representatives of any of the foregoing, and the
trustee of any bona fide trust of which one or more of the foregoing are
the principal beneficiaries or the grantors, or any other Person that is
controlled by any of the foregoing.
Permitted Investments - (a) any Investment in Amkor or in a
Restricted Subsidiary, (b) any Investment in Cash Equivalents, (c) any
Investment by Amkor or any Restricted Subsidiary of Amkor in a Person, if
as a result of such Investment or in connection with the transaction
pursuant to which such Investment is made (i) such Person becomes a
Restricted Subsidiary of Amkor, or (ii) such Person is merged,
consolidated, or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, Amkor or a
Restricted Subsidiary of Amkor, (d) any Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made
pursuant to and in compliance with Section 10.2.5, (e) any acquisition of
assets solely in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of Amkor, (f) any Investment in connection with
Hedging Obligations, (g) any Investments received (i) in satisfaction of
judgments or (ii) as payment on a claim made in connection with any
bankruptcy, liquidation, receivership, or other insolvency proceeding, (h)
Investments in (i) prepaid expenses and negotiable instruments held for
collection, (ii) accounts receivable arising in the Ordinary Course of
Business (and Investments obtained in exchange or settlement of accounts
receivable for which Amkor
LOAN AND SECURITY AGREEMENT
Page 25
or any Restricted Subsidiary has determined that collection is not
likely), and (iii) lease, utility, and worker's compensation, performance,
and other similar deposits arising in the Ordinary Course of Business, (i)
any Strategic Investment; provided that the aggregate amount of all
Investments by Amkor and any Restricted Subsidiaries in Strategic
Investments shall not exceed $100,000,000, and (j) Investments purchased
or received in exchange for Permitted Investments existing as of the
Closing Date or made thereafter; provided that any additional
consideration provided by Amkor or any Restricted Subsidiary in such
exchange shall not be permitted pursuant to this clause (j); and provided,
further, that such purchased or exchanged Investments shall have a fair
market value (as determined by an Officer of Amkor unless such fair market
value exceeds $25,000,000 in which case, as determined by the board of
directors) equal to or exceeding the Permitted Investments exchanged
therefor; provided, further, that, notwithstanding the preceding, any
extension of credit or advance by Amkor or any of its Subsidiaries to a
customer or supplier of Amkor or its Subsidiaries shall not be a Permitted
Investment.
Permitted Liens - the following Liens on property of any Borrower
(a) Liens on the assets, excluding the Collateral, of any such Borrower
securing Permitted Bank Debt that was permitted by the terms of this
Agreement and the Second Lien Credit Agreement to be incurred and/or
securing the "Obligations" (as defined in the Second Lien Credit
Agreement); provided that such Liens securing Permitted Bank Debt shall be
Permitted Liens pursuant to this clause (a) only if, on the date of
incurrence of (i) any Permitted Bank Debt secured by such Liens or (ii)
any such Lien securing Permitted Bank Debt existing as of the closing date
of the Second Lien Credit Agreement, the outstanding aggregate principal
amount of all such Permitted Bank Debt and the "Obligations" (as defined
in the Second Lien Credit Agreement) which are secured by such Liens (of
any priority), other than Liens referred to in clause (ii) through clause
(xxi) of the definition of "Permitted Liens" in the Second Lien Credit
Agreement, granted by Amkor and its Restricted Subsidiaries does not
exceed, on a pro forma basis after giving effect to such incurrence, the
product of 2.25 times the Consolidated Cash Flow for Amkor's most recently
ended four full Fiscal Quarters for which internal financial statements
are available immediately preceding the date on which such Permitted Bank
Debt or such Lien is incurred, (b) Liens on the assets of any Foreign
Subsidiary securing Indebtedness and other obligations under Indebtedness
of such Foreign Subsidiary that were permitted by the terms of this
Agreement and the Second Lien Credit Agreement to be incurred, (c) Liens
in favor of Amkor or any Restricted Subsidiary; provided that any such
Lien on property of any Borrower shall not extend to any Collateral, (d)
Liens on property of a Person existing at the time such Person is merged
with or into or consolidated with any Borrower; provided that such Liens
were not incurred in contemplation of such merger or consolidation and do
not extend to any assets which constitute Collateral, (e) Liens on
property existing at the time of acquisition thereof by any Borrower;
provided that such Liens were not incurred in contemplation of such
acquisition and do not extend to any assets which constitute Collateral,
(f) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds, or other obligations of a like nature
incurred in the Ordinary Course of Business, (g) Liens to secure
obligations in respect of Indebtedness (including Capital Lease
Obligations) permitted by Section 10.2.4(b)(iv) covering only the assets
acquired with such Indebtedness, including
LOAN AND SECURITY AGREEMENT
Page 26
accessions, additions, parts, attachments, improvements, fixtures,
leasehold improvements, or proceeds, if any, related thereto, (h) Liens
existing on the closing date of the Second Lien Credit Agreement,
excluding Liens on Collateral other than the Owned Real Property, other
than those securing Permitted Bank Debt and "Obligations" (as defined in
the Second Lien Credit Agreement), (i) Liens for taxes, assessments, or
governmental charges or claims that are not yet delinquent or that are
being Properly Contested, (j) Liens imposed by law or arising by operation
of law, including, landlords', mechanics', carriers', warehousemen's,
materialmen's, suppliers', and vendors' Liens, Liens for master's and
crew's wages and other similar Liens, in each case which are incurred in
the Ordinary Course of Business for sums not yet delinquent or being
Properly Contested, (k) Liens incurred or pledges and deposits made in the
Ordinary Course of Business in connection with workers' compensation and
unemployment insurance and other types of social security, (l) Liens to
secure any extension, renewal, refinancing, or refunding (or successive
extensions, renewals, refinancings, or refundings), in whole or in part,
of any Indebtedness secured by Liens referred to in clause (d), clause
(e), clause (g), and clause (h) of this definition; provided that such
Liens do not extend to any other property of any Borrower and the
principal amount of the Indebtedness secured by such Lien is not
increased, (m) judgment Liens not giving rise to an Event of Default so
long as such Lien is adequately bonded and any appropriate legal
proceedings that may have been initiated for the review of such judgment,
decree, or order shall not have been finally terminated or the period
within which such proceedings may be initiated shall not have expired, (n)
Liens on property of a Borrower other than Collateral securing obligations
of a Borrower under Hedging Obligations permitted by Section
10.2.4(b)(vii) or any collateral for the Indebtedness to which such
Hedging Obligations relate, (p) Liens upon specific items of inventory or
other goods and proceeds securing such Borrower's obligations in respect
of banker's acceptances issued or credited for the account of such
Borrower to facilitate the purchase, shipment, or storage of such
inventory or goods, (q) Liens securing reimbursement obligations with
respect to commercial letters of credit which encumber documents and other
property relating to such letters of credit and products and proceeds
thereof, (r) Liens arising out of consignment or similar arrangements for
the sale of goods in the Ordinary Course of Business, (s) Liens in favor
of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods, (t)
Liens on property of a Borrower other than the Collateral securing other
Indebtedness not exceeding $10,000,000 at any time outstanding, (u) Liens
securing Permitted Refinancing Indebtedness, provided that such Liens do
not extend to any other property of such Borrower and the principal amount
of such Indebtedness secured by such Lien is not increased, (v) Liens on
the Equity Interests of Unrestricted Subsidiaries securing obligations of
Unrestricted Subsidiaries not otherwise prohibited by this Agreement and
the Second Lien Credit Agreement, and (w) the Liens specified in Schedule
1.1C.
Permitted Other Liens - the following Liens on property of any of
Amkor's Subsidiaries which is not a Borrower (a) Liens on the assets of
any such Restricted Subsidiary securing Permitted Bank Debt that was
permitted by the terms of this Agreement and the Second Lien Credit
Agreement to be incurred and/or securing the "Obligations" (as defined in
the Second Lien Credit Agreement); provided that such Liens securing
Permitted Bank Debt shall be Permitted Other Liens pursuant to this
LOAN AND SECURITY AGREEMENT
Page 27
clause (a) only if, on the date of incurrence of (i) any Permitted Bank
Debt secured by such Liens or (ii) any such Lien securing Permitted Bank
Debt existing as of the closing date of the Second Lien Credit Agreement,
the outstanding aggregate principal amount of all such Permitted Bank Debt
and the "Obligations" (as defined in the Second Lien Credit Agreement)
which are secured by such Liens (of any priority), other than Liens
referred to in clause (ii) through clause (xxi) of the definition of
"Permitted Liens" in the Second Lien Credit Agreement, granted by Amkor
and its Restricted Subsidiaries does not exceed, on a pro forma basis
after giving effect to such incurrence, the product of 2.25 times the
Consolidated Cash Flow for Amkor's most recently ended four full Fiscal
Quarters for which internal financial statements are available immediately
preceding the date on which such Permitted Bank Debt or such Lien is
incurred, (b) Liens on the assets of any Foreign Subsidiary securing
Indebtedness and other obligations under Indebtedness of such Foreign
Subsidiary that were permitted by the terms of this Agreement and the
Second Lien Credit Agreement to be incurred, (c) Liens in favor of Amkor
or any Restricted Subsidiary, (d) Liens on property of a Person existing
at the time such Person is merged with or into or consolidated with any
Subsidiary of Amkor which is not a Borrower; provided that such Liens were
not incurred in contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or
consolidated with such Subsidiary, (e) Liens on property existing at the
time of acquisition thereof by any Restricted Subsidiary of Amkor which is
not a Borrower; provided that such Liens were not incurred in
contemplation of such acquisition, (f) Liens to secure the performance of
statutory obligations, surety or appeal bonds, performance bonds, or other
obligations of a like nature incurred in the Ordinary Course of Business,
(g) Liens to secure obligations in respect of Indebtedness (including
Capital Lease Obligations) permitted by Section 10.2.4(b)(iv) covering
only the assets acquired with such Indebtedness, including accessions,
additions, parts, attachments, improvements, fixtures, leasehold
improvements, or proceeds, if any, related thereto, (h) Liens existing on
the closing date of the Second Lien Credit Agreement other than those
securing Permitted Bank Debt and "Obligations" (as defined in the Second
Lien Credit Agreement) (i) Liens securing obligations of a Restricted
Subsidiary of Amkor that is not a Borrower in respect of any Receivables
Program, (j) Liens for taxes, assessments, or governmental charges or
claims that are not yet delinquent or that are being Properly Contested,
(k) Liens imposed by law or arising by operation of law, including,
landlords', mechanics', carriers', warehousemen's, materialmen's,
suppliers', and vendors' Liens, Liens for master's and crew's wages and
other similar Liens, in each case which are incurred in the Ordinary
Course of Business for sums not yet delinquent or being Properly
Contested, (l) Liens incurred or pledges and deposits made in the Ordinary
Course of Business in connection with workers' compensation and
unemployment insurance and other types of social security, (m) Liens to
secure any extension, renewal, refinancing, or refunding (or successive
extensions, renewals, refinancings, or refundings), in whole or in part,
of any Indebtedness secured by Liens referred to in clause (d), clause
(e), clause (g), and clause (h) of this definition; provided that such
Liens do not extend to any other property of any Restricted Subsidiary of
Amkor and the principal amount of the Indebtedness secured by such Lien is
not increased, (n) judgment Liens not giving rise to an Event of Default
so long as such Lien is adequately bonded and any appropriate legal
proceedings that may have been initiated for the review of such judgment,
decree, or order shall not have been finally terminated
LOAN AND SECURITY AGREEMENT
Page 28
or the period within which such proceedings may be initiated shall not
have expired, (o) Liens securing obligations of a Restricted Subsidiary of
Amkor that is not a Borrower under Hedging Obligations permitted by
Section 10.2.4(b)(vii) or any collateral for the Indebtedness to which
such Hedging Obligations relate, (p) Liens upon specific items of
inventory or other goods and proceeds securing such Restricted Subsidiary
of Amkor's which is not a Borrower obligations in respect of banker's
acceptances issued or credited for the account of such Restricted
Subsidiary of Amkor which is not a Borrower to facilitate the purchase,
shipment, or storage of such inventory or goods, (q) Liens securing
reimbursement obligations with respect to commercial letters of credit
which encumber documents and other property relating to such letters of
credit and products and proceeds thereof, (r) Liens arising out of
consignment or similar arrangements for the sale of goods in the Ordinary
Course of Business, (s) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods, (t) Liens securing other
Indebtedness not exceeding $10,000,000 at any time outstanding, (u) Liens
securing Permitted Refinancing Indebtedness, provided that such Liens do
not extend to any other property of such Restricted Subsidiary which is
not a Borrower and the principal amount of such Indebtedness secured by
such Lien is not increased, and (v) Liens on the Equity Interests of
Unrestricted Subsidiaries securing obligations of Unrestricted
Subsidiaries not otherwise prohibited by this Agreement and the Second
Lien Credit Agreement.
Permitted Refinancing Indebtedness - any Indebtedness of Amkor or
any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease,
or refund other Indebtedness of Amkor or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided that: (a)
the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or
accreted value, if applicable), plus accrued interest or premium
(including any make-whole premium), if any, on, the Indebtedness so
extended, refinanced, renewed, replaced, defeased, or refunded (plus the
amount of reasonable expenses incurred in connection therewith), (b) such
Permitted Refinancing Indebtedness has a final maturity date later than
the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased, or
refunded; provided that if the original maturity date of such Indebtedness
is after the Termination Date, then such Permitted Refinancing
Indebtedness shall have a maturity at least 180 days after the Termination
Date, (c) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased, or refunded is subordinated in right of payment to the
Obligations, such Permitted Refinancing Indebtedness has a final maturity
date later than the Termination Date and is subordinated in right of
payment to the Obligations on terms at least as favorable to the Lenders
as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased, or refunded, and (d)
such Indebtedness is incurred either by Amkor or by the Restricted
Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased, or refunded.
LOAN AND SECURITY AGREEMENT
Page 29
Person - any individual, corporation, limited liability company,
partnership, joint venture, joint stock company, land trust, business
trust, unincorporated organization, Governmental Authority, or other
entity.
Plan - an employee pension benefit plan that is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of
the Internal Revenue Code and that is either (a) maintained by a Borrower
or Subsidiary for employees or (b) maintained pursuant to a collective
bargaining agreement or other arrangement under which more than one
employer makes contributions and to which a Borrower or Subsidiary is
making or accruing an obligation to make contributions or has within the
preceding five years made or accrued such contributions.
Pro Rata - with respect to any Lender, a percentage (expressed as a
decimal, rounded to the ninth decimal place) determined (a) while
Revolving Commitments are outstanding, by dividing the amount of such
Lender's Revolving Commitment by the aggregate amount of all Revolving
Commitments and (b) at any other time, by dividing the amount of such
Lender's Revolving Loans by the aggregate amount of all outstanding
Revolving Loans.
Properly Contested - with respect to any obligation of an Obligor,
(a) the obligation is subject to a bona fide dispute regarding amount or
the Obligor's liability to pay, (b) the obligation is being properly
contested in good faith by appropriate proceedings promptly instituted and
diligently pursued, (c) appropriate reserves have been established in
accordance with GAAP, (d) non-payment could not reasonably be expected to
have a Material Adverse Effect, nor result in forfeiture or sale of any
assets of the Obligor, (e) no Lien is imposed on assets of the Obligor,
and (f) if the obligation results from entry of a judgment or other order,
such judgment or order is stayed pending appeal or other judicial review.
Property - any interest in any kind of property or asset, whether
real, personal, or mixed, or tangible or intangible.
Protective Advances - as defined in Section 2.1.6.
Purchase Money Debt - (a) Indebtedness (other than the Obligations)
for payment of any of the purchase price of fixed assets, (b) Indebtedness
(other than the Obligations) incurred for the purpose of financing the
purchase price thereof, and (c) any renewals, extensions, replacements, or
refinancings (but not increases) thereof.
Purchase Money Lien - a Lien that secures Purchase Money Debt,
encumbering only the fixed assets acquired with such Indebtedness and
constituting a Capital Lease or a purchase money security interest under
the UCC.
Qualified Proceeds - any of the following or any combination of the
following: (a) any Cash Equivalents other than (i) currency of any
sovereign nation other than the United States and (ii) certificates of
deposit, eurodollar time deposits, bankers' acceptances, and overnight
bank deposits with any commercial bank organized under the laws of a
foreign country, (b) any liabilities (as would be shown on Amkor's or such
LOAN AND SECURITY AGREEMENT
Page 30
Restricted Subsidiary's balance sheet if prepared in accordance with GAAP
on the date of the corresponding Asset Sale) of Amkor or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by
their terms subordinated to the Obligations) that are assumed by the
transferee of any such assets pursuant to a customary novation agreement
that releases or indemnifies Amkor or such Restricted Subsidiary from
further liability, (c) any securities, notes, or other obligations
received by Amkor or any such Restricted Subsidiary from such transferee
that are converted by Amkor or such Restricted Subsidiary into cash within
90 days after such Asset Sale (to the extent of the cash received in that
conversion), (d) long-term assets that are used or useful in a Permitted
Business, and (e) all or substantially all of the assets of, or a majority
of the voting Equity Interests of, any Permitted Business; provided that
in the case of clause (d) and clause (e) preceding, the Asset Sale
transaction shall be with a non-Affiliate and the amount of long-term
assets or voting Equity Interests received in the Asset Sale transaction
shall not exceed 10.0% of the consideration received.
RCRA - the Resource Conservation and Recovery Act (42 U.S.C.
Sections 6991-6991i).
Real Estate - all right, title, and interest (whether as owner,
lessor, or lessee) in any real Property or any buildings, structures,
parking areas, or other improvements thereon.
Receivables Program - with respect to any Person, an agreement or
other arrangement or program providing for the advance of funds to such
Person against the pledge, contribution, sale, or other transfer of
encumbrances of Receivables Program Assets of such Person or such Person
and/or one or more of its Subsidiaries.
Receivables Program Assets - all of the following property and
interests in property, including any undivided interest in any pool of any
such property or interests, whether now existing or existing in the future
or hereafter arising or acquired: (a) accounts; (b) accounts receivable,
general intangibles, instruments, contract rights, documents, and chattel
paper (including, without limitation, all rights to payment created by or
arising from sales of goods, leases of goods, or the rendition of
services, no matter how evidenced, whether or not earned by performance);
(c) all unpaid seller's or lessor's rights (including, without limitation,
rescission, replevin, reclamation, and stoppage in transit) relating to
any of the foregoing or arising therefrom; (d) all rights to any goods or
merchandise represented by any of the foregoing (including, without
limitation, returned or repossessed goods); (e) all reserves and credit
balances with respect to any such accounts receivable or account debtors;
(f) all letters of credit, security, or Guarantees of any of the
foregoing; (g) all insurance policies or reports relating to any of the
foregoing; (h) all collection or deposit accounts relating to any of the
foregoing; (i) all books and records relating to any of the foregoing; (j)
all instruments, contract rights, chattel paper, documents, and general
intangibles relating to any of the foregoing; and (k) all proceeds of any
of the foregoing.
Regulation D - Regulation D of the Board of Governors.
LOAN AND SECURITY AGREEMENT
Page 31
Reimbursement Date - as defined in Section 2.3.2.
Related Real Estate Documents - with respect to the Owned Real
Estate, the following, in form and substance satisfactory to the Agent,
(a) such assignments of leases, estoppel letters, attornment agreements,
consents, waivers, and releases as the Agent may require with respect to
other Persons having an interest in the Owned Real Estate, (b) flood
insurance in an amount, with endorsements and by an insurer, acceptable to
the Agent if the Owned Real Estate is within a flood plain, (c) to the
extent required by this Agreement and requested by the Agent, any
appraisal of the Owned Real Estate, prepared by an appraiser acceptable to
the Agent, in form satisfactory to the Agent, and (d) to the extent
required by the Mortgage or this Agreement and requested by the Agent, any
environmental assessment received by the Agent, prepared by an
environmental engineer acceptable to the Agent, and accompanied by such
reports, certificates, studies, or data as the Agent may reasonably
require, in form reasonably satisfactory to the Agent.
Report - as defined in Section 12.2.3.
Reportable Event - any event set forth in Section 4043(b) of ERISA.
Requisite Lenders - Lenders (subject to Section 4.2) having (a)
Revolving Commitments in excess of 50.0% of the aggregate Revolving
Commitments and (b) if the Revolving Commitments have terminated,
Revolving Loans in excess of 50.0% of all outstanding Revolving Loans.
Reserves - means any and all reserves that the Agent deems necessary
in its discretion to maintain with respect to the Collateral or any
Borrower which limit the availability of Borrowings hereunder or which
represent amounts the Agent or any Lender may be obligated to pay in the
future on behalf of a Borrower (including (a) reserves for Bank Products,
(b) reserves for accrued, unpaid interest on the Obligations, (c) reserves
for dilution of Accounts, and (d) reserves for taxes, fees, assessments,
and other governmental charges.
Restricted Investment - any Investment which is not a Permitted
Investment.
Restricted Payment - as defined in Section 10.2.2.
Restricted Subsidiary - with respect to any Person, any Subsidiary
of such Person that is not an Unrestricted Subsidiary.
Restrictive Agreement - an agreement (other than a Loan Document)
that conditions or restricts the right of any Borrower or other Obligor to
incur or repay Borrowed Money, to grant Liens on any assets, to declare or
make Distributions, to modify, extend, or renew any agreement evidencing
Borrowed Money, or to repay any Indebtedness owing to each other.
Revolving Commitment - for any Lender, its obligation to make
Revolving Loans and to participate in LC Obligations up to the maximum
principal amount shown on Schedule 1.1A, or as specified hereafter in the
most recent Assignment and Acceptance
LOAN AND SECURITY AGREEMENT
Page 32
to which such Lender is a party. "Revolving Commitments" means the
aggregate amount of such commitments of all Lenders.
Revolving Loan - a loan made pursuant to Section 2.1, and any Agent
Advance, Overadvance Loan, or Protective Advance.
Revolving Note - a promissory note to be executed by the Borrowers
in favor of a Lender in the form of Exhibit A, which shall be in the
amount of such Lender's Revolving Commitment and shall evidence the
Revolving Loans made by such Lender.
Royalties - all royalties, fees, expense reimbursements, and other
amounts payable by a Borrower under a License.
S&P - Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx,
Inc., and any successor thereto.
Second Lien Credit Agreement - that certain Second Lien Credit
Agreement, dated as of October 27, 2004, among Amkor, the lending
institutions party thereto, Citicorp North America, Inc., Citigroup Global
Markets, Inc., and Merrill, Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated, as
such agreement, unless otherwise noted, may be amended, restated,
replaced, or otherwise modified from time to time.
Secured Parties - the Agent, the Issuing Bank, the Lenders, and
providers of Bank Products.
Security Documents - the Guaranties, Mortgages, Patent Security
Agreements, Trademark Security Agreements, Copyright Security Agreements,
Deposit Account Control Agreements, and all other documents, instruments,
and agreements now or hereafter securing (or given with the intent to
secure) any Obligations.
Senior Notes - Amkor's 9 1/4% Senior Notes due February 15, 2008
issued pursuant to the Senior Notes (2008) Indenture, Amkor's 7 1/8%
Senior Notes due March 15, 2011 issued pursuant to the Senior Notes (2011)
Indenture, and Amkor's 7.75% Senior Notes due May 15, 2013 issued pursuant
to the Senior Notes (2013) Indenture.
Senior Notes Indentures - the Senior Notes (2008) Indenture, the
Senior Notes (2011) Indenture, and the Senior Notes (2013) Indenture.
Senior Notes (2008) Indenture - that certain Indenture between Amkor
and U.S. Bank National Association (as successor to State Street Bank and
Trust Company), as Trustee, dated as of February 20, 2001, as such
Indenture may be amended or supplemented from time to time, relating to
Amkor's 9 1/4% Senior Notes due February 15, 2008.
Senior Notes (2011) Indenture - that certain Indenture between Amkor
and Xxxxx Fargo Bank, N.A., as Trustee, dated as of March 12, 2004, as
such Indenture may be
LOAN AND SECURITY AGREEMENT
Page 33
amended or supplemented from time to time, relating to Amkor's 7 1/8%
Senior Notes due March 15, 2011.
Senior Notes (2013) Indenture - that certain Indenture between Amkor
and U.S. Bank National Association, as Trustee, dated as of May 8, 2003,
as such Indenture may be amended or supplemented from time to time,
relating to Amkor's 7.75% Senior Notes due May 15, 2013.
Senior Officer - the chairman of the board, chief executive officer,
president, chief financial officer, treasurer, or general counsel of a
Borrower or, if the context requires, an Obligor.
Senior Subordinated Notes - Amkor's 10 1/2% Senior Subordinated
Notes due 2009 issued pursuant to the Senior Subordinated Notes Indenture.
Senior Subordinated Notes Indenture - that certain Indenture between
Amkor and U.S. Bank National Association (as successor to State Street
Bank and Trust Company), as Trustee, dated as of May 13, 1999, as such
Indenture may be amended or supplemented from time to time, relating to
the Senior Subordinated Notes.
Settlement Report - a report delivered by the Agent to the Lenders
summarizing the Revolving Loans and participations in LC Obligations
outstanding as of a given settlement date, allocated to the Lenders on a
Pro Rata basis in accordance with their Revolving Commitments.
Software - as defined in the UCC.
Solvent - as to any Person, such Person (a) owns Property whose fair
salable value is greater than the amount required to pay all of its debts
(including contingent, subordinated, unmatured, and unliquidated
liabilities), (b) owns Property whose present fair salable value (as
defined below) is greater than the probable total liabilities (including
contingent, subordinated, unmatured, and unliquidated liabilities) of such
Person as they become absolute and matured, (c) is able to pay all of its
debts as they mature, (d) has capital that is not unreasonably small for
its business and is sufficient to carry on its business and transactions
and all business and transactions in which it is about to engage, (e) is
not "insolvent" within the meaning of Section 101(32) of the Bankruptcy
Code, and (f) has not incurred (by way of assumption or otherwise) any
obligations or liabilities (contingent or otherwise) under any Loan
Documents, or made any conveyance in connection therewith, with actual
intent to hinder, delay, or defraud either present or future creditors of
such Person or any of its Affiliates. As used in this definition, "fair
salable value" means the amount that could be obtained for assets within a
reasonable time, either through collection or through sale under ordinary
selling conditions by a capable and diligent seller to an interested buyer
who is willing (but under no compulsion) to purchase.
Stated Maturity - with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and
LOAN AND SECURITY AGREEMENT
Page 34
shall not include any contingent obligations to repay, redeem, or
repurchase any such interest or principal prior to the date originally
scheduled for the payment thereof.
Statutory Reserves - the percentage (expressed as a decimal)
established by the Board of Governors as the then stated maximum rate for
all reserves (including those imposed by Regulation D, all basic,
emergency, supplemental, or other marginal reserve requirements, and any
transitional adjustments or other scheduled changes in reserve
requirements) applicable to any member bank of the Federal Reserve System
in respect of Eurocurrency Liabilities (or any successor category of
liabilities under Regulation D).
Strategic Investment - any Investment in any Person (other than an
Unrestricted Subsidiary) whose primary business is related, ancillary, or
complementary to a Permitted Business, and such Investment is determined
in good faith by the board of directors of Amkor (or senior officers of
Amkor to whom the board of directors has duly delegated the authority to
make such a determination), whose determination shall be conclusive and
evidenced by a resolution, to promote or significantly benefit the
businesses of Amkor and its Restricted Subsidiaries on the date of such
Investment; provided, that, with respect to any Strategic Investment or
series of related Strategic Investments involving aggregate consideration
in excess of $10,000,000, Amkor shall deliver to the Agent a resolution of
its board of directors set forth in an Officer's Certificate certifying
that such Investment qualifies as a Strategic Investment pursuant to this
definition.
Subordinated Debt - any Indebtedness of Amkor or its Subsidiaries
which is subordinated in right of payment to the Obligations, including
the Senior Subordinated Notes and the Convertible Subordinated Notes.
Subsidiary - any entity at least 50.0% of whose voting securities or
Equity Interests are owned by a Borrower or any combination of Borrowers
(including indirect ownership by a Borrower through other entities in
which such Borrower directly or indirectly owns 50.0% of the voting
securities or Equity Interests).
Subsidiary Guarantor - a "Subsidiary Guarantor" as defined in the
Second Lien Credit Agreement.
Supply Agreement - that certain Packaging & Test Services
Agreement, dated as of January 1, 1998, among Amkor, its predecessor
company (Amkor Electronics, Inc.), Amkor Technology Limited (f/k/a
C.I.L. Limited), Anam Semiconductor, Inc., and Anam USA, Inc., as such
agreement may be extended or renewed from time to time without
alteration of the material terms thereof.
Supporting Obligation - as defined in the UCC.
Taxes - any taxes, levies, imposts, duties, fees, assessments,
deductions, withholdings, or other charges of whatever nature, including
income, receipts, excise, property, sales, use, transfer, license,
payroll, withholding, social security, franchise, intangibles, stamp or
recording taxes imposed by any Governmental Authority, and all interest,
penalties, and similar liabilities relating thereto.
LOAN AND SECURITY AGREEMENT
Page 35
Term Loan - the loan made to Amkor pursuant to the Second Lien
Credit Agreement.
Termination Date - the earliest to occur of (a) November 28, 2009,
(b) the date on which the Borrowers terminate the Revolving Commitments
pursuant to Section 2.1.4, or (c) the date on which the Revolving
Commitments are terminated pursuant to Section 11.2.
Total Liquidity - at any time during any calendar month, the sum of
(a) the amount determined pursuant to clause (b) of the definition of
Borrowing Base at such time, plus (b) the aggregate amount of the
Borrowers' unrestricted cash and Cash Equivalents maintained in the United
States as of the last day of the immediately preceding calendar month,
minus (c) the principal balance of all Revolving Loans.
Total Tangible Assets of the Foreign Subsidiaries - as of any date,
the total assets of all of the Foreign Subsidiaries of Amkor as of such
date, less the amount of the intangible assets of the Foreign Subsidiaries
of Amkor as of such date.
Trademark Security Agreement - each trademark security agreement
pursuant to which an Obligor grants to the Agent, for the benefit of the
Secured Parties, a Lien on such Obligor's interests in trademarks, as
security for the Obligations.
Transferee - any actual or potential Eligible Assignee, Participant,
or other Person acquiring an interest in any Obligations.
Transition Services Agreement - that certain Transition Services
Agreement entered into by and between Amkor and Anam Semiconductor, Inc.
in connection with the Asset Purchase Agreement, as such agreement may be
extended or renewed from time to time without alteration of the material
terms thereof.
Type - any type of a Revolving Loan (i.e., Base Rate Revolving Loan
or LIBOR Revolving Loan) that has the same interest option and, in the
case of LIBOR Revolving Loans, the same Interest Period.
UCC - the Uniform Commercial Code as in effect in the State of Texas
or, when the laws of any other jurisdiction govern the perfection or
enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.
UEI - Unitive Electronics, Inc., a North Carolina corporation.
United States - the United States of America.
Unitive - Unitive, Inc., a Delaware corporation.
Unrestricted Subsidiary - any Subsidiary of Amkor that is designated
by its board of directors as an Unrestricted Subsidiary pursuant to a
board resolution, but only to the extent that such Subsidiary (a) has no
Indebtedness other than Non-Recourse Debt, (b) is a Person with respect to
which neither Amkor nor any of its Restricted Subsidiaries has
LOAN AND SECURITY AGREEMENT
Page 36
any direct or indirect obligation (i) to subscribe for additional Equity
Interests or (ii) to maintain or preserve such Person's financial
condition or to cause such Person to achieve any specified levels of
operating results, (c) has not Guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of Amkor or any of
its Restricted Subsidiaries, and (d) has at least one director on its
board of directors that is not a director or executive officer of Amkor or
any of its Restricted Subsidiaries and has at least one executive officer
that is not a director or executive officer of Amkor or any of its
Restricted Subsidiaries. Any designation of a Subsidiary of Amkor as an
Unrestricted Subsidiary shall be effective upon the Agent's receipt from
Amkor of a certified copy of the resolution of Amkor's board of directors
giving effect to such designation and an Officers' Certificate certifying
that such designation complied with the preceding conditions and was
permitted by Section 10.1.10. If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Agreement and any Indebtedness of such Subsidiary shall
be deemed to be incurred by a Restricted Subsidiary of Amkor as of such
date and, if such Indebtedness is not permitted to be incurred as of such
date under Section 10.1.10, Amkor shall be in default of such covenant.
Amkor's board of directors may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation
shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of Amkor of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (y) such
Indebtedness is permitted under Section 10.1.10, calculated on a pro forma
basis as if such designation had occurred at the beginning of the
four-quarter reference period and (z) no Default or Event of Default would
be in existence following such designation.
Value - the value of Inventory determined by the Agent in good faith
on the basis of the lower of cost or market, calculated on a first-in,
first-out basis.
Voting Stock - with respect to any Person as of any date, the Equity
Interests of such Person that are at the time entitled to vote in the
election of the board of directors (or other equivalent governing body) of
such Person.
Weighted Average Life to Maturity - when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the sum of the
products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity, or other required payments of
principal, including payment at final maturity, in respect thereof, by
(ii) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment, by (b) the then
outstanding principal amount of such Indebtedness.
Wholly Owned Restricted Subsidiary - with respect to any Person, a
Restricted Subsidiary of such Person all of the outstanding Equity
Interests of which (other than directors' qualifying shares or similar
shares required by law to be held by third parties) shall at the time be
owned by such Person and/or by one or more Wholly Owned Restricted
Subsidiaries of such Person.
LOAN AND SECURITY AGREEMENT
Page 37
1.2. Accounting Terms. Except as otherwise specified herein, under the
Loan Documents all accounting terms shall be interpreted, all accounting
determinations shall be made, and all financial statements shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
financial statements of the Borrowers delivered to the Agent before the Closing
Date and using the same inventory valuation method as used in such financial
statements, except for any change required or permitted by GAAP if the
Borrowers' certified public accountants concur in such change, the change is
disclosed to the Agent, and Section 10.3 is amended in a manner reasonably
satisfactory to the Borrowers and the Requisite Lenders to preserve the original
intent thereof in light of the effects of the change.
1.3. Certain Matters of Construction. The terms "herein," "hereof,"
"hereunder," and other words of similar import refer to this Agreement as a
whole and not to any particular section, paragraph, or subdivision. Any pronoun
used shall be deemed to cover all genders. In the computation of periods of time
from a specified date to a later specified date, "from" means "from and
including," and "to" and "until" each mean "to but excluding." The terms
"including" and "include" shall mean "including, without limitation" and, for
purposes of each Loan Document, the parties agree that the rule of ejusdem
generis shall not be applicable to limit any provision. Section titles appear as
a matter of convenience only and shall not affect the interpretation of any Loan
Document. All references to (a) laws or statutes include all related rules,
regulations, interpretations, amendments, and successor provisions, (b) any
document, instrument, or agreement include any amendments, waivers, and other
modifications, extensions or renewals (to the extent permitted by the Loan
Documents), (c) any Section mean, unless the context otherwise requires, a
Section of this Agreement, (d) any Exhibits or Schedules mean, unless the
context otherwise requires, Exhibits and Schedules attached hereto, which are
hereby incorporated by reference, (e) any Person include successors and assigns,
(f) time of day means time of day at the Agent's notice address under Section
14.4.1, or (g) discretion of the Agent, the Issuing Bank, or any Lender mean the
sole and absolute discretion of such Person. All calculations of Value, fundings
of Revolving Loans, issuances of Letters of Credit, and payments of Obligations
shall be in Dollars and, unless the context otherwise requires, all
determinations (including calculations of Borrowing Base and financial
covenants) made from time to time under the Loan Documents shall be made in
light of the circumstances existing at such time. Borrowing Base calculations
shall be made in a manner consistent with historical methods of valuation and
calculation, and otherwise satisfactory to the Agent (and not necessarily in
accordance with GAAP). The Borrowers shall have the burden of establishing any
alleged negligence, misconduct, or lack of good faith by the Agent, the Issuing
Bank, or any Lender under any Loan Documents. No provision of any Loan Documents
shall be construed against any party by reason of such party having, or being
deemed to have, drafted the provision. Whenever the phrase "to the best of the
Borrowers' knowledge" or words of similar import are used in any Loan Documents,
such phrase means actual knowledge of a Senior Officer, or knowledge that a
Senior Officer would have obtained if he or she had engaged in good faith and
diligent performance of his or her duties, including reasonably specific
inquiries of employees or agents and a good faith attempt to ascertain the
matter to which such phrase relates.
LOAN AND SECURITY AGREEMENT
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SECTION 2. CREDIT FACILITIES
2.1. Revolving Commitment.
2.1.1. Revolving Loans. Each Lender agrees, severally on a Pro Rata
basis up to its Revolving Commitment, on the terms set forth herein, to
make Revolving Loans to the Borrowers from time to time through the
Termination Date. The Revolving Loans may be repaid and reborrowed as
provided herein. In no event shall the Lenders have any obligation to
honor a request for a Revolving Loan if the unpaid balance of Revolving
Loans outstanding at such time (including the requested Revolving Loan)
would exceed the Borrowing Base.
2.1.2. Revolving Notes. The Revolving Loans made by each Lender and
interest accruing thereon shall be evidenced by the records of the Agent
and such Lender. At the request of any Lender, the Borrowers shall deliver
a Revolving Note to such Lender.
2.1.3. Use of Proceeds. The proceeds of the Revolving Loans shall be
used by the Borrowers solely (a) to satisfy Existing Indebtedness, (b) to
pay fees and transaction expenses associated with the closing of this
credit facility, (c) to pay Obligations in accordance with this Agreement,
(d) for Capital Expenditures made in the Ordinary Course of Business, and
(e) for working capital and other lawful corporate purposes of the
Borrowers.
2.1.4. Voluntary Reduction or Termination of Revolving Commitments.
(a) The Revolving Commitments shall terminate on the
Termination Date, unless sooner terminated in accordance with this
Agreement. Upon at least ten days prior written notice to the Agent,
the Borrowers may, at their option, terminate the Revolving
Commitments and this credit facility. Any notice of termination
given by the Borrowers shall be irrevocable. On the termination
date, the Borrowers shall make Full Payment of all Obligations.
(b) Concurrently with termination of the Revolving
Commitments, for whatever reason (including an Event of Default),
the Borrowers shall pay to the Agent, for the Pro Rata benefit of
the Lenders and as liquidated damages for loss of bargain (and not
as a penalty), an amount equal to (i) if the termination occurs
during the first Loan Year, 1.00% of the Revolving Commitments and
(ii) if the termination occurs during the second Loan Year, 0.25% of
the Revolving Commitments. No termination charge shall be payable if
the termination occurs any time during or after the third Loan Year
or in connection with a refinancing of this credit facility by Bank
of America or any of its Affiliates.
2.1.5. Overadvances. Subject to Section 5.7 of the Second Lien
Credit Agreement or any other similar restriction on Indebtedness in any
other agreement evidencing Indebtedness to which any Borrower is a party
the effect of which is to limit the availability of Revolving Loans made
pursuant to this Agreement, if the aggregate Revolving Loans exceed the
Borrowing Base ("Overadvance") or the aggregate Revolving Commitments at
any time, the excess amount shall be payable by the
LOAN AND SECURITY AGREEMENT
Page 39
Borrowers on demand by the Agent, but all such Revolving Loans shall
nevertheless constitute Obligations secured by the Collateral and entitled
to all benefits of the Loan Documents. Unless its authority is revoked in
writing by the Requisite Lenders, the Agent may require the Lenders to
honor requests for Overadvance Loans and to forbear from requiring the
Borrowers to cure an Overadvance (a) when no other Event of Default is
known to the Agent (i) as long as the Overadvance was not created by a
funding of Revolving Loans pursuant to this Section and such Overadvance
does not continue for more than 30 consecutive days (and no Overadvance
may exist for at least five consecutive days thereafter before further
Overadvance Loans are required) and (ii) if the Overadvance was created by
funding pursuant to this Section, the aggregate amount thereof is not
known by the Agent to exceed $10,000,000 and (b) if an Event of Default is
known to exist (other than an Event of Default arising from the existence
of the Overadvance), if the Agent discovers an Overadvance not previously
known by it to exist, as long as from the date of such discovery the
Overadvance (i) is not increased by more than $5,000,000 and (ii) does not
continue for more than 30 consecutive days. In no event shall Overadvance
Loans be required that would cause the outstanding Revolving Loans and LC
Obligations to exceed the aggregate Revolving Commitments. Any funding of
an Overadvance Loan or sufferance of an Overadvance shall not constitute a
waiver by the Agent or the Lenders of the Event of Default caused thereby.
In no event shall any Borrower or other Obligor be deemed a beneficiary of
this Section nor authorized to enforce any of its terms.
2.1.6. Protective Advances. Subject to Section 5.7 of the Second
Lien Credit Agreement, any other similar restriction on Indebtedness in
any other agreement evidencing Indebtedness to which any Borrower is a
party the effect of which is to limit the availability of Revolving Loans
made pursuant to this Agreement, and Section 14.1.1(c)(i), the Agent shall
be authorized, in its discretion, at any time that a Default or Event of
Default exists or any conditions in Section 6 are not satisfied, to make
Base Rate Revolving Loans ("Protective Advances") (a) up to an aggregate
amount of $10,000,000 outstanding at any time, if the Agent deems such
Revolving Loans necessary or desirable to preserve or protect any
Collateral, or to enhance the collectibility or repayment of Obligations
or (b) to pay any other amounts chargeable to the Obligors under any Loan
Documents, including costs, fees, and expenses. All Protective Advances
shall be Obligations, secured by the Collateral, and shall be treated for
all purposes as Extraordinary Expenses. Each Lender shall participate in
each Protective Advance on a Pro Rata basis. The Requisite Lenders may at
any time revoke the Agent's authorization to make further Protective
Advances by written notice to the Agent. Absent such revocation, the
Agent's determination that funding of a Protective Advance is appropriate
shall be conclusive.
2.1.7. Increase of Revolving Commitments.
(a) Upon notice to the Agent (who shall promptly notify the
Lenders), the Borrowers may, from time to time, request an increase
in the aggregate Revolving Commitments of the Lenders up to an
aggregate of $175,000,000; provided that any such increase in the
aggregate Revolving Commitments of the Lenders shall be in
increments of $25,000,000. Any increase in the Revolving
LOAN AND SECURITY AGREEMENT
Page 40
Commitments hereunder is subject to approval by all of the Lenders.
At the time of sending the notice referred to in the first sentence
of this clause (a), the Borrowers (in consultation with the Agent)
shall specify the time period within which each Lender is requested
to respond to such request. Each Lender shall respond within such
time period to the Agent and shall indicate whether or not such
Lender agrees to increase its Revolving Commitment and, if so,
whether by an amount equal to or less than its Pro Rata amount of
such requested increase. Any Lender not responding within such time
period shall be deemed to have declined to increase its Revolving
Commitment. The Agent shall notify the Borrowers and each Lender of
the Lenders' responses to each request made hereunder. To achieve
the full amount of a requested increase, the Borrowers may also (i)
request that one or more other Lenders, in their sole and absolute
discretion, nonratably increase their Revolving Commitment(s), (ii)
and/or invite additional Persons to become Lenders under the terms
of this Agreement.
(b) If any Revolving Commitments are increased in accordance
with this Section, the Agent and the Borrowers shall determine the
effective date of such increase (the "Increase Effective Date"). The
Agent and the Borrowers shall promptly confirm in writing to the
Lenders the final allocation of such increase and the Increase
Effective Date. As a condition precedent to such increase, the
Borrower Agent shall deliver to the Agent an Officer's Certificate,
dated as of the Increase Effective Date (in sufficient copies for
each Lender) (i) certifying and attaching the resolutions adopted by
the Borrowers approving or consenting to such increase, (ii)
certifying that before and after giving effect to such increase, the
representations and warranties contained in Section 9 are true and
correct on and as of the Increase Effective Date and no Default or
Event of Default exists, and (iii) certifying that the aggregate
amount of the Revolving Commitments, after giving effect to such
increase, as of the Increase Effective Date may be borrowed
hereunder and will not constitute a default or event of default
under the Second Lien Credit Agreement or the Indentures. The
Borrowers shall pay any commitment fees and other expenses incurred
in connection with any such increase and shall prepay any LIBOR
Revolving Loans outstanding on the Increase Effective Date (and pay
any costs incurred in connection with such prepayment pursuant to
Section 3.9) to the extent necessary to keep outstanding LIBOR
Revolving Loans ratable with any revised Pro Rata percentages
arising from any nonratable increase in the Revolving Commitments
under this Section.
(c) This Section shall supersede any provisions in Section
14.1 to the contrary.
2.2. Reserved.
2.3. Letter of Credit Facility.
2.3.1. Issuance of Letters of Credit. The Issuing Bank agrees to
issue Letters of Credit from time to time until 30 days prior to the
Termination Date (or until the Termination Date, if earlier), on the terms
set forth herein, including the following:
LOAN AND SECURITY AGREEMENT
Page 41
(a) Each Borrower acknowledges that the Issuing Bank's
willingness to issue any Letter of Credit is conditioned upon the
Issuing Bank's receipt of a LC Application with respect to the
requested Letter of Credit, as well as such other instruments and
agreements as the Issuing Bank may customarily require for issuance
of a letter of credit of similar type and amount. The Issuing Bank
shall have no obligation to issue any Letter of Credit unless (i)
the Issuing Bank receives a LC Request and LC Application at least
three Business Days prior to the requested date of issuance and (ii)
each LC Condition is satisfied. If the Issuing Bank receives written
notice from a Lender at least one Business Day before issuance of a
Letter of Credit that any LC Condition has not been satisfied, the
Issuing Bank shall have no obligation to issue the requested Letter
of Credit (or any other) until such notice is withdrawn in writing
by that Lender or until the Requisite Lenders have waived such
condition in accordance with this Agreement. Prior to receipt of any
such notice, the Issuing Bank shall not be deemed to have knowledge
of any failure of LC Conditions.
(b) Letters of Credit may be requested by a Borrower only (i)
to support obligations of such Borrower incurred in the Ordinary
Course of Business, on a standby basis or (ii) for other purposes as
the Agent and the Lenders may approve from time to time in writing.
The renewal or extension of any Letter of Credit shall be treated as
the issuance of a new Letter of Credit, except that delivery of a
new LC Application shall be required at the discretion of the
Issuing Bank.
(c) The Borrowers assume all risks of the acts, omissions, or
misuses of any Letter of Credit by the beneficiary. In connection
with issuance of any Letter of Credit, none of the Agent, the
Issuing Bank, or any Lender shall be responsible for (i) the
existence, character, quality, quantity, condition, packing, value,
or delivery of any goods purported to be represented by any
Documents, (ii) any differences or variation in the character,
quality, quantity, condition, packing, value, or delivery of any
goods from that expressed in any Documents, (iii) the form,
validity, sufficiency, accuracy, genuineness, or legal effect of any
Documents or of any endorsements thereon, (iv) the time, place,
manner, or order in which shipment of goods is made, (v) partial or
incomplete shipment of, or failure to ship, any goods referred to in
a Letter of Credit or Documents, (vi) any deviation from
instructions, delay, default, or fraud by any shipper or other
Person in connection with any goods, shipment, or delivery, (vii)
any breach of contract between a shipper or vendor and a Borrower,
(viii) errors, omissions, interruptions, or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex,
telecopy, e-mail, telephone, or otherwise, (ix) errors in
interpretation of technical terms, (x) the misapplication by a
beneficiary of any Letter of Credit or the proceeds thereof, (xi) or
any consequences arising from causes beyond the control of the
Issuing Bank, the Agent, or any Lender, including any act or
omission of a Governmental Authority. The rights and remedies of the
Issuing Bank under the Loan Documents shall be cumulative. The
Issuing Bank shall be fully subrogated to the rights and remedies of
each
LOAN AND SECURITY AGREEMENT
Page 42
beneficiary whose claims against the Borrowers are discharged with
proceeds of any Letter of Credit.
(d) In connection with its administration of and enforcement
of rights or remedies under any Letters of Credit or LC Documents,
the Issuing Bank shall be entitled to act, and shall be fully
protected in acting, upon any certification, notice, or other
communication in whatever form believed by the Issuing Bank, in good
faith, to be genuine and correct and to have been signed, sent or
made by a proper Person. The Issuing Bank may consult with and
employ legal counsel, accountants, and other experts to advise it
concerning its obligations, rights, and remedies, and shall be
entitled to act upon, and shall be fully protected in any action
taken in good faith reliance upon, any advice given by such experts.
The Issuing Bank may employ agents and attorneys-in-fact in
connection with any matter relating to Letters of Credit or LC
Documents, and shall not be liable for the negligence or misconduct
of any such agents or attorneys-in-fact selected with reasonable
care.
2.3.2. Reimbursement; Participations.
(a) If the Issuing Bank honors any request for payment under a
Letter of Credit, the Borrowers shall pay to the Issuing Bank, in
Dollars on the same day (the "Reimbursement Date"), the amount paid
by the Issuing Bank under such Letter of Credit, together with
interest at the interest rate for Base Rate Revolving Loans from the
Reimbursement Date until payment by the Borrowers. The obligation of
the Borrowers to reimburse the Issuing Bank for any payment made
under a Letter of Credit shall be absolute, unconditional,
irrevocable, and joint and several, and shall be paid without regard
to any lack of validity or enforceability of any Letter of Credit or
the existence of any claim, setoff, defense, or other right that the
Borrowers may have at any time against the beneficiary. Whether or
not the Borrower Agent submits a Notice of Borrowing, the Borrowers
shall be deemed to have requested a Borrowing of Base Rate Revolving
Loans in an amount necessary to pay all amounts due the Issuing Bank
on any Reimbursement Date and each Lender agrees to fund its Pro
Rata share of such Borrowing whether or not the Revolving
Commitments have terminated, an Overadvance exists or is created
thereby, or the conditions in Section 6 are satisfied.
(b) Upon issuance of a Letter of Credit, each Lender shall be
deemed to have irrevocably and unconditionally purchased from the
Issuing Bank, without recourse or warranty, an undivided Pro Rata
interest and participation in all LC Obligations relating to such
Letter of Credit. If the Issuing Bank makes any payment under a
Letter of Credit and the Borrowers do not reimburse such payment on
the Reimbursement Date, the Agent shall promptly notify the Lenders
and each Lender shall promptly (within one Business Day) and
unconditionally pay to the Agent, for the benefit of the Issuing
Bank, such Lender's Pro Rata share of such payment. Upon request by
a Lender, the Issuing Bank shall furnish copies of any Letters of
Credit and LC Documents in its possession at such time.
LOAN AND SECURITY AGREEMENT
Page 43
(c) The obligation of each Lender to make payments to the
Agent for the account of the Issuing Bank in connection with the
Issuing Bank's payment under a Letter of Credit shall be absolute,
unconditional, and irrevocable, not subject to (i) any counterclaim,
setoff, qualification, or exception whatsoever, and shall be made in
accordance with this Agreement under all circumstances, irrespective
of any lack of validity or unenforceability of any Loan Documents,
(ii) any draft, certificate, or other document presented under a
Letter of Credit having been determined to be forged, fraudulent,
invalid, or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect, or (iii) the existence of
any setoff or defense that any Obligor may have with respect to any
Obligations. The Issuing Bank does not assume any responsibility for
any failure or delay in performance or any breach by any Borrower or
other Person of any obligations under any LC Documents. The Issuing
Bank does not make to the Lenders any express or implied warranty,
representation, or guaranty with respect to the Collateral, the LC
Documents, or any Obligor. The Issuing Bank shall not be responsible
to any Lender for (x) any recitals, statements, information,
representations, or warranties contained in, or for the execution,
validity, genuineness, effectiveness, or enforceability of any LC
Documents, (y) the validity, genuineness, enforceability,
collectibility, value, or sufficiency of any Collateral or the
perfection of any Lien therein (z) or the assets, liabilities,
financial condition, results of operations, business,
creditworthiness, or legal status of any Obligor.
(d) No Issuing Bank Indemnitee shall be liable to any Lender
or other Person for any action taken or omitted to be taken in
connection with any LC Documents except as a result of such Issuing
Bank Indemnitee's actual gross negligence or willful misconduct. The
Issuing Bank shall not have any liability to any Lender if the
Issuing Bank refrains from any action under any Letter of Credit or
LC Documents until it receives written instructions from the
Requisite Lenders.
2.3.3. Cash Collateral. If any LC Obligations, whether or not then
due or payable, shall for any reason be outstanding at any time (a) that
an Event of Default exists, (b) that Availability is less than zero, (c)
after the Termination Date, or (d) within ten days prior to the
Termination Date, then the Borrowers shall, at the Issuing Bank's or the
Agent's request, pay to the Issuing Bank the amount of all outstanding LC
Obligations and Cash Collateralize all outstanding Letters of Credit. If
the Borrowers fail to Cash Collateralize outstanding Letters of Credit as
required herein, the Lenders may (and shall upon direction of the Agent)
advance, as Revolving Loans, the amount of the Cash Collateral required
(whether or not the Revolving Commitments have terminated, an Overadvance
exists, or the conditions in Section 6 are satisfied).
LOAN AND SECURITY AGREEMENT
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SECTION 3. INTEREST, FEES, AND CHARGES
3.1. Interest.
3.1.1. Rates and Payment of Interest.
(a) The Obligations shall bear interest (i) if a Base Rate
Revolving Loan, at the Base Rate in effect from time to time, plus
the Applicable Margin, (ii) if a LIBOR Revolving Loan, at Adjusted
LIBOR for the applicable Interest Period, plus the Applicable
Margin; and (iii) if any other Obligation (including, to the extent
permitted by law, interest not paid when due), at the Base Rate in
effect from time to time, plus the Applicable Margin for Base Rate
Revolving Loans. Interest shall accrue from the date the Revolving
Loan is advanced or the Obligation is incurred or payable, until
paid by the Borrowers. If a Revolving Loan is repaid on the same day
made, one day's interest shall accrue.
(b) During an Insolvency Proceeding with respect to any
Borrower, or during the existence of any other Event of Default if
the Agent or the Requisite Lenders in their discretion so elect, the
Obligations shall bear interest at the Default Rate. Each Borrower
acknowledges that the cost and expense to the Agent and each Lender
due to an Event of Default are difficult to ascertain and that the
Default Rate is a fair and reasonable estimate to compensate the
Agent and the Lenders for such added cost and expense.
(c) Interest accrued on the Revolving Loans shall be due and
payable in arrears, (i) on the first day of each month, (ii) on any
date of prepayment, with respect to the principal of the Revolving
Loans being prepaid, and (iii) on the Termination Date. Interest
accrued on any other Obligations shall be due and payable as
provided in the Loan Documents and, if no payment date is specified,
shall be due and payable on demand. Notwithstanding the foregoing,
interest accrued at the Default Rate shall be due and payable on
demand.
3.1.2. Application of Adjusted LIBOR to Outstanding Revolving Loans.
(a) The Borrowers may on any Business Day, subject to
submission of a Notice of Conversion/Continuation, elect to convert
any portion of the Base Rate Revolving Loans to, or to continue any
LIBOR Revolving Loan at the end of its Interest Period as, a LIBOR
Revolving Loan. During any Event of Default, the Agent may (and
shall at the direction of the Requisite Lenders) declare that no
Revolving Loan may be made, converted, or continued as a LIBOR
Revolving Loan.
(b) Whenever the Borrowers desire to convert or continue
Revolving Loans as LIBOR Revolving Loans, the Borrower Agent shall
submit a Notice of Conversion/Continuation to the Agent no later
than 11:00 a.m. at least three Business Days before the requested
conversion or continuation date. Promptly after receiving any such
notice, the Agent shall notify each Lender thereof. Each Notice of
Conversion/Continuation shall be irrevocable and shall specify the
LOAN AND SECURITY AGREEMENT
Page 45
aggregate principal amount of Revolving Loans to be converted or
continued, the conversion or continuation date (which shall be a
Business Day), and the duration of the Interest Period (which shall
be deemed to be one month if not specified). If, upon the expiration
of any Interest Period in respect of any LIBOR Revolving Loans, the
Borrowers shall have failed to submit a Notice of
Conversion/Continuation, they shall be deemed to have elected to
convert such Revolving Loans into Base Rate Revolving Loans.
3.1.3. Interest Periods. In connection with the making, conversion,
or continuation of any LIBOR Revolving Loans, the Borrowers shall select
an interest period ("Interest Period") to apply, which interest period
shall be one, two, or three months; provided that:
(a) the Interest Period shall commence on the date the
Revolving Loan is made or continued as, or converted into, a LIBOR
Revolving Loan, and shall expire on the numerically corresponding
day in the calendar month at its end;
(b) if any Interest Period commences on a day for which there
is no corresponding day in the calendar month at its end or if such
corresponding day falls after the last Business Day of such month,
then the Interest Period shall expire on the last Business Day of
such month, and if any Interest Period would expire on a day that is
not a Business Day, the period shall expire on the next Business
Day; and
(c) no Interest Period shall extend beyond the Termination
Date.
3.1.4. Interest Rate Not Ascertainable. If the Agent shall determine
that on any date for determining the Adjusted LIBOR, due to any
circumstance affecting the London interbank market, adequate and fair
means do not exist for ascertaining such rate on the basis provided
herein, then the Agent shall immediately notify the Borrowers of such
determination. Until the Agent notifies the Borrowers that such
circumstance no longer exists, the obligation of the Lenders to make LIBOR
Revolving Loans shall be suspended, and no further Revolving Loans may be
converted into or continued as LIBOR Revolving Loans.
3.2. Fees.
3.2.1. Unused Line Fee. The Borrowers shall pay to the Agent, for
the Pro Rata benefit of the Lenders, a fee equal to the per annum
percentage specified in the definition of Applicable Margin with respect
to the unused line fee multiplied by the amount by which the Revolving
Commitments exceed the average daily balance of Revolving Loans and stated
amount of Letters of Credit during each month. Such fee shall be payable
in arrears, on the first Business Day of each month and on the Termination
Date.
3.2.2. LC Facility Fees. The Borrowers shall pay (a) to the Agent,
for the Pro Rata benefit of the Lenders, a fee equal to the Applicable
Margin in effect for LIBOR Revolving Loans, multiplied by the average
daily stated amount of Letters of Credit, which fee shall be payable
monthly in arrears, on the first Business Day of each month,
LOAN AND SECURITY AGREEMENT
Page 46
(b) to the Agent, for its own account, a fronting fee of 0.25% per annum,
multiplied by the average daily stated amount of Letters of Credit, which
fee shall be payable monthly in arrears, on the first Business Day of each
month, and (c) to the Issuing Bank, for its own account, all customary
charges associated with the issuance, amending, negotiating, payment,
processing, transfer, and administration of Letters of Credit, which
charges shall be paid as and when incurred. During an Event of Default,
the fee payable under clause (a) preceding shall be equal to the
Applicable Margin in effect for LIBOR Revolving Loans, plus 2.00% per
annum, multiplied by the average daily stated amount of Letters of Credit.
3.2.3. Agent Fees. In consideration of the Agent's syndication of
the Revolving Commitments and service as the Agent hereunder, the
Borrowers shall pay to the Agent, for its own account, the fees described
in the Fee Letter.
3.3. Computation of Interest, Fees, Yield Protection. All interest, as
well as fees and other charges calculated on a per annum basis, shall be
computed for the actual days elapsed, based on a year of 360 days. Each
determination by the Agent of any interest, fees, or interest rate hereunder
shall be final, conclusive, and binding for all purposes, absent manifest error.
All fees shall be fully earned when due and shall not be subject to rebate or
refund, nor subject to proration except as specifically provided herein. All
fees payable under Section 3.2 are compensation for services and are not, and
shall not be deemed to be, interest or any other charge for the use,
forbearance, or detention of money. A certificate as to amounts payable by the
Borrowers under Section 3.4, Section 3.6, Section 3.7, Section 3.9, or Section
5.9, submitted to the Borrowers by the Agent or the affected Lender, as
applicable, shall be final, conclusive, and binding for all purposes, absent
manifest error.
3.4. Reimbursement Obligations. The Borrowers shall reimburse the Agent
for all Extraordinary Expenses incurred by it. The Borrowers shall also
reimburse the Agent for all accounting, appraisal, consulting, reasonable legal,
and other fees, costs, and expenses incurred by it in connection with (a)
negotiation and preparation of any Loan Documents, including any amendment or
other modification thereof, (b) administration of and actions relating to any
Collateral, Loan Documents, and transactions contemplated thereby, including any
actions taken to perfect or maintain priority of the Agent's Liens on any
Collateral, to maintain any insurance required hereunder, or to verify
Collateral, and (c) subject to the limits of Section 10.1.1(b), each inspection,
audit, or appraisal with respect to any Obligor or Collateral. All amounts
reimbursable by the Borrowers under this Section shall constitute Obligations
secured by the Collateral and shall be payable on demand.
3.5. Illegality. Notwithstanding anything to the contrary herein, if (a)
any change in any law or interpretation thereof by any Governmental Authority
makes it unlawful for a Lender to make or maintain a LIBOR Revolving Loan or to
maintain any Revolving Commitment with respect to LIBOR Revolving Loans or (b) a
Lender determines that the making or continuance of a LIBOR Revolving Loan has
become impracticable as a result of a circumstance that adversely affects the
London interbank market or the position of such Lender in such market, then such
Lender shall give notice thereof (which notice shall include supporting
documentation) to the Agent and the Borrowers and may (y) declare that LIBOR
Revolving Loans will not thereafter be made by such Lender, whereupon any
request for a LIBOR Revolving Loan from such Lender
LOAN AND SECURITY AGREEMENT
Page 47
shall be deemed to be a request for a Base Rate Revolving Loan unless such
Lender's declaration has been withdrawn (and it shall be withdrawn promptly upon
cessation of the circumstances described in clause (a) or clause (b) preceding)
and/or (z) require that all outstanding LIBOR Revolving Loans made by such
Lender be converted to Base Rate Revolving Loans immediately, in which event all
outstanding LIBOR Revolving Loans of such Lender shall be immediately converted
to Base Rate Revolving Loans.
3.6. Increased Costs. If, by reason of (y) the introduction of or any
change (including any change by way of imposition or increase of Statutory
Reserves or other reserve requirements) in any law or interpretation thereof or
(z) the compliance with any guideline or request from any Governmental Authority
or other Person exercising control over banks or financial institutions
generally (whether or not having the force of law):
(a) a Lender shall be subject to any Tax with respect to any LIBOR
Revolving Loan or Letter of Credit or its obligation to make LIBOR
Revolving Loans, issue Letters of Credit, or participate in LC
Obligations, or a change shall result in the basis of taxation of any
payment to a Lender with respect to its LIBOR Revolving Loans or its
obligation to make LIBOR Revolving Loans, issue Letters of Credit, or
participate in LC Obligations (except for Excluded Taxes); or
(b) any reserve (including any imposed by the Board of Governors),
special deposits, or similar requirement against assets of, deposits with,
or for the account of, or credit extended by, a Lender shall be imposed or
deemed applicable, or any other condition affecting a Lender's LIBOR
Revolving Loans or obligation to make LIBOR Revolving Loans, issue Letters
of Credit, or participate in LC Obligations shall be imposed on such
Lender or the London interbank market;
and as a result there shall be an increase in the cost to such Lender of
agreeing to make or making, funding, or maintaining LIBOR Revolving Loans,
Letters of Credit, or participations in LC Obligations (except to the extent
already included in determination of the Adjusted LIBOR), or there shall be a
reduction in the amount receivable by such Lender, then the Lender shall
promptly notify the Borrowers and the Agent of such event (which notice shall
include supporting documentation), and the Borrowers shall, within ten days
following demand therefor, pay such Lender the amount of such increased costs or
reduced amounts. If a Lender determines that, because of circumstances described
above or any other circumstances arising hereafter affecting such Lender, the
London interbank market or such Lender's position in such market, the Adjusted
LIBOR or its Applicable Margin, as applicable, will not adequately and fairly
reflect the cost to such Lender of funding LIBOR Revolving Loans, issuing
Letters of Credit, or participating in LC Obligations, then (A) such Lender
shall promptly notify the Borrowers and the Agent of such event (which notice
shall include supporting documentation), (B) such Lender's obligation to make
LIBOR Revolving Loans, issue Letters of Credit, or participate in LC Obligations
shall be immediately suspended, until each condition giving rise to such
suspension no longer exists, and (C) such Lender shall make a Base Rate
Revolving Loan as part of any requested Borrowing of LIBOR Revolving Loans,
which Base Rate Revolving Loan shall, for all purposes, be considered part of
such Borrowing.
LOAN AND SECURITY AGREEMENT
Page 48
3.7. Capital Adequacy. If a Lender determines that any introduction of
or any change in a Capital Adequacy Regulation, any change in the interpretation
or administration of a Capital Adequacy Regulation by a Governmental Authority
charged with interpretation or administration thereof, or any compliance by such
Lender or any Person controlling such Lender with a Capital Adequacy Regulation,
increases the amount of capital required or expected to be maintained by such
Lender or Person (taking into consideration its capital adequacy policies and
desired return on capital) as a consequence of such Lender's Revolving
Commitments, Revolving Loans, participations in LC Obligations, or other
obligations under the Loan Documents, then the Borrowers shall, within ten days
following demand therefor, pay such Lender an amount sufficient to compensate
for such increase. A Lender's demand for payment shall set forth the nature of
the occurrence giving rise to such compensation (which notice shall include
supporting documentation) and a calculation of the amount to be paid. In
determining such amount, the Lender may use any reasonable averaging and
attribution method.
3.8. Mitigation. Each Lender agrees that, upon becoming aware that it
is subject to Section 3.5, Section 3.6, Section 3.7, or Section 5.9, it will
take reasonable measures to reduce the Borrowers' obligations under such
Sections, including funding or maintaining its Revolving Commitments or
Revolving Loans through another office, as long as use of such measures would
not adversely affect such Lender's Revolving Commitments, Revolving Loans,
business, or interests, and would not be inconsistent with any internal policy
or applicable legal or regulatory restriction.
3.9. Funding Losses. If for any reason (other than default by a Lender)
(a) any Borrowing of, or conversion to, or continuation of, a LIBOR Revolving
Loan does not occur on the date specified therefor in a Notice of Borrowing or
Notice of Conversion/Continuation (whether or not withdrawn), (b) any repayment
or conversion of a LIBOR Revolving Loan occurs on a day other than the end of
its Interest Period, or (c) the Borrowers fail to repay a LIBOR Revolving Loan
when required hereunder, then the Borrowers shall pay to the Agent its customary
administrative charge and to each Lender all losses and expenses that it
sustains as a consequence thereof, including any loss or expense arising from
liquidation or redeployment of funds or from fees payable to terminate deposits
of matching funds. The Lenders shall not be required to purchase Dollar deposits
in the London interbank market or any other offshore Dollar market to fund any
LIBOR Revolving Loan, but the provisions hereof shall be deemed to apply as if
each Lender had purchased such deposits to fund its LIBOR Revolving Loans.
3.10. Maximum Interest. In no event shall interest, charges, or other
amounts that are contracted for, charged, or received by the Agent and the
Lenders pursuant to any Loan Documents and that are deemed interest under
Applicable Law ("interest") exceed the highest rate permissible under Applicable
Law ("maximum rate"). If, in any month, any interest rate, absent the foregoing
limitation, would have exceeded the maximum rate, then the interest rate for
that month shall be the maximum rate and, if in a future month, that interest
rate would otherwise be less than the maximum rate, then the rate shall remain
at the maximum rate until the amount of interest actually paid equals the amount
of interest which would have accrued if it had not been limited by the maximum
rate. If, upon Full Payment of the Obligations, the total amount of interest
actually paid under the Loan Documents is less than the total amount of interest
that would, but for this Section, have accrued under the Loan Documents, then
the Borrowers shall, to the extent permitted by Applicable Law, pay to the
Agent, for the account of the Lenders,
LOAN AND SECURITY AGREEMENT
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(a) the lesser of (i) the amount of interest that would have been charged if the
maximum rate had been in effect at all times or (ii) the amount of interest that
would have accrued had the interest rate otherwise set forth in the Loan
Documents been in effect, minus (b) the amount of interest actually paid under
the Loan Documents. If a court of competent jurisdiction determines that the
Agent or any Lender has received interest in excess of the maximum amount
allowed under Applicable Law, such excess shall be deemed received on account
of, and shall automatically be applied to reduce, the Obligations other than
interest (regardless of any erroneous application thereof by the Agent or any
Lender), and upon Full Payment of the Obligations, any balance shall be refunded
to the Borrowers. In determining whether any excess interest has been charged or
received by the Agent or any Lender, all interest at any time charged or
received from the Borrowers in connection with the Loan Documents shall, to the
extent permitted by Applicable Law, be amortized, prorated, allocated, and
spread in equal parts throughout the full term of the Obligations.
SECTION 4. LOAN ADMINISTRATION
4.1. Manner of Borrowing and Funding Revolving Loans.
4.1.1. Notice of Borrowing.
(a) Whenever the Borrowers desire funding of a
Borrowing of Revolving Loans, the Borrower Agent shall submit
a Notice of Borrowing to the Agent. Such notice must be
received by the Agent no later than 11:00 a.m. (i) on the
Business Day of the requested funding date, in the case of
Base Rate Revolving Loans, and (ii) at least three Business
Days prior to the requested funding date, in the case of LIBOR
Revolving Loans. Notices received after 11:00 a.m. shall be
deemed received on the next Business Day. Each Notice of
Borrowing shall be irrevocable and shall specify (w) the
principal amount of the Borrowing, (x) the requested funding
date (which must be a Business Day), (y) whether the Borrowing
is to be made as Base Rate Revolving Loans or LIBOR Revolving
Loans, and (z) in the case of LIBOR Revolving Loans, the
duration of the applicable Interest Period (which shall be
deemed to be one month if not specified).
(b) Unless payment is otherwise timely made by the
Borrowers, the becoming due of any Obligations (whether
principal, interest, fees, or other charges, including
Extraordinary Expenses, LC Obligations, Cash Collateral, and
Bank Product Debt) shall be deemed irrevocably to be a request
(without any requirement for a Notice of Borrowing) for Base
Rate Revolving Loans on the due date, in the amount of such
Obligations. The proceeds of such Revolving Loans shall be
disbursed as direct payment of the relevant Obligation.
(c) If the Borrowers establish a controlled
disbursement account with the Agent or any Affiliate of the
Agent, then the presentation for payment of any check or other
item of payment drawn on such account at a time when there are
insufficient funds to cover it shall be deemed to be a request
(without any requirement for a Notice of Borrowing) for Base
Rate Revolving Loans on the
LOAN AND SECURITY AGREEMENT
Page 50
date of such presentation, in the amount of the check and
items presented for payment. The proceeds of such Revolving
Loans may be disbursed directly to the controlled disbursement
account.
(d) Neither the Agent nor any Lender shall have any
obligation to the Borrowers to honor any deemed request for a
Revolving Loan on or after the Termination Date, when an
Overadvance exists or would result therefrom, or when any
condition in Section 6 is not satisfied, but may do so in
their discretion, without being deemed to have waived any
Default or Event of Default.
4.1.2. Fundings by the Lenders. Each Lender shall timely honor
its Revolving Commitment by funding its Pro Rata share of each
Borrowing of Revolving Loans that is properly requested hereunder. The
Agent shall endeavor to notify the Lenders of each Notice of Borrowing
(or deemed request for a Borrowing) by 12:00 noon on the proposed
funding date for Base Rate Revolving Loans or by 3:00 p.m. at least two
Business Days before any proposed funding of LIBOR Revolving Loans.
Each Lender shall fund to the Agent such Lender's Pro Rata share of the
Borrowing to the account specified by the Agent in immediately
available funds not later than 2:00 p.m. on the requested funding date,
unless the Agent's notice is received after the times provided above,
in which event each Lender shall fund its Pro Rata share by 11:00 a.m.
on the next Business Day. Subject to its receipt of such amounts from
the Lenders, the Agent may make the proceeds of the Revolving Loans
available to the Borrowers by disbursing same to the Designated
Account. Unless the Agent shall have received (in sufficient time to
act) written notice from a Lender that it does not intend to fund its
Pro Rata share of a Borrowing, the Agent may assume that such Lender
has deposited or promptly will deposit its share with the Agent, and
the Agent may disburse a corresponding amount to the Borrowers. If a
Lender's share of any Borrowing is not in fact received by the Agent,
then the Borrowers agree to repay to the Agent on demand the amount of
such share, together with interest thereon from the date disbursed
until repaid, at the rate applicable to such Borrowing.
4.1.3. Agent Advances; Settlement.
(a) The Agent may, but shall not be obligated to,
advance Agent Advances to the Borrowers out of the Agent's own
funds unless the funding is specifically required to be made
by all Lenders hereunder. Each Agent Advance shall constitute
a Revolving Loan for all purposes, except that payments
thereon shall be made to the Agent for its own account. The
obligation of the Borrowers to repay Agent Advances shall be
evidenced by the records of the Agent and need not be
evidenced by any promissory note. Agent Advances shall be
immediately due and payable by the Borrowers at any time on
demand by the Agent in its discretion, whether due to the
failure of any Lender to make settlement on a settlement date
as provided below or for any other reason.
(b) To facilitate administration of the Revolving
Loans, the Lenders and the Agent agree (which agreement is
solely among them, and not for the benefit of or enforceable
by any Borrower) that settlement among them with
LOAN AND SECURITY AGREEMENT
Page 51
respect to Agent Advances and other Revolving Loans may take
place periodically on a date determined from time to time by
the Agent, which shall occur at least once every five Business
Days. On each settlement date, settlement shall be made with
each Lender in accordance with the Settlement Report delivered
by the Agent to the Lenders. Between settlement dates, the
Agent may in its discretion apply payments on Revolving Loans
to Agent Advances, regardless of any designation by any
Borrower or any provision herein to the contrary. Each
Lender's obligation to make settlements with the Agent is
absolute and unconditional, without offset, counterclaim, or
other defense, and whether or not the Revolving Commitments
have terminated, an Overadvance exists, or the conditions in
Section 6 are satisfied. If, due to an Insolvency Proceeding
with respect to a Borrower or otherwise, any Agent Advances
may not be settled among the Lenders hereunder, then each
Lender shall be deemed to have purchased from the Agent a Pro
Rata participation in each unpaid Agent Advance and shall
transfer the amount of such participation to the Agent, in
immediately available funds, within one Business Day after the
Agent's request therefor.
4.1.4. Telephonic Notices. Each Borrower authorizes the Agent
and the Lenders to extend Base Rate Revolving Loans and transfer funds
to or on behalf of the Borrowers based on telephonic instructions. If
requested by the Agent, the Borrowers shall confirm each such
telephonic request by prompt submission to the Agent of a Notice of
Borrowing or other written request, as applicable. If any Notice of
Borrowing or other written request submitted to the Agent differs in
any material respect from the action taken by the Agent or the Lenders,
the records of the Agent and the Lenders shall govern. Neither the
Agent nor any Lender shall have any liability for any loss suffered by
a Borrower as a result of the Agent or any Lender acting upon its
understanding of telephonic instructions from a person believed in good
faith by the Agent or any Lender to be a person authorized to give such
instructions on a Borrower's behalf. The Agent may in its sole
discretion refuse to act upon any telephonic instructions received from
the Borrower Agent or any Borrower.
4.2. Defaulting Lender. If a Lender fails to make any payment to the
Agent that is required hereunder, the Agent may (but shall not be required to),
in its discretion, retain payments that would otherwise be made to such
defaulting Lender hereunder, apply the payments to such Lender's defaulted
obligations, or readvance the funds to the Borrowers in accordance with this
Agreement. The failure of any Lender to fund a Revolving Loan or to make a
payment in respect of a LC Obligation shall not relieve any other Lender of its
obligations hereunder, and no Lender shall be responsible for default by another
Lender. The Lenders and the Agent agree (which agreement is solely among them,
and not for the benefit of or enforceable by any Borrower) that, solely for
purposes of determining a defaulting Lender's right to vote on matters relating
to the Loan Documents and to share in payments, fees, and Collateral proceeds
thereunder, a defaulting Lender shall not be deemed to be a "Lender" until all
its defaulted obligations have been cured.
4.3. Number and Amount of LIBOR Revolving Loans; Determination of Rate.
For ease of administration, all LIBOR Revolving Loans having the same length and
beginning date
LOAN AND SECURITY AGREEMENT
Page 52
of their Interest Periods shall be aggregated together, and such Revolving Loans
shall be allocated among the Lenders on a Pro Rata basis. No more than three
aggregated LIBOR Revolving Loans may be outstanding at any time, and each
aggregate LIBOR Revolving Loan when made, continued, or converted shall be in a
minimum amount of $5,000,000, or a multiple of $1,000,000 in excess thereof.
Upon determining Adjusted LIBOR for any Interest Period requested by the
Borrowers, the Agent shall promptly notify the Borrowers thereof by telephone or
electronically and, if requested by the Borrowers, shall confirm any telephonic
notice in writing.
4.4. Borrower Agent. Each Borrower hereby designates Amkor (the
"Borrower Agent") as its representative and agent for all purposes under the
Loan Documents, including (a) requests for Revolving Loans and Letters of
Credit, (b) designation of interest rates, (c) delivery or receipt of
communications with the Agent, the Issuing Bank, or any Lender, (d) preparation
and delivery of Borrowing Base Certificates and financial reports, (e) receipt
and payment of Obligations, (f) requests for waivers, amendments, or other
accommodations, (g) actions under the Loan Documents (including in respect of
compliance with covenants), and (h) all other dealings with the Agent, the
Issuing Bank, or any Lender. The Borrower Agent hereby accepts such appointment.
The Agent and the Lenders shall be entitled to rely upon, and shall be fully
protected in relying upon, any notice or communication (including any Notice of
Borrowing or any Notice of Conversion/Continuation) delivered by the Borrower
Agent on behalf of any Borrower. The Agent and the Lenders may give any notice
or communication with a Borrower hereunder to the Borrower Agent on behalf of
such Borrower. The Agent shall have the right, in its discretion, to deal
exclusively with the Borrower Agent for any or all purposes under the Loan
Documents. Each Borrower agrees that any notice, election, communication,
representation, agreement, or undertaking made on its behalf by the Borrower
Agent shall be binding upon and enforceable against it.
4.5. One Obligation. The Revolving Loans, LC Obligations, and other
Obligations shall constitute one general obligation of the Borrowers and (unless
otherwise expressly provided in any Loan Document) shall be secured by the
Agent's Lien upon all Collateral; provided that the Agent and each Lender shall
be deemed to be a creditor of, and the holder of a separate claim against, each
Borrower to the extent of any Obligations jointly or severally owed by such
Borrower.
4.6. Effect of Termination. On the effective date of any termination of
the Revolving Commitments, all Obligations shall be immediately due and payable,
and Bank of America and its Affiliates may terminate their respective Bank
Products (including, with the consent of the Agent, any Cash Management
Services). All undertakings of the Borrowers contained in the Loan Documents
shall survive any termination, and the Agent shall retain its Liens in the
Collateral and all of its rights and remedies under the Loan Documents until
Full Payment of the Obligations. Notwithstanding Full Payment of the
Obligations, the Agent shall not be required to terminate its Liens in any
Collateral unless, with respect to any damages the Agent may incur as a result
of the dishonor or return of Payment Items applied to Obligations, the Agent
receives (a) a written agreement, executed by the Borrowers and any Person whose
advances are used in whole or in part to satisfy the Obligations, indemnifying
the Agent and the Lenders from any such damages or (b) such Cash Collateral as
the Agent, in its discretion, deems necessary to protect against any such
damages. The provisions of Sections 2.3, 3.4, 3.6, 3.7, 3.9, 5.5, 5.9, 12,
LOAN AND SECURITY AGREEMENT
Page 53
14.2, 14.3, and this Section shall survive Full Payment of the Obligations and
(unless expressly provided) any release relating to this credit facility.
SECTION 5. PAYMENTS
5.1. General Payment Provisions. All payments of Obligations shall be
made in Dollars, without offset, counterclaim, or defense of any kind, free of
(and without deduction for) any Taxes, and in immediately available funds, not
later than 12:00 noon on the due date. Any payment after such time shall be
deemed made on the next Business Day. The Borrowers may, at the time of payment,
specify to the Agent the Obligations to which such payment is to be applied, but
the Agent shall in all events retain the right to apply such payment in such
manner as the Agent, subject to the provisions hereof, may determine to be
appropriate. If any payment under the Loan Documents shall be stated to be due
on a day other than a Business Day, the due date shall be extended to the next
Business Day and such extension of time shall be included in any computation of
interest and fees. Any payment of a LIBOR Revolving Loan prior to the end of its
Interest Period shall be accompanied by all amounts due under Section 3.9. Any
prepayment of Revolving Loans shall be applied first to Base Rate Revolving
Loans and then to LIBOR Revolving Loans.
5.2. Repayment of Revolving Loans. Revolving Loans shall be due and
payable in full on the Termination Date, unless payment is sooner required
hereunder. Revolving Loans may be prepaid from time to time, without penalty or
premium. At all times after the occurrence of an Event of Default, to the extent
any Revolving Loans are outstanding, the Borrowers shall remit to the Agent for
application to the Obligations the Net Proceeds of any disposition of Collateral
received by such Borrower. Notwithstanding anything herein to the contrary, if
an Overadvance exists, the Borrowers shall, on the sooner of the Agent's demand
or the first Business Day after any Borrower has knowledge thereof, repay the
outstanding Revolving Loans in an amount sufficient to reduce the principal
balance of Revolving Loans to the Borrowing Base.
5.3. Reserved.
5.4. Payment of Other Obligations. Obligations other than Revolving
Loans, including LC Obligations and Extraordinary Expenses, shall be paid by the
Borrowers as provided in the Loan Documents or, if no payment date is specified,
on demand.
5.5. Marshaling; Payments Set Aside. None of the Agent or the Lenders
shall be under any obligation to marshal any assets in favor of any Obligor or
against any Obligations. If any Obligor makes a payment to the Agent or the
Lenders, or if the Agent or any Lender receives payment from the proceeds of
Collateral, exercise of setoff, or otherwise, and such payment is subsequently
invalidated or required to be repaid to a trustee, receiver, or any other
Person, then the Obligations originally intended to be satisfied, and all Liens,
rights, and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been received and any enforcement or setoff
had not occurred.
LOAN AND SECURITY AGREEMENT
Page 54
5.6. Post-Default Allocation of Payments.
5.6.1. Allocation. Notwithstanding anything herein to the
contrary, during an Event of Default, monies to be applied to the
Obligations, whether arising from payments by the Obligors, realization
on Collateral, or otherwise, shall be allocated as follows:
(a) first, to all fees and expenses, including
Extraordinary Expenses, owing to the Agent;
(b) second, to all amounts owing to the Agent on
Agent Advances or Protective Advances, or to the Issuing Bank
on LC Obligations;
(c) third, to all Obligations constituting fees
(excluding amounts relating to Bank Products);
(d) fourth, to all Obligations constituting interest
(excluding amounts relating to Bank Products);
(e) fifth, to provide Cash Collateral for outstanding
Letters of Credit;
(f) sixth, to all other Obligations, other than Bank
Product Debt; and
(g) last, to Bank Product Debt.
Amounts shall be applied to each category of Obligations set forth
above until Full Payment thereof and then to the next category. If
amounts are insufficient to satisfy a category, they shall be applied
on a pro rata basis among the Obligations in the category. The
allocations set forth in this Section are solely to determine the
rights and priorities of the Agent and the Lenders as among themselves,
and may be changed by agreement among them without the consent of any
Obligor. This Section is not for the benefit of or enforceable by any
Borrower.
5.6.2. Erroneous Application. The Agent shall not be liable
for any application of amounts made by it in good faith and, if any
such application is subsequently determined to have been made in error,
the sole recourse of any Lender or other Person to which such amount
should have been made shall be to recover the amount from the Person
that actually received it (and, if such amount was received by any
Lender, such Lender hereby agrees to return it).
5.7. Application of Payments. At all times after the occurrence of an
Event of Default, the ledger balance in any Dominion Account as of the end of a
Business Day shall be applied to the Obligations at the beginning of the next
Business Day. Each Borrower irrevocably waives the right to direct the
application of any payments or Collateral proceeds pursuant to this Section 5.7,
and agrees that the Agent shall have the continuing, exclusive right to apply
and reapply same against the Obligations, in such manner as the Agent deems
advisable, notwithstanding any entry by the Agent in its records. If, as a
result of the Agent's receipt of Payment Items or proceeds of Collateral, a
credit balance exists, the balance shall not accrue interest in favor of the
Borrowers and shall be made available to the Borrowers as long as no Event of
Default exists.
LOAN AND SECURITY AGREEMENT
Page 55
5.8. Loan Account; Account Stated.
5.8.1. Loan Account. The Agent shall maintain in accordance
with its usual and customary practices an account or accounts ("Loan
Account") evidencing the Indebtedness of the Borrowers resulting from
each Revolving Loan or issuance of a Letter of Credit from time to
time, including the amount of principal and interest payable and
outstanding LC Obligations. Any failure of the Agent to record anything
in the Loan Account, or any error in doing so, shall not limit or
otherwise affect the obligation of the Borrowers to pay any amount
owing hereunder. The Agent may maintain a single Loan Account in the
name of the Borrower Agent, and each Borrower confirms that such
arrangement shall have no effect on the joint and several character of
its liability for the Obligations.
5.8.2. Entries Binding. Entries made in the Loan Account shall
constitute presumptive evidence of the information contained therein.
If any information contained in the Loan Account is provided to or
inspected by any Person, then such information shall be conclusive and
binding on such Person for all purposes absent manifest error, except
to the extent such Person notifies the Agent in writing within 30 days
after receipt or inspection that specific information is subject to
dispute.
5.9. Gross Up for Taxes. If the Borrowers shall be required by
Applicable Law to withhold or deduct any Taxes (except Excluded Taxes) from or
in respect of any sum payable under any Loan Documents, (a) the sum payable to
the Agent or such Lender shall be increased as may be necessary so that, after
making all required withholding or deductions, the Agent or such Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such withholding or deductions been made, (b) the Borrowers shall make such
withholding or deductions, and (c) the Borrowers shall pay the full amount
withheld or deducted to the relevant taxing or other authority in accordance
with Applicable Law. If the Agent or any Lender determines that it has received
a refund, credit, or other reduction of taxes in respect of any Taxes paid by
the Borrowers pursuant to this Section, such Person shall, within 30 days from
the date of receipt of such refund or filing of the tax return giving rise to
such credit or other reduction, pay over the amount of the refund, credit, or
tax reduction to the Borrowers (but only to the extent of Taxes paid by the
Borrowers pursuant to this Section), net of all out-of-pocket expenses of such
Person and without interest (other than interest paid by the relevant taxing
authority with respect to a refund).
5.10. Withholding Tax Exemption. At least five Business Days prior to
the first date for payment of interest or fees hereunder to a Foreign Lender,
the Foreign Lender shall deliver to the Borrowers and the Agent two duly
completed copies of IRS Form W-8BEN or W-8ECI (or any subsequent replacement or
substitute form therefor), certifying that such Lender can receive payment of
Obligations without deduction or withholding of any United States federal income
taxes. Each Foreign Lender shall deliver to the Borrowers and the Agent two
additional copies of such form before the preceding form expires or becomes
obsolete or after the occurrence of any event requiring a change in the form, as
well as any amendments, extensions, or renewals thereof as may be reasonably
requested by the Borrowers or the Agent, in each case, certifying that the
Foreign Lender can receive payment of Obligations without deduction or
withholding of any such taxes, unless an event (including any change in treaty
or law) has occurred that renders
LOAN AND SECURITY AGREEMENT
Page 56
such forms inapplicable or prevents the Foreign Lender from certifying that it
can receive payments without deduction or withholding of such taxes. During any
period that a Foreign Lender does not or is unable to establish that it can
receive payments without deduction or withholding of such taxes, other than by
reason of an event (including any change in treaty or law) that occurs after it
becomes a Lender, the Agent may withhold taxes from payments to such Foreign
Lender at the applicable statutory and treaty rates, and the Borrowers shall not
be required to pay any additional amounts under this Section as a result of such
withholding.
5.11. Nature and Extent of Each Borrower's Liability.
5.11.1. Joint and Several Liability. Each Borrower agrees that
it is jointly and severally liable for, and absolutely and
unconditionally guarantees to the Agent and the Lenders the prompt
payment and performance of, all Obligations and all agreements under
the Loan Documents. Each Borrower agrees that its guaranty obligations
hereunder constitute a continuing guaranty of payment and performance
and not of collection, that such obligations shall not be discharged
until Full Payment of the Obligations, and that such obligations are
absolute and unconditional, irrespective of (a) the genuineness,
validity, regularity, enforceability, subordination, or any future
modification of, or change in, any Obligations or Loan Document, or any
other document, instrument, or agreement to which any Obligor is or may
become a party or liable, (b) the absence of any action to enforce this
Agreement (including this Section) or any other Loan Document, or any
waiver, consent, or indulgence of any kind by the Agent or any Lender
with respect thereto, (c) the existence, value, or condition of, or
failure to perfect a Lien or to preserve rights against, any security
or guaranty for the Obligations or any action, or the absence of any
action, by the Agent or any Lender in respect thereof (including the
release of any security or guaranty), (d) the insolvency of any
Obligor, (e) any election by the Agent or any Lender in an Insolvency
Proceeding for the application of Section 1111(b)(2) of the Bankruptcy
Code, (f) any borrowing or grant of a Lien by any other Borrower as
debtor-in-possession under Section 364 of the Bankruptcy Code or
otherwise, (g) the disallowance of any claims of the Agent or any
Lender against any Obligor for the repayment of any Obligations under
Section 502 of the Bankruptcy Code or otherwise, or (h) any other
action or circumstances that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, except Full
Payment of all Obligations.
5.11.2. Waivers.
(a) Each Borrower expressly waives all rights that it
may have now or in the future under any statute, at common
law, in equity or otherwise, to compel the Agent or the
Lenders to marshal assets or to proceed against any Obligor,
other Person or security for the payment or performance of any
Obligations before, or as a condition to, proceeding against
such Borrower. It is agreed among each Borrower, the Agent,
and the Lenders that the provisions of this Section are of the
essence of the transaction contemplated by the Loan Documents
and that, but for such provisions, the Agent and the Lenders
would decline to make Revolving Loans and issue Letters of
Credit. Notwithstanding anything to the contrary in any Loan
Document, and except as set forth in Section 5.11.3,
LOAN AND SECURITY AGREEMENT
Page 57
each Borrower expressly waives all rights at law or in equity
to subrogation, reimbursement, exoneration, contribution,
indemnification, or set off, as well as all defenses available
to a surety, guarantor, or accommodation co-obligor. Each
Borrower acknowledges that its guaranty pursuant to this
Section is necessary to the conduct and promotion of its
business, and can be expected to benefit such business.
(b) The Agent and the Lenders may, in their
discretion, pursue such rights and remedies as they deem
appropriate, including realization upon Collateral by judicial
foreclosure or non-judicial sale or enforcement, without
affecting any rights and remedies under this Section 5.11. If,
in the exercise of any rights or remedies, the Agent or any
Lender shall forfeit any of its rights or remedies, including
its right to enter a deficiency judgment against any Borrower
or any other Person, whether because of any applicable laws
pertaining to "election of remedies" or otherwise, each
Borrower consents to such action by the Agent or such Lender
and waives any claim based upon such action, even if the
action may result in loss of any rights of subrogation that
any Borrower might otherwise have had but for such action. Any
election of remedies that results in denial or impairment of
the right of the Agent or any Lender to seek a deficiency
judgment against any Borrower shall not impair any other
Borrower's obligation to pay the full amount of the
Obligations. Each Borrower waives all rights and defenses
arising out of an election of remedies, such as nonjudicial
foreclosure with respect to any security for the Obligations,
even though that election of remedies destroys such Borrower's
rights of subrogation against any other Person. If the Agent
bids at any foreclosure or trustee's sale or at any private
sale, the Agent may bid all or a portion of the Obligations
and the amount of such bid need not be paid by the Agent but
shall be credited against the Obligations. The amount of the
successful bid at any such sale, whether the Agent or any
other Person is the successful bidder, shall be conclusively
deemed to be the fair market value of the Collateral, and the
difference between such bid amount and the remaining balance
of the Obligations shall be conclusively deemed to be the
amount of the Obligations guaranteed under this Section 5.11,
notwithstanding that any present or future law or court
decision may have the effect of reducing the amount of any
deficiency claim to which the Agent or any Lender might
otherwise be entitled but for such bidding at any such sale.
5.11.3. Extent of Liability; Contribution.
(a) Notwithstanding anything herein to the contrary,
each Borrower's liability under this Section 5.11 shall be
limited to the greater of (i) all amounts for which such
Borrower is primarily liable, as described below and (ii) such
Borrower's Allocable Amount.
(b) If any Borrower makes a payment under this
Section 5.11 of any Obligations (other than amounts for which
such Borrower is primarily liable) (a "Guarantor Payment")
that, taking into account all other Guarantor Payments
previously or concurrently made by any other Borrower, exceeds
the amount that
LOAN AND SECURITY AGREEMENT
Page 58
such Borrower would otherwise have paid if each Borrower had
paid the aggregate Obligations satisfied by such Guarantor
Payments in the same proportion that such Borrower's Allocable
Amount bore to the total Allocable Amounts of all Borrowers,
then such Borrower shall be entitled to receive contribution
and indemnification payments from, and to be reimbursed by,
each other Borrower for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment. The "Allocable
Amount" for any Borrower shall be the maximum amount that
could then be recovered from such Borrower under this Section
5.11 without rendering such payment voidable or avoidable
under Section 548 of the Bankruptcy Code or under any
applicable state fraudulent transfer or conveyance act, or
similar statute or common law.
(c) Nothing contained in this Section 5.11 shall
limit the liability of any Borrower to pay Revolving Loans
made directly or indirectly to that Borrower (including
Revolving Loans advanced to any other Borrower and then
re-loaned or otherwise transferred to, or for the benefit of,
such Borrower), LC Obligations relating to Letters of Credit
issued to support such Borrower's business, and all accrued
interest, fees, expenses, and other related Obligations with
respect thereto, for which such Borrower shall be primarily
liable for all purposes hereunder. The Agent and the Lenders
shall have the right, at any time in their discretion, to
condition Revolving Loans and Letters of Credit upon a
separate calculation of borrowing availability for each
Borrower and to restrict the disbursement and use of such
Revolving Loans and Letters of Credit to such Borrower.
5.11.4. Joint Enterprise. Each Borrower has requested that the
Agent and the Lenders make the credit facility established hereunder
available to the Borrowers on a combined basis, in order to finance the
Borrowers' business most efficiently and economically. The Borrowers'
business is a mutual and collective enterprise, and the Borrowers
believe that consolidation of their credit facility will enhance the
borrowing power of each Borrower and ease the administration of their
relationship with the Lenders, all to the mutual advantage of the
Borrowers. The Borrowers acknowledge and agree that the Agent's and the
Lenders' willingness to extend credit to the Borrowers and to
administer the Collateral on a combined basis, as set forth herein, is
done solely as an accommodation to the Borrowers and at the Borrowers'
request.
5.11.5. Subordination. Each Borrower hereby subordinates any
claims, including any right of payment, subrogation, contribution, and
indemnity, that it may have at any time against any other Obligor,
howsoever arising, to the Full Payment of all Obligations.
SECTION 6. CONDITIONS PRECEDENT
6.1. Conditions Precedent to Initial Revolving Loans. In addition to
the conditions set forth in Section 6.2, the Lenders shall not be required to
fund any requested Revolving Loan, issue any Letter of Credit, or otherwise
extend credit to the Borrowers hereunder, unless each of the following
conditions has been satisfied:
LOAN AND SECURITY AGREEMENT
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(a) Appropriate Notes shall have been executed by the
Borrowers and delivered to each Lender that requests issuance of a
Note. Each other Loan Document, including the Intercreditor Agreement
and the Mortgage, shall have been duly executed and delivered to the
Agent by each of the signatories thereto, and each Obligor shall be in
compliance with all terms thereof.
(b) The Agent shall have received acknowledgments of all
filings or recordations necessary to perfect its Liens in the
Collateral, as well as UCC and Lien searches and other evidence
satisfactory to the Agent, including UCC financing statements which
terminate or amend existing financing statements covering the
Collateral (excluding any such financing statements in favor of the
"Administrative Agent" as defined in the Second Lien Credit Agreement),
all of such financing statements, amendments, and terminations (taken
as a whole) indicating that the Agent's Liens are the only Liens upon
the Collateral, other than Permitted Liens.
(c) To the extent requested by the Agent, the Agent shall have
received duly executed Lien Waivers from each landlord where any
material amount of Collateral is maintained or held.
(d) To the extent requested by the Agent, the Agent shall have
received duly executed Deposit Account Control Agreements with respect
to any of the Borrowers' Deposit Accounts.
(e) The Agent shall have received certificates, in form and
substance satisfactory to it, from a knowledgeable Senior Officer of
each Borrower certifying that, after giving effect to the initial
Revolving Loans and transactions hereunder, (i) such Borrower is
Solvent, (ii) no Default or Event of Default exists, (iii) the
representations and warranties set forth in Section 9 are true and
correct, and (iv) such Borrower has complied with all agreements and
conditions to be satisfied by it under the Loan Documents.
(f) The Agent shall have received a certificate of a duly
authorized officer of each Obligor, certifying (i) that attached copies
of such Obligor's Organic Documents are true and complete, and in full
force and effect, without amendment except as shown, (ii) that an
attached copy of resolutions authorizing execution and delivery of the
Loan Documents is true and complete, and that such resolutions are in
full force and effect, were duly adopted, have not been amended,
modified, or revoked, and constitute all resolutions adopted with
respect to this credit facility, and (iii) to the title, name, and
signature of each Person authorized to sign the Loan Documents. The
Agent may conclusively rely on this certificate until it is otherwise
notified by the applicable Obligor in writing.
(g) The Agent shall have received a written opinion of Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., as well as any local counsel to the
Borrowers, each in form and substance satisfactory to the Agent.
LOAN AND SECURITY AGREEMENT
Page 60
(h) The Agent shall have received copies of the charter
documents of each Obligor, certified as appropriate by the Secretary of
State or another official of such Obligor's jurisdiction of
organization. The Agent shall have received good standing certificates
for each Obligor, issued by the Secretary of State or other appropriate
official of such Obligor's jurisdiction of organization and each
jurisdiction where such Obligor's conduct of business or ownership of
Property necessitates qualification.
(i) The Agent shall have received copies of policies and
certificates of insurance for the property, casualty, and liability
insurance policies carried by the Borrowers, all in compliance with the
Loan Documents.
(j) The Agent shall have completed its legal due diligence of
the Obligors with results satisfactory to the Agent.
(k) No material adverse change in the financial condition of
any Obligor or in the value of any Collateral shall have occurred since
September 30, 2005.
(l) The Borrowers shall have paid all fees and expenses to be
paid to the Agent and the Lenders on the Closing Date.
(m) Upon giving effect to the initial funding of Revolving
Loans and issuance of Letters of Credit, and the payment by the
Borrowers of all fees and expenses incurred in connection herewith as
well as any payables stretched beyond their customary payment
practices, Availability shall be at least $68,000,000 taking into
account all contractual limitations on the Borrowers' ability to incur
Indebtedness.
6.2. Conditions Precedent to All Credit Extensions. The Agent, the
Issuing Bank, and the Lenders shall not be required to fund any Revolving Loans,
arrange for issuance of any Letters of Credit, or grant any other accommodation
to or for the benefit of the Borrowers, unless the following conditions are
satisfied:
(a) no Default or Event of Default shall exist at the time of,
or result from, such funding, issuance, or grant;
(b) the representations and warranties of each Obligor in the
Loan Documents shall be true and correct on the date of, and upon
giving effect to, such funding, issuance, or grant (except for
representations and warranties that expressly relate to an earlier
date);
(c) all conditions precedent set forth in Section 6.1 and any
other Loan Document shall have been satisfied;
(d) no event shall have occurred or circumstance exist that
has resulted in a Material Adverse Effect; and
(e) with respect to issuance of a Letter of Credit, the LC
Conditions shall have been satisfied.
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Each request (or deemed request) by the Borrowers for funding of a Revolving
Loan, issuance of a Letter of Credit, or grant of an accommodation shall
constitute a representation by the Borrowers that the foregoing conditions are
satisfied on the date of such request and on the date of such funding, issuance,
or grant. As an additional condition to any funding, issuance, or grant, the
Agent shall have received such other information, documents, instruments, and
agreements as it deems appropriate in connection therewith.
6.3. Limited Waiver of Conditions Precedent. If the Agent, the Issuing
Bank, or the Lenders fund any Revolving Loans, arrange for issuance of any
Letters of Credit, or grant any other accommodation when any conditions
precedent are not satisfied (regardless of whether the lack of satisfaction was
known or unknown at the time), it shall not operate as a waiver of (a) the right
of the Agent, the Issuing Bank, and the Lenders to insist upon satisfaction of
all conditions precedent with respect to any subsequent funding, issuance, or
grant nor (b) any Default or Event of Default due to such failure of conditions
or otherwise.
SECTION 7. COLLATERAL
7.1. Grant of Security Interest. To secure the prompt payment and
performance of all Obligations, each Borrower hereby grants to the Agent, for
the benefit of the Secured Parties, a continuing security interest in and Lien
upon all personal Property of such Borrower, including all of the following
Property, whether now owned or hereafter acquired, and, unless noted otherwise,
wherever located:
(a) all Accounts;
(b) all Chattel Paper, including electronic chattel paper;
(c) all Commercial Tort Claims;
(d) all Deposit Accounts;
(e) all Documents;
(f) all General Intangibles, including Payment Intangibles,
Software, and Intellectual Property;
(g) all Goods, including Inventory, Equipment, and fixtures;
(h) all Instruments, excluding any notes or other instruments
payable to such Borrower from any Foreign Subsidiary;
(i) all Investment Property, excluding Equity Interests of
Foreign Subsidiaries and Equity Interests of the Excluded Domestic
Subsidiaries;
(j) all Letter-of-Credit Rights;
(k) all Supporting Obligations;
(l) all Owned Real Estate;
LOAN AND SECURITY AGREEMENT
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(m) all monies, whether or not in the possession or under the
control of the Agent, a Lender, or a bailee or Affiliate of the Agent
or a Lender, including any Cash Collateral;
(n) all accessions to, substitutions for, and all replacements
and products, of the foregoing;
(o) all books and records (including customer lists, files,
correspondence, tapes, computer programs, print-outs, and computer
records) pertaining to the foregoing; and
(p) all proceeds of any of the foregoing Collateral described
in clause (a) through clause (o) preceding in whatever form (excluding
specifically in any such case, any notes or other instruments payable
to such Borrower from any Foreign Subsidiary and Equity Interests of
Foreign Subsidiaries and Equity Interests of the Excluded Domestic
Subsidiaries), including, but not limited to, cash, deposit accounts
(whether or not comprised solely of proceeds), certificates of deposit,
insurance proceeds (including hazard, flood, and credit insurance),
negotiable instruments and other instruments for the payment of money,
chattel paper, security agreements, documents, eminent domain proceeds,
condemnation proceeds, and tort claim proceeds.
7.2. Lien on Deposit Accounts; Cash Collateral.
7.2.1. Deposit Accounts. To further secure the prompt payment
and performance of all Obligations, each Borrower hereby grants to the
Agent, for the benefit of the Secured Parties, a continuing security
interest in and Lien upon all of such Borrower's right, title, and
interest in and to each Deposit Account of such Borrower and any
deposits or other sums at any time credited to any such Deposit
Account, including any sums in any blocked or lockbox accounts or in
any accounts into which such sums are swept. Each Borrower authorizes
and directs each bank or other depository to deliver to the Agent upon
its written demand therefor, made at any time that an Event of Default
exists and without notice to such Borrower (such notice being hereby
waived), all balances in each Deposit Account maintained by such
Borrower with such depository for application to the Obligations then
outstanding. Each Borrower irrevocably appoints the Agent as such
Borrower's attorney-in-fact to collect such balances to the extent any
such delivery is not so made.
7.2.2. Cash Collateral. Any Cash Collateral may be invested,
in the Agent's discretion, in Cash Equivalents, but the Agent shall
have no duty to do so, regardless of any agreement, understanding, or
course of dealing with any Borrower, and shall have no responsibility
for any investment or loss. Each Borrower hereby grants to the Agent,
for the benefit of the Secured Parties, a security interest in all Cash
Collateral held from time to time and all proceeds thereof, as security
for the Obligations, whether such Cash Collateral is held in the Cash
Collateral Account or elsewhere. The Agent may apply Cash Collateral to
the payment of any Obligations, in such order as the Agent may elect,
as they become due and payable. The Cash Collateral Account and all
Cash Collateral shall be under the sole dominion and control of the
Agent. No Borrower or other Person
LOAN AND SECURITY AGREEMENT
Page 63
claiming through or on behalf of any Borrower shall have any right to
any Cash Collateral, until Full Payment of all Obligations.
7.3. Real Estate Collateral. The Obligations shall also be secured by
the Mortgage upon the Owned Real Estate. The Mortgage shall be duly recorded, at
the Borrowers' expense, in the office where such recording is required to
constitute a fully perfected Lien on the Owned Real Estate.
7.4. Other Collateral.
7.4.1. Commercial Tort Claims. The Borrowers shall promptly
notify the Agent in writing if any Borrower has a Commercial Tort Claim
(other than, as long as no Event of Default exists, a Commercial Tort
Claim for less than $500,000) and, upon the Agent's request, shall
promptly execute such documents and take such actions as the Agent
deems appropriate to confer upon the Agent (for the benefit of the
Secured Parties) a duly perfected, first priority Lien upon such claim.
7.4.2. Certain After-Acquired Collateral. The Borrowers shall
promptly notify the Agent in writing if, after the Closing Date, any
Borrower obtains any interest in any Collateral consisting of Deposit
Accounts, Chattel Paper, Documents, Instruments, Intellectual Property,
Investment Property, or Letter-of-Credit Rights and, upon the Agent's
request, shall promptly execute such documents and take such actions as
the Agent deems appropriate to effect the Agent's duly perfected, first
priority Lien upon such Collateral, including obtaining any appropriate
possession, control agreement, or Lien Waiver. If any Collateral is in
the possession of a third party, at the Agent's request, the Borrowers
shall obtain an acknowledgment that such third party holds the
Collateral for the benefit of the Agent.
7.5. No Assumption of Liability. The Lien on Collateral granted
hereunder is given as security only and shall not subject the Agent or any
Lender to, or in any way modify, any obligation or liability of the Borrowers
relating to any Collateral.
7.6. Further Assurances. Promptly upon request, the Borrowers shall
deliver such instruments, assignments, title certificates, or other documents or
agreements, and shall take such actions, as the Agent deems appropriate under
Applicable Law to evidence or perfect its Lien on any Collateral. Each Borrower
authorizes the Agent to file any financing statement that indicates the
Collateral as "all assets" or "all personal property" of such Borrower, or words
to similar effect, and ratifies any action taken by the Agent before the Closing
Date to effect or perfect its Lien on any Collateral.
SECTION 8. COLLATERAL ADMINISTRATION
8.1. Borrowing Base Certificates. By the fifteenth day of each calendar
month, or more frequently as the Agent may request, the Borrowers shall deliver
to the Agent (and the Agent shall promptly deliver same to the Lenders) a
Borrowing Base Certificate prepared as of the last day of the preceding calendar
month. All calculations of Availability in any Borrowing Base Certificate shall
originally be made by the Borrowers and certified by a Senior Officer of the
Borrower Agent or such other officer of the Borrower Agent as may be acceptable
to the
LOAN AND SECURITY AGREEMENT
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Agent, provided that the Agent may from time to time review and adjust
any such calculation (a) to reflect collections of Accounts received and (b) to
the extent the calculation is not made in accordance with this Agreement or does
not accurately reflect Reserves imposed by the Agent.
8.2. Administration of Accounts.
8.2.1. Records and Schedules of Accounts. Each Borrower shall
keep accurate and complete records of its Accounts, including all
payments and collections thereon, and shall submit to the Agent, on
such periodic basis as the Agent may request, a sales and collections
report, in form satisfactory to the Agent. Each Borrower shall also
provide to the Agent, on or before the 15th day of each month, a
detailed aged trial balance of all Accounts as of the end of the
preceding month, in form satisfactory to the Agent. Upon request of the
Agent, the Borrowers will deliver to the Agent, for each of their
respective Account Debtors, contact information, including names,
addresses, and telephone numbers, in form satisfactory to the Agent. If
Accounts in an aggregate face amount of $10,000,000 or more cease to be
Eligible Accounts or Eligible Foreign Accounts, as applicable, the
Borrowers shall notify the Agent of such occurrence promptly (and in
any event within three Business Days) after any Borrower has knowledge
thereof.
8.2.2. Taxes. If an Account of any Borrower includes a charge
for any Taxes, the Agent is authorized, in its discretion, to pay the
amount thereof to the proper taxing authority for the account of such
Borrower and to charge the Borrowers therefor; provided that neither
the Agent nor the Lenders shall be liable for any Taxes that may be due
from the Borrowers or with respect to any Collateral.
8.2.3. Account Verification. Whether or not a Default or Event
of Default exists, the Agent shall have the right at any time, in the
name of the Agent, any designee of the Agent, or any Borrower, to
verify the validity, amount, or any other matter relating to any
Accounts of the Borrowers by mail, telephone, or otherwise. The
Borrowers shall cooperate fully with the Agent in an effort to
facilitate and promptly conclude any such verification process, and the
Agent will, if any such verification is being conducted when no Event
of Default exists, use reasonable efforts to inform the Borrower (by
mail, telephone, or otherwise) that the Agent plans to conduct such
verifications.
8.2.4. Maintenance of Dominion Account. The Borrowers shall
maintain Dominion Accounts pursuant to arrangements acceptable to the
Agent. To the extent requested by the Agent, the Borrowers shall obtain
an agreement (in form and substance satisfactory to the Agent) from any
lockbox servicer utilized by a Borrowers or the depository institution
maintaining a Dominion Account (to the extent such depository
institution is not the Agent), establishing the Agent's control over
and Lien in such lockbox or Dominion Account, requiring immediate
deposit of all remittances received in such lockbox to a Dominion
Account or immediate transfer of all funds in such Dominion Account to
the Agent for application to the Obligations, as applicable, and
waiving offset rights of such servicer or bank against any funds
collected in such lockbox or deposited into such Dominion Account,
except offset rights for customary administrative charges. The Agent
and the Lenders agree that the Agent's control over any lockbox or
Dominion Account pursuant to this Section shall only be exercised after
LOAN AND SECURITY AGREEMENT
Page 65
the occurrence of an Event of Default. Each agreement with any lockbox
servicer or depository maintaining a Dominion Account will provide that
the Agent's authority to direct the deposit or transfer of funds
received in such lockbox or deposited in such Dominion Account will not
be effective until written notice is given by the Agent to such lockbox
servicer or Dominion Account depository. Neither the Agent nor the
Lenders assume any responsibility to the Borrowers for any lockbox
arrangement or Dominion Account, including any claim of accord and
satisfaction or release with respect to any Payment Items accepted by
any bank.
8.2.5. Proceeds of Collateral. After the occurrence of an
Event of Default, upon request of the Agent, the Borrowers shall
request in writing and otherwise take all reasonable steps to ensure
that all payments on Accounts and all proceeds of the sale of any other
Collateral are made directly to a Dominion Account (or a lockbox
relating to a Dominion Account). After the occurrence of an Event of
Default, if any Borrower or Subsidiary receives cash or Payment Items
with respect to any Collateral, it shall hold same in trust for the
Agent and promptly (not later than the next Business Day) deposit same
into a Dominion Account.
8.3. Administration of Inventory.
8.3.1. Records and Reports of Inventory. Each Borrower shall
keep accurate and complete records of its Inventory and shall submit to
the Agent inventory reports in form reasonably satisfactory to the
Agent (including a listing of the locations of the Borrowers'
Inventory), concurrently with submission of each of the financial
statements delivered to the Agent pursuant to Section 10.1.2(b) as of
the last day of the preceding calendar month.
8.3.2. Maintenance. The Borrowers shall use, store, and
maintain all Inventory with reasonable care and caution, in accordance
with applicable standards of any insurance and in conformity with all
Applicable Law, and shall make current rent payments (within applicable
grace periods provided for in leases) at all locations where any
Collateral is located.
8.4. Administration of Equipment.
8.4.1. Records and Schedules of Equipment. Each Borrower shall
keep accurate and complete records of its Equipment, including kind,
quality, quantity, cost, acquisitions, and dispositions thereof, and
shall submit to the Agent, on such periodic basis as the Agent may
request, a current schedule thereof, in form satisfactory to the Agent.
8.4.2. Condition of Equipment. Each Borrower shall keep its
material Equipment that is necessary for the operation of its business
in good operating condition and repair, and make all necessary
replacements and repairs so that the value and operating efficiency of
the Equipment is preserved at all times, reasonable wear and tear
excepted. No Borrower shall permit any Equipment to become affixed to
real Property unless any landlord or mortgagee delivers a Lien Waiver
or similar instrument.
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8.5. Administration of Deposit Accounts. Schedule 8.5 sets forth all
Deposit Accounts maintained by the Borrowers. Each Borrower shall take all
actions necessary to establish the Agent's control of each such Deposit Account
(other than an account exclusively used for payroll, payroll taxes, or employee
benefits, or an account containing not more that $10,000 at any time). Each
Borrower shall be the sole account holder of each Deposit Account and shall not
allow any other Person (other than the Agent) to have control over a Deposit
Account or any Property deposited therein. Each Borrower shall promptly notify
the Agent of any opening or closing of a Deposit Account.
8.6. General Provisions.
8.6.1. Location of Equipment. All of the Borrowers' Equipment,
other than de minimus amounts of Equipment as may be in the possession
of employees and agents of the Borrowers, shall at all times be kept by
the Borrowers at the business locations set forth in Schedule 8.6.1,
except that UEI may move Equipment with an aggregate value of up to
$1,600,000 without any prior notice to the Agent.
8.6.2. Insurance of Collateral; Condemnation Proceeds.
(a) Each Borrower shall maintain insurance with
respect to the Collateral, covering casualty, hazard, public
liability, theft, malicious mischief, and such other risks, in
such amounts, with such endorsements, and with such insurers
(rated A+ or better by Best Rating Guide) as are reasonably
satisfactory to the Agent. All proceeds under each policy
shall be payable to the Agent. From time to time upon request,
the Borrowers shall deliver the originals or certified copies
of its insurance policies to the Agent. Unless the Agent shall
agree otherwise, each policy shall include satisfactory
endorsements (i) showing the Agent as loss payee or additional
insured, as appropriate, (ii) requiring 30 days prior written
notice to the Agent in the event of cancellation of the policy
for any reason whatsoever, and (iii) specifying that the
interest of the Agent shall not be impaired or invalidated by
any act or neglect of any Borrower or the owner of the
Property, nor by the occupation of the premises for purposes
more hazardous than are permitted by the policy. If any
Borrower fails to provide and pay for such insurance, the
Agent may, at its option, but shall not be required to,
procure the insurance and charge the Borrowers therefor. Each
Borrower agrees to deliver to the Agent, promptly as rendered,
copies of all reports made to insurance companies. While no
Event of Default exists, the Borrowers may settle, adjust, or
compromise any insurance claim, as long as the proceeds are
delivered to the Agent. If an Event of Default exists, only
the Agent shall be authorized to settle, adjust, and
compromise such claims.
(b) During the existence of an Event of Default, any
proceeds of insurance (other than proceeds from workers'
compensation or D&O insurance) and any awards arising from
condemnation of any Collateral shall be paid to the Agent and
applied to payment of the Obligations in accordance with the
provisions of Section 5.6.1. Proceeds from any business
interruption insurance may be used by the Borrowers in the
Ordinary Course of Business.
LOAN AND SECURITY AGREEMENT
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8.6.3. Protection of Collateral. All expenses of protecting,
storing, warehousing, insuring, handling, maintaining, and shipping any
Collateral, all Taxes payable with respect to any Collateral (including
any sale thereof), and all other payments required to be made by the
Agent to any Person to realize upon any Collateral, shall be borne and
paid by the Borrowers. The Agent shall not be liable or responsible in
any way for the safekeeping of any Collateral, for any loss or damage
thereto (except for reasonable care in its custody while Collateral is
in the Agent's actual possession), for any diminution in the value
thereof, or for any act or default of any warehouseman, carrier,
forwarding agency, or other Person whatsoever, but the same shall be at
the Borrowers' sole risk.
8.6.4. Defense of Title to Collateral. Each Borrower shall at
all times defend its title to Collateral and the Agent's Liens therein
against all Persons, claims, and demands whatsoever, except Permitted
Liens.
8.7. Power of Attorney. Each Borrower hereby irrevocably constitutes
and appoints the Agent (and all Persons designated by the Agent) as such
Borrower's true and lawful attorney (and agent-in-fact) for the purposes
provided in this Section. The Agent, or the Agent's designee, may, without
notice and in either its or a Borrower's name, but at the cost and expense of
the Borrowers:
(a) endorse a Borrower's name on any Payment Item or other
proceeds of Collateral (including proceeds of insurance) that come into
the Agent's possession or control; and
(b) during an Event of Default, (i) notify any Account Debtors
of the assignment of their Accounts, demand, and enforce payment of
Accounts, by legal proceedings or otherwise, and generally exercise any
rights and remedies with respect to Accounts, (ii) settle, adjust,
modify, compromise, discharge, or release any Accounts or other
Collateral, or any legal proceedings brought to collect Accounts or
Collateral, (iii) sell or assign any Accounts and other Collateral upon
such terms, for such amounts and at such times as the Agent deems
advisable, (iv) take control, in any manner, of any proceeds of
Collateral, (v) prepare, file, and sign a Borrower's name to a proof of
claim or other document in a bankruptcy of an Account Debtor, or to any
notice, assignment, or satisfaction of Lien or similar document, (vi)
receive, open, and dispose of mail addressed to a Borrower, and notify
postal authorities to change the address for delivery thereof to such
address as the Agent may designate, (vii) endorse any Chattel Paper,
Document, Instrument, invoice, freight xxxx, xxxx of lading, or similar
document or agreement relating to any Accounts, Inventory, or other
Collateral, (viii) use a Borrower's stationery and sign its name to
verifications of Accounts and notices to Account Debtors, (ix) use the
information recorded on or contained in any data processing equipment
and computer hardware and software relating to any Collateral, (x) make
and adjust claims under policies of insurance, (xi) take any action as
may be necessary or appropriate to obtain payment under any letter of
credit or banker's acceptance for which a Borrower is a beneficiary,
and (xii) take all other actions as the Agent deems appropriate to
fulfill any Borrower's obligations under the Loan Documents.
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SECTION 9. REPRESENTATIONS AND WARRANTIES
9.1. General Representations and Warranties. To induce the Agent and
the Lenders to enter into this Agreement and to make available the Revolving
Commitments, Revolving Loans, and Letters of Credit, each Borrower represents
and warrants that:
9.1.1. Organization and Qualification. Each Borrower is duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its organization. Each Borrower is duly qualified,
authorized to do business, and in good standing as a foreign
corporation in each jurisdiction where failure to be so qualified could
reasonably be expected to have a Material Adverse Effect.
9.1.2. Power and Authority. Each Obligor is duly authorized to
execute, deliver, and perform its Loan Documents. The execution,
delivery, and performance of the Loan Documents have been duly
authorized by all necessary action, and do not (a) require any consent
or approval of any holders of Equity Interests of any Obligor, other
than those already obtained, (b) contravene the Organic Documents of
any Obligor, (c) violate or cause a default under any Applicable Law or
Material Contract, or (d) result in or require the imposition of any
Lien (other than Permitted Liens) on any Property of any Obligor.
9.1.3. Enforceability. Each Loan Document is a legal, valid,
and binding obligation of each Obligor party thereto, enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally and by equitable principles.
9.1.4. Capital Structure. Schedule 9.1.4 shows, for each
Borrower and Subsidiary (a) its name, (b) its jurisdiction of
organization, (c) as of the Closing Date, with respect to each
Subsidiary, whether it is a Restricted Subsidiary or an Unrestricted
Subsidiary, its authorized and issued Equity Interests, and the holders
of its Equity Interests. Each Borrower has good title to its Equity
Interests in its Subsidiaries, free of any Lien other than the Agent's
Liens and Liens pursuant to the Second Lien Credit Agreement, and all
such Equity Interests are duly issued, fully paid, and non-assessable.
9.1.5. Corporate Names; Locations. During the five years
preceding the Closing Date, except as shown on Schedule 9.1.5A, no
Borrower has been known as or used any corporate, fictitious, or trade
names, has been the surviving corporation of a merger or combination,
or has acquired any substantial part of the assets of any Person. The
chief executive offices and other places of business of the Borrowers
as of the Closing Date are shown on Schedule 8.6.1. Except as shown on
Schedule 9.1.5B, during the five years preceding the Closing Date, no
Borrower has had any other office or place of business.
9.1.6. Title to Properties; Priority of Liens. Amkor has
indefeasible title to the Owned Real Estate and each Borrower has good
title (or valid interests in) all of its Property, including all
Property reflected in any financial statements delivered to the Agent
or the Lenders, in each case free of Liens except Permitted Liens. Each
Borrower has paid and discharged all lawful claims that, if unpaid,
could become a Lien on its Properties, other than Permitted Liens or as
are being Properly Contested. The Agent's
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Liens in the Collateral, excluding any Lien on Collateral for which a
certificate of title is issued and the Agent is not in possession of
such certificate of title and listed as first lienholder thereon, are
duly perfected, first priority Liens, subject only to Permitted Liens
that are expressly allowed to have priority over the Agent's Liens.
9.1.7. Accounts. The Agent may rely, in determining which
Accounts are Eligible Accounts and Eligible Foreign Accounts, on all
statements and representations made by the Borrowers with respect
thereto. The Borrowers warrant, with respect to each Account at the
time it is shown as an Eligible Account or an Eligible Foreign Account
in a Borrowing Base Certificate, that:
(a) it is genuine and in all respects what it
purports to be, and is not evidenced by a judgment;
(b) it arises out of a completed, bona fide sale and
delivery of goods or rendition of services in the Ordinary
Course of Business, and substantially in accordance with any
purchase order, contract, or other document relating thereto;
(c) it is for a sum certain, maturing as stated in
the invoice covering such sale or rendition of services, a
copy of which has been furnished or is available to the Agent
on request;
(d) it is not subject to any offset, Lien (other than
the Agent's Lien and the Liens pursuant to the Second Lien
Credit Agreement), deduction, defense, dispute, counterclaim,
or other adverse condition except as arising in the Ordinary
Course of Business and disclosed to the Agent, and it is
absolutely owing by the Account Debtor, without contingency in
any respect;
(e) no purchase order, agreement, document, or
Applicable Law restricts assignment of the Account to the
Agent (regardless of whether, under the UCC, the restriction
is ineffective);
(f) no extension, compromise, settlement,
modification, credit, deduction, or return has been authorized
with respect to the Account, except discounts or allowances
granted in the Ordinary Course of Business for prompt payment
that are reflected on the face of the invoice related thereto
and in the reports submitted to the Agent hereunder; and
(g) to the best of the Borrowers' knowledge, (i)
there are no facts or circumstances that are reasonably likely
to impair the enforceability or collectibility of such Account
and (ii) the Account Debtor had the capacity to contract when
the Account arose, continues to meet the applicable Borrower's
customary credit standards, is Solvent, is not contemplating
or subject to an Insolvency Proceeding, and has not failed or
ceased doing business.
9.1.8. Financial Statements. The consolidated and
consolidating balance sheets, and related statements of income, cash
flow, and shareholder's equity, as applicable, of the Borrowers that
have been and are from time to time hereafter delivered to the Agent
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and the Lenders, are prepared in accordance with GAAP, and fairly
present the financial positions and results of operations of the
Borrowers at the dates and for the periods indicated. Since September
30, 2005 there has been no change in the condition, financial or
otherwise, of any Borrower that could reasonably be expected to have a
Material Adverse Effect. No financial statement delivered to the Agent
or the Lenders at any time contains any untrue statement of a material
fact, nor fails to disclose any material fact necessary to make such
financial statement not materially misleading. Each Borrower is
Solvent.
9.1.9. Surety Obligations. No Borrower is obligated as surety
or indemnitor under any bond or other contract that assures payment or
performance of any obligation of any Person, except as permitted
hereunder.
9.1.10. Taxes. Each Borrower has filed all federal, state, and
local tax returns and other reports that it is required by law to file,
and has paid, or made provision for the payment of, all Taxes upon it,
its income, and its Properties that are due and payable, except to the
extent being Properly Contested or where the failure to do so could
reasonably be expected to result in any liability in excess of
$10,000,000. The provision for Taxes on the books of each Borrower is
adequate for all years not closed by applicable statutes, and for its
current Fiscal Year.
9.1.11. Brokers. There are no brokerage commissions, finder's
fees, or investment banking fees payable in connection with any
transactions contemplated by the Loan Documents.
9.1.12. Intellectual Property. Each Borrower owns or has the
lawful right to use all Intellectual Property reasonably necessary for
the conduct of its business, without conflict with any rights of others
except for any such conflict that could not reasonably be expected to
have a Material Adverse Effect. As of the Closing Date, (a) except as
set forth in Schedule 9.1.17, there is no pending or threatened (in
writing) Intellectual Property Claim with respect to any Borrower or
any of their Intellectual Property, (b) except as disclosed on Schedule
9.1.12, no Borrower pays or owes any Royalty or other compensation to
any Person with respect to any Intellectual Property, and (c) all
Intellectual Property registered in the United States owned, used, or
licensed by any Borrower is shown on Schedule 9.1.12.
9.1.13. Governmental Approvals. Each Borrower has, and is in
compliance with, and is in good standing with respect to, all
Governmental Approvals necessary to conduct its business and to own,
lease, and operate its Properties, in each case in all material
respects. All necessary import, export, or other licenses, permits, or
certificates for the import or handling of any goods or other
Collateral have been procured and are in effect, and the Borrowers have
complied with all foreign and domestic laws with respect to the
shipment and importation of any goods or Collateral, except, in each
case, where such failure or noncompliance could not reasonably be
expected to have a Material Adverse Effect.
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9.1.14. Compliance with Laws. Each Borrower has duly complied,
and its Properties and business operations are in compliance, in all
material respects with all Applicable Law, except where noncompliance
could not reasonably be expected to have a Material Adverse Effect.
There have been no material citations, notices, or orders of
noncompliance issued to any Borrower under any Applicable Law. To each
Borrower's knowledge, no Inventory has been produced in violation of
the FLSA.
9.1.15. Compliance with Environmental Laws. Except as
disclosed on Schedule 9.1.15, no Borrower's operations, Real Estate, or
other Properties are subject to any federal, state, or local
investigation to determine whether any remedial action is needed to
address any environmental pollution, hazardous material, or
environmental clean-up. No Borrower has received any Environmental
Notice. No Borrower has any contingent liability with respect to any
Environmental Release, environmental pollution, or hazardous material
on any Real Estate now or previously owned, leased, or operated by it.
9.1.16. Burdensome Contracts. No Borrower is a party or
subject to any contract, agreement, or charter restriction that could
reasonably be expected to have a Material Adverse Effect. As of the
Closing Date, no Borrower is party or subject to any Restrictive
Agreement, except as shown on Schedule 9.1.16, none of which prohibit
the execution or delivery of any Loan Documents by an Obligor nor the
performance by an Obligor of any obligations thereunder.
9.1.17. Litigation. Except as shown on Schedule 9.1.17, there
are no proceedings or investigations pending or, to any Borrower's
knowledge, threatened against any Borrower, or any of their businesses,
operations, Properties, prospects, or conditions, that (a) relate to
any Loan Documents or transactions contemplated thereby, or (b) as of
the Closing Date, could reasonably be expected to have a Material
Adverse Effect if determined adversely to any Borrower. No Borrower is
in default with respect to any order, injunction, or judgment of any
Governmental Authority.
9.1.18. No Defaults. No event or circumstance has occurred or
exists that constitutes a Default or Event of Default. No Borrower is
in default, and no event or circumstance has occurred or exists that
with the passage of time or giving of notice would constitute a
default, under any Material Contract or in the payment of principal or
interest with respect to any Borrowed Money. Except as could not
reasonably be expected to result in a Material Adverse Effect, there is
no basis upon which any party (other than a Borrower) could terminate a
Material Contract prior to its scheduled termination date.
9.1.19. ERISA. Each Borrower is in full compliance with the
requirements of all Applicable Law, including ERISA, relating to each
Multiemployer Plan. No fact or situation exists that could reasonably
be expected to result in a Material Adverse Effect in connection with
any Multiemployer Plan. No Borrower has any withdrawal liability in
connection with a Multiemployer Plan. As of the Closing Date, no
Borrower has any liability with respect to the Foreign Plans in excess
of the amount specified in Amkor's financial statements dated September
30, 2005 delivered to the Lenders, plus any
LOAN AND SECURITY AGREEMENT
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additional amount accrued in the Ordinary Course of Business since such
date and additional amounts resulting from changes in currency exchange
rates.
9.1.20. Trade Relations. There exists no actual or threatened
termination or limitation of any business relationship between any
Borrower and any customer or supplier, or any group of customers or
suppliers, which individually or in the aggregate could reasonably be
expected to result in a Material Adverse Effect. There exists no
condition or circumstance that could reasonably be expected to
materially impair the ability of any Borrower to conduct its business
at any time hereafter in substantially the manner as conducted on the
Closing Date.
9.1.21. Labor Relations. Except as described on Schedule
9.1.21, as of the Closing Date, no Borrower is party to or bound by any
collective bargaining agreement. There are no material grievances,
disputes, or controversies with any union or other organization of any
Borrower's employees, or, to any Borrower's knowledge, any asserted or
threatened strikes, work stoppages, or demands for collective
bargaining.
9.1.22. Reserved.
9.1.23. Not a Regulated Entity. No Obligor is (a) an
"investment company" or a "person directly or indirectly controlled by
or acting on behalf of an investment company" within the meaning of the
Investment Company Act of 1940, (b) a "holding company," a "subsidiary
company" of a "holding company," or an "affiliate" of either, within
the meaning of the Public Utility Holding Company Act of 1935, or (c)
subject to regulation under the Federal Power Act, the Interstate
Commerce Act, any public utilities code or any other Applicable Law
regarding its authority to incur Indebtedness.
9.1.24. Margin Stock. No Borrower is engaged, principally or
as one of its important activities, in the business of extending credit
for the purpose of purchasing or carrying any Margin Stock. No
Revolving Loan proceeds or Letters of Credit will be used by the
Borrowers to purchase or carry, or to reduce or refinance any
Indebtedness incurred to purchase or carry, any Margin Stock or for any
related purpose governed by Regulations T, U, or X of the Board of
Governors.
9.1.25. Plan Assets. No Borrower is an entity deemed to hold
"plan assets" within the meaning of 29 C.F.R. Section 2510.3-101 of any
"employee benefit plan" (as defined in Section 3(3) of ERISA) that is
subject to Title I of ERISA or any "plan" (within the meaning of
Section 4975 of the Internal Revenue Code), and neither the execution
of this Agreement nor the funding of any Revolving Loans gives rise to
a prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code.
9.2. Complete Disclosure. No Loan Document contains any untrue
statement of a material fact, nor when viewed together with Amkor's periodic
reports filed under the Exchange Act and the rules and regulations promulgated
thereunder fails to disclose any material fact necessary to make the statements
contained therein not materially misleading. There is no fact or circumstance
that any Obligor has failed to disclose to the Agent in writing or is included
in its
LOAN AND SECURITY AGREEMENT
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periodic reports filed under the Exchange Act and the rules and regulations
promulgated thereunder that could reasonably be expected to have a Material
Adverse Effect.
SECTION 10. COVENANTS AND CONTINUING AGREEMENTS
10.1. Affirmative Covenants. For so long as any Revolving Commitments
or Obligations are outstanding, each Borrower shall, and shall cause each other
Obligor to keep the following covenants.
10.1.1. Inspections.
(a) Each Borrower shall, and shall cause each other
Obligor to, permit the Agent from time to time, subject to
(except when a Default or Event of Default exists) reasonable
notice and normal business hours, to visit and inspect the
Properties of any Borrower or Obligor, inspect, audit, and
make extracts from any Borrower's or Subsidiary's books and
records, and discuss with its officers, employees, agents,
advisors, and independent accountants such Borrower's or
Obligor's business, financial condition, assets, prospects,
and results of operations. The Lenders may participate in any
such visit or inspection, at their own expense. Neither the
Agent nor any Lender shall have any duty to any Borrower to
make any inspection, nor to share any results of any
inspection or report with any Borrower.
(b) Each Borrower shall, and shall cause each Obligor
to, reimburse the Agent for all charges, costs, and expenses
of the Agent in connection with examinations of any Obligor's
books and records or any other financial or Collateral matters
as the Agent deems appropriate. Subject to the foregoing, the
Borrowers shall pay the Agent's standard charges ($850 per day
as of the Closing Date) for each day that an employee of the
Agent or its Affiliates is engaged in any examination
activities.
10.1.2. Financial and Other Information. Each Borrower shall,
and shall cause each Obligor to, keep adequate records and books of
account with respect to its business activities, in which proper
entries are made in accordance with GAAP reflecting all financial
transactions, and furnish to the Agent and the Lenders:
(a) as soon as available, and in any event upon the
earlier of 120 days after the end of each Fiscal Year or the
filing of Amkor's annual report on Form 10-K, balance sheets
as of the end of such Fiscal Year and the related statements
of income, cash flow, and shareholders' equity for such Fiscal
Year, on both a consolidated basis for Amkor and its
Subsidiaries and on a consolidating basis for the Borrowers
with respect to balance sheets and statements of income, which
consolidated statements shall be certified by a firm of
independent certified public accountants of recognized
national standing selected by the Borrowers and acceptable to
the Agent, and shall set forth in comparative form
corresponding figures for the preceding Fiscal Year;
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Page 74
(b) as soon as available, and in any event within 35
days after the end of each month, but for each month which is
the last month of a Fiscal Quarter, within the earlier to
occur of 60 days after the last day of such month or the
filing of Amkor's quarterly report on Form 10-Q, unaudited
balance sheets as of the end of such month and the related
statements of income for such month and for the portion of the
Fiscal Year then elapsed, on a consolidated basis and
consolidating basis with respect to balance sheets and
statements of income for the Borrowers and cash flow as of the
end of a Fiscal Quarter on a consolidated basis, setting forth
in comparative form corresponding figures for the preceding
Fiscal Year and certified by the principal financial officer
of the Borrower Agent as prepared in accordance with GAAP and
fairly presenting the financial position and results of
operations for such month and period, subject only to changes
from audit and year-end adjustments and except that such
statements need not contain notes;
(c) concurrently with delivery of financial
statements under clause (a) and clause (b) preceding, or more
frequently if requested by the Agent while a Default or Event
of Default exists, a Compliance Certificate executed by the
chief financial officer of the Borrower Agent or such other
officer of the Borrower Agent as may be acceptable to the
Agent;
(d) concurrently with delivery of financial
statements under clause (a) and clause (b) preceding, (i) a
listing of each new business location of the Borrowers and
(ii) a listing of each registration by any Borrower of any
patent, trademark, or copyright with the United States Patent
and Trademark Office or the United States Copyright Office, as
applicable, together with all information required by the
Agent to perfect the Agent's Liens in such Intellectual
Property;
(e) not later than 30 days prior to the end of each
Fiscal Year, projections of the Borrowers' consolidated
balance sheets, results of operations, cash flow, and
Availability for the next three Fiscal Years, year by year,
and for the next Fiscal Year, on a fiscal quarter basis;
(f) at the Agent's request, a listing of each
Borrower's trade payables, specifying the trade creditor and
balance due, and a detailed trade payable aging, all in form
satisfactory to the Agent;
(g) promptly after the sending or filing thereof, (i)
copies of any proxy statements, financial statements, or
reports that any Borrower has made generally available to its
shareholders, (ii) copies of any regular, periodic, and
special reports or registration statements or prospectuses
that any Borrower files with the Securities and Exchange
Commission or any other Governmental Authority, or any
securities exchange; and (iii) copies of any press releases or
other statements made available by a Borrower to the public
concerning material changes to or developments in the business
of such Borrower;
(h) promptly upon the request of the Agent, copies of
any annual report filed in connection with a Plan, and such
other reports and information
LOAN AND SECURITY AGREEMENT
Page 75
(financial or otherwise) as may be requested by the Agent in
connection with any Collateral or any Obligor's financial
condition or business; and
(i) concurrently with delivery of each Borrowing Base
Certificate provided pursuant to Section 8.1, a calculation of
the Borrowers' cash and Cash Equivalents, as required to
calculate Total Availability, maintained in the United States
as of the effective date of such Borrowing Base Certificate.
Simultaneously with retaining accountants for their annual audit, the
Borrowers shall send a letter to the accountants, with a copy to the
Agent and the Lenders, notifying the accountants that one of the
primary purposes for retaining their services and obtaining audited
financial statements is for use by the Agent and the Lenders. The Agent
is authorized to send such notice if the Borrowers fail to do so for
any reason.
10.1.3. Notices. Each Borrower shall notify the Agent and the
Lenders in writing, promptly after a Borrower's obtaining knowledge
thereof, of any of the following that affects any Obligor: (a) the
threat or commencement of any proceeding or investigation, whether or
not covered by insurance, if an adverse determination could reasonably
be expected to have a Material Adverse Effect; (b) any pending or
threatened labor dispute, strike, or walkout, or the expiration of any
material labor contract to the extent any such dispute, strike,
walkout, or expiration could reasonably be expected to cause a Material
Adverse Effect; (c) any material breach of, event of default under, or
termination prior to its scheduled termination date of a Material
Contract; (d) the existence of any Default or Event of Default; (e) any
judgment in an amount exceeding $1,000,000; (f) the assertion of any
Intellectual Property Claim, if an adverse resolution could reasonably
be expected to have a Material Adverse Effect; (g) any violation or
asserted violation of any Applicable Law (including ERISA, OSHA, FLSA,
or any Environmental Laws), if an adverse resolution could reasonably
be expected to have a Material Adverse Effect; (h) any Environmental
Release by an Obligor or on any Property owned, leased, or occupied by
an Obligor; or receipt of any Environmental Notice; (i) the discharge
of or any withdrawal or resignation by the Borrowers' independent
accountants; or (j) any opening of a new office or place of business.
10.1.4. Reserved.
10.1.5. Compliance with Laws. Each Borrower shall, and shall
cause each Obligor to, comply with all material Applicable Laws,
including ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws,
and laws regarding collection and payment of Taxes, and maintain all
Governmental Approvals necessary to the ownership of its Properties or
conduct of its business, unless, in each case, failure to comply (other
than failure to comply with Anti-Terrorism Laws) or maintain compliance
could not reasonably be expected to have a Material Adverse Effect.
Without limiting the generality of the foregoing, if any Environmental
Release occurs at or on any Properties of any Borrower, it shall act
promptly and diligently to investigate and report to the Agent and all
appropriate Governmental Authorities the extent of, and to make
appropriate remedial action to eliminate, such Environmental Release,
whether or not directed to do so by any Governmental Authority.
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10.1.6. Taxes. Each Borrower shall pay and discharge all
material Taxes prior to the date on which they become delinquent or
penalties attach, unless such Taxes are being Properly Contested.
10.1.7. Insurance. Each Borrower shall, in addition to the
insurance required hereunder with respect to Collateral, maintain
insurance with insurers satisfactory to the Agent with respect to the
Properties and business of the Borrowers of such type, in such amounts,
and with such coverages and deductibles as are customary for companies
similarly situated.
10.1.8. Licenses. Each Borrower shall (a) keep each material
License affecting any Collateral (including the manufacture,
distribution, or disposition of Inventory) or any other material
Property of the Borrowers in full force and effect, (b) pay all
Royalties when due, and (c) notify the Agent of any default or breach
asserted by any Person to have occurred under any material License
affecting any Collateral.
10.1.9. Future Subsidiaries. Each Borrower shall promptly
notify the Agent upon any Person becoming a Subsidiary. Excluding the
Excluded Domestic Subsidiaries, each Domestic Subsidiary formed or
acquired after the Closing Date which at any time has assets in excess
of $10,000, shall guarantee the Obligations in a manner satisfactory to
the Agent, and execute and deliver such documents, instruments, and
agreements and take such other actions as the Agent shall require to
evidence and perfect a Lien in favor of the Agent (for the benefit of
the Secured Parties) on all assets of such Person, including delivery
of such legal opinions, in form and substance satisfactory to the
Agent, as it shall deem appropriate.
10.1.10. Designation of Restricted and Unrestricted
Subsidiaries. The board of directors of Amkor may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary so long as such
designation would not cause a Default or Event of Default hereunder;
provided that Amkor delivers notice of any such designation to the
Agent at least five days prior to the effective date of such
designation. If a Restricted Subsidiary is designated as an
Unrestricted Subsidiary, all outstanding Investments owned by Amkor and
its Restricted Subsidiaries in the Subsidiary so designated will be
deemed to be an Investment made as of the time of such designation and
will reduce the amount available for Restricted Payments under Section
10.2.2 or Permitted Investments, as applicable. All such outstanding
Investments will be valued at their fair market value at the time of
such designation. That designation will only be permitted if such
Restricted Payment would be permitted at that time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The board of directors of Amkor may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if the
redesignation would not cause a Default or Event of Default.
10.2. Negative Covenants. For so long as any Revolving Commitments or
Obligations are outstanding, each Borrower shall, and shall cause each
Subsidiary keep the following covenants.
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10.2.1. Stay, Extension and Usury Laws. Each Borrower
covenants (to the extent that it may lawfully do so) that it shall not,
and that none of the other Obligors shall, at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension, or usury law wherever enacted, now
or at any time hereafter in force, that may affect the covenants or the
performance of this Agreement or any other Loan Document, and each
Borrower hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law,
hinder, delay, or impede the execution of any power herein granted to
the Agent or the Lenders, but shall suffer and permit the execution of
every such power as though no such law has been enacted.
10.2.2. Restricted Payments.
(a) Amkor will not, nor will it permit any of its
Restricted Subsidiaries to, directly or indirectly (w) declare
or pay any dividend or make any other payment or distribution
on account of Amkor's or any of its Restricted Subsidiaries'
Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving Amkor
or any of its Restricted Subsidiaries) or to the direct or
indirect holders of Amkor's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such
(other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of Amkor or to Amkor
or a Restricted Subsidiary of Amkor), (x) purchase, redeem, or
otherwise acquire or retire for value (including, without
limitation, in connection with any merger or consolidation
involving Amkor) any Equity Interests of Amkor or any direct
or indirect parent of Amkor or any Restricted Subsidiary of
Amkor (other than any such Equity Interests owned by Amkor or
any Restricted Subsidiary of Amkor), (y) make any payment on
or with respect to, or purchase, redeem, defease, or otherwise
acquire or retire for value any Subordinated Debt, except a
payment of interest or principal at the Stated Maturity
thereof, or (z) make any Restricted Investment (all such
payments and other actions set forth in clause (w) through
clause (z) preceding being collectively referred to as
"Restricted Payments"), unless, at the time of and after
giving effect to such Restricted Payment:
(i) no Default or Event of Default shall
have occurred and be continuing or would occur as a
consequence thereof;
(ii) Amkor would, at the time of such
Restricted Payment and after giving pro forma effect
thereto as if such Restricted Payment had been made
at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00
of additional Indebtedness pursuant to Section
10.2.4; and
(iii) such Restricted Payment, together with
the aggregate amount of all other Restricted Payments
made by Amkor and its Restricted Subsidiaries after
October 27, 2004 (excluding Restricted Payments
permitted by clause (ii), clause (iii), clause (iv),
clause (vii), and
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clause (ix) of Section 10.2.2(b)), is less than the
sum, without duplication, of (A) 50.0% of the
Consolidated Net Income of Amkor for the period
(taken as one period) from the beginning of the
Fiscal Quarter commencing on April 1, 2003 to the end
of Amkor's most recently ended Fiscal Quarter for
which internal financial statements are available at
the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit,
less 100% of such deficit), plus (B) 100% of the
aggregate net cash proceeds received by Amkor since
May 8, 2003 as a contribution to its common equity
capital or from the issue or sale of Equity Interests
of Amkor (other than Disqualified Stock) (other than
Equity Interests (or Disqualified Stock or debt
securities) sold to a Subsidiary of Amkor), plus (C)
to the extent that any Restricted Investment that was
made after October 27, 2004 is sold for cash or
otherwise liquidated or repaid for cash, the lesser
of (y) the cash return of capital with respect to
such Restricted Investment (less the cost of
disposition, if any) and (z) the initial amount of
such Restricted Investment, plus (D) the amount by
which (1) Indebtedness (other than Disqualified
Stock) of Amkor or any Restricted Subsidiary issued
after the Closing Date is reduced on Amkor's
consolidated balance sheet (if prepared in accordance
with GAAP as of the date of determination) and (2)
Disqualified Stock of Amkor issued after October 27,
2004 (held by any Person other than any Restricted
Subsidiary) is reduced (measured with reference to
its redemption or repurchase price), in each case, as
a result of the conversion or exchange of any such
Indebtedness or Disqualified Stock into Equity
Interests (other than Disqualified Stock) of Amkor,
less, in each case, any cash distributed by Amkor
upon such conversion or exchange, plus (E) to the
extent that any Investment in any Unrestricted
Subsidiary that was made after October 27, 2004 is
sold for cash or otherwise liquidated, repaid for
cash or such Unrestricted Subsidiary is converted
into a Restricted Subsidiary, the lesser of (y) an
amount equal to the sum of (1) the net reduction in
Investments in Unrestricted Subsidiaries resulting
from dividends, repayments of loans or advances, or
other transfers of assets, in each case to Amkor or
any Restricted Subsidiary from Unrestricted
Subsidiaries, and (2) the fair market value of the
net assets of an Unrestricted Subsidiary at the time
such Unrestricted Subsidiary is designated a
Restricted Subsidiary and (z) the remaining amount of
the Investment in such Unrestricted Subsidiary which
has not been repaid or converted into cash or assets.
(b) Section 10.2.2(a) preceding will not prohibit (i)
the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration no Default
or Event of Default has occurred and is continuing or would be
caused thereby and such payment would have complied with the
provisions of this Agreement, (ii) the making of any payment
on or with respect to, or in connection with, the redemption,
repurchase, retirement, defeasance, or other acquisition of,
any Indebtedness of Amkor or any Restricted Subsidiary that is
subordinated to the Obligations or of any Equity Interests of
Amkor or
LOAN AND SECURITY AGREEMENT
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any Restricted Subsidiary in exchange for, or out of the net
cash proceeds of the substantially concurrent sale (other than
to a Subsidiary of Amkor) of, Equity Interests (other than
Disqualified Stock) of Amkor or any subordinated Indebtedness
of Amkor; provided that the amount of any such net cash
proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance, or other acquisition shall
be excluded from clause (a)(iii)(B) preceding, (iii) the
making of any payment on or with respect to, or in connection
with, the defeasance, redemption, repurchase, or other
acquisition of Indebtedness of Amkor or any Restricted
Subsidiary that is subordinated to the Obligations with the
net cash proceeds from the incurrence of Permitted Refinancing
Indebtedness, (iv) the payment of any dividend by a Restricted
Subsidiary of Amkor to the holders of its common capital stock
on a pro rata basis, (v) so long as no Default or Event of
Default has occurred and is continuing or would be caused
thereby, the repurchase, redemption, or other acquisition or
retirement for value of any Equity Interests of Amkor or any
Restricted Subsidiary of Amkor held by any employee of Amkor
or any Restricted Subsidiary pursuant to any employee equity
subscription agreement, stock ownership plan, or stock option
agreement in effect from time to time; provided that the
aggregate price paid for all such repurchased, redeemed,
acquired, or retired Equity Interests shall not exceed
$2,000,000 in any twelve-month period and $10,000,000 in the
aggregate since October 27, 2004, (vi) the making of any
payment on or with respect to, or repurchase, redemption,
defeasance, or other acquisition or retirement for value of
the Convertible Subordinated Notes in connection with (A) so
long as no Event of Default has occurred and is continuing or
would be caused thereby, an optional redemption of any
Convertible Subordinated Notes on or after the dates such
notes become redeemable or (B) the honoring by Amkor of any
conversion request into Equity Interests (other than
Disqualified Stock) by a holder of any Convertible
Subordinated Notes or any future convertible notes of Amkor
(including the payment by Amkor of any cash in lieu of
fractional shares) in accordance with their terms, (vii) that
portion of Investments the payment for which consists
exclusively of Equity Interests (other than Disqualified
Stock) of Amkor, (viii) so long as no Default or Event of
Default has occurred and is continuing or would be caused
thereby, other Restricted Payments in an aggregate amount not
to exceed $75,000,000 during the period beginning October 27,
2004 and continuing through and including the Termination
Date, (ix) the repurchase of Equity Interests of Amkor that
may be deemed to occur upon the exercise of stock options if
such Equity Interests represent a portion of the exercise
price thereof, (x) any payments to one or more shareholders of
Amkor in connection with settling shareholder obligations for
income taxes in respect of tax periods ending prior to the
conversion of Amkor from "S" corporation status to "C"
corporation status, and (xi) in the case of an Asset Sale, any
mandatory offer to repurchase the Senior Subordinated Notes in
connection with an Asset Sale after Amkor has complied with
its obligations to the Lenders under Section 5.2.
(c) The amount of all Restricted Payments (other than
cash) shall be the fair market value on the date of the
Restricted Payment of the asset(s) or securities proposed to
be transferred or issued by Amkor or such Restricted
LOAN AND SECURITY AGREEMENT
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Subsidiary, as the case may be, pursuant to the Restricted
Payment. The fair market value of any assets or securities
that are required to be valued by this covenant with a fair
market value in excess of $1,000,000 but less than $5,000,000
shall be evidenced by an Officers' Certificate which shall be
delivered to the Agent. The fair market value of any assets or
securities that are required to be valued by this covenant
with a fair market value in excess of $5,000,000 shall be
determined by Amkor's board of directors whose resolution with
respect thereto shall be delivered to the Agent. Not later
than the date of making any Restricted Payment, Amkor shall
deliver to the Agent an Officers' Certificate stating that
such Restricted Payment is permitted and setting forth the
basis upon which the calculations required by this Section
10.2.2 were computed, together with a copy of any fairness
opinion or appraisal required by this Agreement.
10.2.3. Dividend and Other Payment Restrictions Affecting
Subsidiaries. Amkor shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to
exist or become effective any encumbrance or restriction on the ability
of any Restricted Subsidiary to (a)(i) pay dividends or make any other
distributions to Amkor or any of its Restricted Subsidiaries (A) on
such Restricted Subsidiary's Equity Interests or (B) with respect to
any other interest or participation in, or measured by, such Restricted
Subsidiary's profits or (ii) pay any indebtedness owed to Amkor or any
of its Restricted Subsidiaries, (b) make loans or advances to Amkor or
any of its Restricted Subsidiaries, or (c) transfer any of its
properties or assets to Amkor or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by
reasons of (I) Existing Indebtedness as in effect on the date hereof
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements, or refinancings thereof,
provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements, or refinancings are
no more restrictive, taken as a whole, with respect to such dividend
and other payment restrictions than those contained in such Existing
Indebtedness, as in effect on the date hereof, (II) this Agreement,
(III) applicable law, (IV) any instrument governing Indebtedness or
Equity Interests of a Person acquired by Amkor or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person,
so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Agreement to be
incurred, (V) customary non-assignment provisions in leases, licenses,
and other contracts entered into in the ordinary course of business and
consistent with past practices, (VI) purchase money obligations or
Capital Lease Obligations for property acquired in the ordinary course
of business that impose restrictions on the property so acquired of the
nature described in clause (c) preceding, (VII) any agreement for the
sale or other disposition of a Restricted Subsidiary that restricts
dividends, distributions, loans, advances, or transfers by such
Restricted Subsidiary pending its sale or other disposition, (VIII)
Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being
refinanced, (IX) agreements entered into with respect to Liens
LOAN AND SECURITY AGREEMENT
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securing Indebtedness otherwise permitted to be incurred pursuant to
the provisions of Section 10.2.7 that limit the right of Amkor or any
of its Restricted Subsidiaries to dispose of the assets subject to such
Lien, (X) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar
agreements entered into in the ordinary course of business, (XI)
restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business, (XII) any Receivables Program for any Subsidiary of Amkor
which is not a Borrower, and (XIII) any restriction imposed pursuant to
contracts for the sale of assets with respect to the transfer of the
assets to be sold pursuant to such contract.
10.2.4. Incurrence of Indebtedness and Issuance of Preferred
Stock.
(a) Amkor shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create,
incur, issue, assume, guarantee, or otherwise become directly
or indirectly liable, contingently or otherwise, with respect
to (collectively, "incur") any Indebtedness (including
Acquired Indebtedness), and Amkor will not issue any
Disqualified Stock and will not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock; provided,
however, that Amkor and any Restricted Subsidiary that is a
Subsidiary Guarantor may incur Indebtedness (including
Acquired Indebtedness), and Amkor may issue Disqualified
Stock, and any Restricted Subsidiary that is a Subsidiary
Guarantor may issue preferred stock, if the Consolidated
Interest Expense Coverage Ratio for Amkor's most recently
ended four full Fiscal Quarters for which internal financial
statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such
Disqualified Stock or preferred stock is issued would have
been at least 2.0 to 1.0, determined on a pro forma basis
(including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Stock or preferred stock had
been issued, as the case may be, at the beginning of such
four-quarter period.
(b) Section 10.2.4(a) preceding will not prohibit the
incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by Amkor and its
Restricted Subsidiaries of any Permitted Bank Debt;
provided that the aggregate principal amount of all
such Indebtedness and the Indebtedness under the
Second Lien Credit Agreement at any one time
outstanding shall not exceed the greater of (A)
$100,000,000, plus 85.0% of the consolidated accounts
receivable of Amkor, plus 50.0% of the consolidated
inventory of Amkor and (B) the product of 2.25
multiplied by the Consolidated Cash Flow for Amkor's
most recently ended four full Fiscal Quarters for
which internal financial statements are available
immediately preceding the date on which such
Permitted Bank Debt is incurred; provided, further,
that none of such Indebtedness (including
specifically any Permitted Bank Debt other than the
Obligations) may be secured by any of the Collateral;
LOAN AND SECURITY AGREEMENT
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(ii) the incurrence by Amkor and its
Subsidiaries of Existing Indebtedness;
(iii) the incurrence by the Obligors of the
Obligations;
(iv) the incurrence by Amkor or any of its
Restricted Subsidiaries of (A) Indebtedness incurred
for the purpose of financing all or any part of the
purchase price or cost of construction or improvement
of property, plant, or equipment used in the business
of Amkor or any of its Restricted Subsidiaries and
(B) Capital Lease Obligations, in an aggregate amount
at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund,
refinance, or replace any Indebtedness incurred
pursuant to this clause (iv), not to exceed the
greater of $75,000,000 or 10.0% of Amkor's
Consolidated Net Assets;
(v) the incurrence by Amkor or any of its
Restricted Subsidiaries of Permitted Refinancing
Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance, or replace,
Indebtedness (other than intercompany Indebtedness)
that was permitted by this Agreement to be incurred
under Section 10.2.4(a) or clause (ii), clause (v),
clause (xiii), or clause (xiv) of this Section
10.2.4(b);
(vi) the incurrence by Amkor or any of its
Restricted Subsidiaries of intercompany Indebtedness
between or among Amkor and any of its Restricted
Subsidiaries; provided, however, that (A) if Amkor or
any Subsidiary Guarantor is the obligor on such
Indebtedness and such Indebtedness is in favor of a
Restricted Subsidiary other than a Wholly Owned
Restricted Subsidiary, such Indebtedness must be
expressly subordinated to the prior payment in full
in cash of the Obligations and (B)(I) any subsequent
issuance or transfer of Equity Interests that results
in such Indebtedness being held by a Person other
than Amkor or a Wholly Owned Restricted Subsidiary
thereof and (II) any sale or other transfer of any
such Indebtedness to a Person that is not either
Amkor or a Wholly Owned Restricted Subsidiary
thereof, shall be deemed, in each case, to constitute
an incurrence of such Indebtedness by Amkor or such
Restricted Subsidiary, as the case may be, that was
not permitted by this clause (vi);
(vii) the incurrence by Amkor or any of its
Restricted Subsidiaries of Hedging Obligations that
are incurred for the purpose of fixing or hedging
interest rate, commodity, or currency risk in the
ordinary course of business for bona fide hedging
purposes; provided that the notional principal amount
of any such Hedging Obligation with respect to
interest rates does not exceed the amount of
Indebtedness or other liability to which such Hedging
Obligation relates;
LOAN AND SECURITY AGREEMENT
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(viii) the Guarantee by Amkor or any of the
Subsidiary Guarantors or a Restricted Subsidiary of
Amkor that was permitted to be incurred by another
provision of this Section 10.2.4;
(ix) the incurrence by Amkor's Unrestricted
Subsidiaries of Non-Recourse Debt; provided, however,
that if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, such
event shall be deemed to constitute an incurrence of
Indebtedness by a Restricted Subsidiary of Amkor that
was not permitted by this clause (ix);
(x) the incurrence of Indebtedness solely in
respect of performance, surety, and similar bonds or
completion or performance Guarantees, to the extent
that such incurrence does not result in the
incurrence of any obligation for the payment of
borrowed money to others;
(xi) the incurrence of Indebtedness arising
from the agreements of Amkor or a Restricted
Subsidiary of Amkor providing for indemnification,
adjustment of purchase price, or similar obligations,
in each case, incurred or assumed in connection with
the disposition of any business, assets, or a
Subsidiary; provided, however, that (A) such
Indebtedness is not reflected as a liability on the
balance sheet of Amkor or any Restricted Subsidiary
of Amkor and (B) the maximum assumable liability in
respect of all such Indebtedness shall at no time
exceed the gross proceeds, including non-cash
proceeds (the fair market value of such non-cash
proceeds being measured at the time received and
without giving effect to any subsequent changes in
value), actually received by Amkor and its Restricted
Subsidiaries in connection with such disposition;
(xii) the accrual of interest, accretion or
amortization of original issue discount, the payment
of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the
form of additional shares of the same class of
Disqualified Stock; provided, in each such case, that
the amount thereof is included in Consolidated
Interest Expense of Amkor as accrued;
(xiii) the incurrence of Indebtedness by
Foreign Subsidiaries in an amount not to exceed 10.0%
of the Total Tangible Assets of the Foreign
Subsidiaries, taken as a whole; and
(xiv) the incurrence by Amkor or any of its
Restricted Subsidiaries of additional Indebtedness in
an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to
refund, refinance, or replace any Indebtedness
incurred pursuant to this clause (xiv), not to exceed
$50,000,000.
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Notwithstanding any other provision of this Section 10.2.4(b),
none of the Permitted Debt, other than the Obligations and the
Term Loan, may at any time be secured by a Lien on any or all
of the Collateral.
(c) Indebtedness or preferred stock of any Person
which is outstanding at the time such Person becomes a
Restricted Subsidiary of Amkor (including upon designation of
any Subsidiary or other Person as a Restricted Subsidiary) or
is merged with or into or consolidated with Amkor or a
Restricted Subsidiary of Amkor shall be deemed to have been
incurred at the time such Person becomes such a Restricted
Subsidiary of Amkor or is merged with or into or consolidated
with Amkor or a Restricted Subsidiary of Amkor, as applicable.
(d) Amkor will not incur any Indebtedness (including
Permitted Debt) that is contractually subordinated in right of
payment to any other Indebtedness of Amkor unless such
Indebtedness is also contractually subordinated in right of
payment to the Obligations on substantially identical terms;
provided, however, that no Indebtedness of Amkor shall be
deemed to be contractually subordinated in right of payment to
any other Indebtedness of Amkor solely by virtue of any Liens,
Guarantees, maturity of payments, or structural seniority.
(e) For purposes of determining compliance with this
Section 10.2.4, in the event that an item of proposed
Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clause (b)(i)
through clause (b)(xiv) preceding, or is entitled to be
incurred pursuant to Section 10.2.4(a), Amkor shall, in its
sole discretion, classify or reclassify such item of
Indebtedness (or any part thereof) in any manner that complies
with this Section 10.2.4 and such item of Indebtedness shall
be treated as having been incurred pursuant to only one of
such clauses or pursuant to Section 10.2.4(a). For purposes of
determining any particular amount of Indebtedness under this
Section 10.2.4, Guarantees, Liens, or obligations in support
of letters of credit supporting Indebtedness shall not be
included to the extent such letters of credit are included in
the amount of such Indebtedness. Any increase in the amount of
any Indebtedness solely by reason of currency fluctuations
shall not be considered an incurrence of Indebtedness for
purposes of this covenant. Accrual of interest and the payment
of interest in the form of additional Indebtedness shall not
be deemed to be an incurrence of Indebtedness for purposes of
this Section 10.2.4.
10.2.5. Asset Sales.
(a) The Borrowers shall not, and shall not permit any
of their Restricted Subsidiaries to (i) sell, lease, convey,
or otherwise dispose of any assets or rights (including by way
of a sale-and-leaseback) other than sales of inventory in the
Ordinary Course of Business, (ii) with respect to Amkor, sell
Equity Interests in any of its Subsidiaries, or (iii) with
respect to Amkor's Restricted Subsidiaries, issue Equity
Interests (each of the foregoing, an "Asset Sale"), unless (y)
Amkor (or the Restricted Subsidiary, as the case may be)
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receives consideration at the time of such Asset Sale at least
equal to the fair market value (evidenced by a resolution of
Amkor's board of directors set forth in an Officer's
Certificate delivered to the Agent) of the assets sold or
otherwise disposed of and (z) at least 75.0% of the
consideration received therefor by Amkor or such Restricted
Subsidiary is in the form of cash or other Qualified Proceeds.
(b) Notwithstanding the foregoing, the following
shall not be deemed to be Asset Sales: (i) any single
transaction or series of related transactions that (A)
involves assets having a fair market value of less than
$2,000,000 or (B) results in net proceeds to Amkor and its
Restricted Subsidiaries of less than $2,000,000; (ii) a
transfer of assets between or among Amkor and any Restricted
Subsidiary; (iii) an issuance of Equity Interests by a
Restricted Subsidiary to Amkor or to another Wholly Owned
Restricted Subsidiary; (iv) the sale, lease, conveyance, or
other disposition of any Receivable Program Assets by any
Subsidiary of Amkor that is not a Borrower in connection with
a Receivables Program; (v) the sale, lease, conveyance, or
other disposition of any inventory or other current assets,
excluding Accounts, by a Borrower or any of its Restricted
Subsidiaries in the Ordinary Course of Business; (vi) the
granting of a Permitted Lien or a Permitted Other Lien; (vii)
the licensing by a Borrower or any Restricted Subsidiary of
intellectual property in the Ordinary Course of Business or on
commercially reasonable terms; (viii) the sale, lease,
conveyance, or other disposition of obsolete or worn out
equipment or equipment no longer useful in a Borrower's
business; and (ix) the making or liquidating of any Restricted
Payment or Permitted Investment that is permitted by Section
10.2.2.
(c) Notwithstanding any other provision of this
Agreement to the contrary, no Borrower will enter into any
Asset Sale or other sale, transfer, conveyance, or disposition
of any other asset or property, in each such case if such
Asset Sale, sale, transfer, conveyance, or disposition is of
assets or other property which constitutes Collateral;
provided that the Borrowers may (i) sell Inventory in the
Ordinary Course of Business, (ii) sell, transfer, or convey
property and assets, including Collateral, among the
Borrowers, (iii) prior to the occurrence of an Event of
Default, sell, transfer, convey, or dispose of Collateral
consisting of Equipment and Inventory to any Affiliate in an
aggregate amount not in excess of $10,000,000 during the term
of this Agreement, and (iv) as long as no Event of Default
exists, (A) make Permitted Investments and (B) grant
non-exclusive licenses of Intellectual Property to Amkor and
its Restricted Subsidiaries, provided that the owner of any
such Intellectual Property which is the subject of any such
license retains ownership of such Intellectual Property and
any such license granted is subject to the Agent's Liens.
10.2.6. Transactions with Affiliates.
(a) Subject to Section 10.2.5(c), Amkor will not, nor
will it permit any of its Restricted Subsidiaries to, make any
payment to, or sell, lease, transfer, or otherwise dispose of
any of its properties or assets to, or purchase any property
or
LOAN AND SECURITY AGREEMENT
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assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance, or
Guarantee with, or for the benefit of, any Affiliate (each, an
"Affiliate Transaction"), unless (i) such Affiliate
Transaction (when viewed together with related Affiliate
Transactions, if any) is on terms that are no less favorable
to Amkor or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by Amkor
or such Restricted Subsidiary with an unrelated Person and
(ii) Amkor delivers to the Agent (A) with respect to any
Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of
$10,000,000, a resolution of the board of directors of Amkor
set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with this covenant and that
such Affiliate Transaction has been approved by a majority of
the disinterested members of the board of directors (of which
there must be at least one) of Amkor and (B) with respect to
any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of
$25,000,000, an opinion as to the fairness to the Lenders of
such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal, or investment banking firm
of national standing; provided that (y) Amkor and its
Restricted Subsidiaries may enter into Affiliate Transactions
pursuant to the Supply Agreement, the Foundry Agreement, the
Asset Purchase Agreement, the Transition Services Agreement,
and the Intellectual Property Rights Licensing Agreement, and
may amend, modify, and supplement such agreements from time to
time, so long as Amkor shall have determined that any such
amendment, modification, or supplement will not have a
material adverse economic effect on Amkor and its
Subsidiaries, taken as a whole, and (z) Amkor and its
Restricted Subsidiaries may only enter into transactions
pursuant to the Supply Agreement, the Foundry Agreement, the
Asset Purchase Agreement, the Transition Services Agreement,
and the Intellectual Property Rights Licensing Agreement, and
amend, modify, and supplement such agreements from time to
time, in circumstances in which clause (y) preceding is not
applicable, if a majority of the disinterested members of the
board of directors (of which there must be at least one) of
Amkor shall have approved such transaction, amendment,
modification, or supplement; provided, further, that in the
case of both clause (y) preceding and clause (z) preceding,
Amkor shall deliver to the Agent within 30 days of such
transaction, amendment, modification, or supplement an
Officers' Certificate (1) describing the transaction,
amendment, modification, or supplement approved, (2) in the
case of transactions, amendments, modifications, and
supplements to which clause (y) preceding is applicable,
setting forth the determination of Amkor required pursuant to
clause (y) preceding, and (3) in the case of transactions,
amendments, modifications, and supplements to which clause (z)
preceding is applicable, attaching a resolution of the board
of directors of Amkor certifying that such Affiliate
Transaction complies with this covenant.
(b) The following items shall not be deemed to be
Affiliate Transactions and, therefore, will not be subject to
the provisions of Section 10.2.6:
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(i) any employment agreement or arrangement
entered into by Amkor or any of its Restricted
Subsidiaries or any employee benefit plan available
to employees of Amkor and its Subsidiaries generally,
in each case in the Ordinary Course of Business of
Amkor or such Restricted Subsidiary;
(ii) subject to Section 10.2.5(c), Affiliate
Transactions between or among Amkor and/or its
Restricted Subsidiaries;
(iii) payment of reasonable directors fees
to Persons who are not otherwise Affiliates of Amkor
and indemnity provided on behalf of officers,
directors, and employees of Amkor or any of its
Restricted Subsidiaries as determined in good faith
by the board of directors of Amkor;
(iv) any Affiliate Transactions pursuant to
which Amkor makes short-term advances or otherwise
makes short-term loans to Anam Semiconductor, Inc.,
which advances or loans are to be repaid by Anam
Semiconductor, Inc. (A) within three months from the
date of such advance or loan and (B) by offsets by
Amkor of amounts payable by Amkor to Anam
Semiconductor, Inc. pursuant to the Supply Agreement,
if a majority of the disinterested members of the
board of directors (of which there must be at least
one) of Amkor shall have approved such transaction,
amendment, modification, or supplement; provided that
the total amount of such advances and loans
outstanding at any one time shall not exceed
$50,000,000; and
(v) any Restricted Payments that are
permitted by Section 10.2.2.
(c) For purposes of this Section 10.2.6, any
transaction or series of related Affiliate Transactions
between Amkor or any Restricted Subsidiary and an Affiliate
that is approved by a majority of the disinterested members of
the board of directors (of which there must be at least one to
utilize this method of approval) of Amkor and evidenced by a
board resolution or for which a fairness opinion has been
issued shall be deemed to be on terms that are no less
favorable to Amkor or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable
transaction by Amkor or such Restricted Subsidiary with an
unrelated Person and thus shall be permitted under this
Section 10.2.6, subject to the limitations in Section
10.2.5(c).
10.2.7. Liens.
(a) Amkor will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create,
incur, assume, or suffer to exist any Lien of any kind
securing Indebtedness on any asset now owned or hereafter
acquired, other than Permitted Liens and Permitted Other
Liens, provided that any
LOAN AND SECURITY AGREEMENT
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such Lien on the Collateral securing the Term Loan shall be
subject to the Intercreditor Agreement.
(b) The foregoing negative pledge shall not apply to
any Margin Stock to the extent such application would violate
or require filings or other actions by any Lender under
Regulation U or any similar law.
10.2.8. Amendment of Subordination Provisions. Amkor will not
amend, modify, or alter the terms of the Second Lien Credit Agreement,
the Senior Subordinated Notes Indenture, or any other Subordinated Debt
in any way that will (a) increase the rate of or change the time for
payment of interest on the Term Loan or any Subordinated Debt, (b)
increase the principal of, advance the final maturity date of or
shorten the Weighted Average Life to Maturity of the Term Loan or any
Subordinated Debt, (c) alter the redemption provisions or the price or
terms at which Amkor is required to offer to purchase any Subordinated
Debt, or (d) amend the subordination provisions of any Subordinated
Debt (including Article 10 of the Senior Subordinated Notes Indenture).
10.2.9. Limitation on Issuances and Sales of Equity Interests
in Wholly Owned Subsidiaries. Amkor (a) shall not, and shall not permit
any Wholly Owned Restricted Subsidiaries of Amkor to, transfer, convey,
sell, lease, or otherwise dispose of any Equity Interests in any Wholly
Owned Restricted Subsidiary of Amkor to any Person (other than Amkor or
a Wholly Owned Restricted Subsidiary of Amkor), unless (a) such
transfer, conveyance, sale, lease, or other disposition is of all the
Equity Interests in such Wholly Owned Restricted Subsidiary or
immediately following such transfer, conveyance, sale, lease, or other
disposition, such Wholly Owned Restricted Subsidiary is a Restricted
Subsidiary and (b) the cash Net Proceeds from such transfer,
conveyance, sale, lease, or other disposition are applied in accordance
with Section 10.2.5 and (b) shall not permit any Wholly Owned
Restricted Subsidiary of Amkor to issue any of its Equity Interests
(other than, if necessary, shares of its capital stock constituting
directors' qualifying shares) to any Person other than to Amkor or a
Wholly Owned Restricted Subsidiary of Amkor unless immediately
following such issuance the Wholly Owned Restricted Subsidiary is a
Restricted Subsidiary.
10.2.10. Limitation on Sale and Leaseback Transactions.
(a) Amkor shall not, and shall not permit any of its
Subsidiaries to, enter into any sale and leaseback
transaction; provided that Amkor or any Restricted Subsidiary
may enter into a sale and leaseback transaction if (i) Amkor
or such Restricted Subsidiary, as applicable, could have
incurred Indebtedness in an amount equal to the Attributable
Debt relating to such sale and leaseback transaction (if the
lease is in the nature of an operating lease, otherwise the
amount of Indebtedness) under the Consolidated Interest
Expense Coverage Ratio test in Section 10.2.4 (ii) the
transfer of assets in that sale and leaseback transaction is
permitted by Section 10.2.5, and (iii) the property subject to
such sale and leaseback transaction is not Collateral.
LOAN AND SECURITY AGREEMENT
Page 89
(b) The restrictions in Section 10.2.10(a) shall not
apply to any sale and leaseback transaction if (i) the
transaction is solely between Amkor and any Restricted
Subsidiary or between Restricted Subsidiaries and such
transaction is permitted under Section 10.2.6 or (ii) the sale
and leaseback transaction is consummated within 180 days after
the purchase of the assets subject to such transaction.
10.2.11. Merger and Consolidations.
(a) Amkor shall not, directly or indirectly,
consolidate or merge with or into another Person or sell,
assign, transfer, convey, or otherwise dispose of all or
substantially all of its properties or assets, in one or more
related transactions, to another Person, unless in connection
with any such merger (but excluding an sale, assignment,
transfer, conveyance, or other disposition) (i) Amkor is the
surviving corporation, (ii) immediately after such merger no
Default or Event of Default exists, and (iii) Amkor shall have
delivered to the Agent an Officers' Certificate stating that
such merger complies with the terms of this Agreement. In
addition, Amkor shall not, directly or indirectly, lease any
of the Collateral, in one or more related transactions, to any
other Person.
(b) Amkor shall not permit, except in connection with
the sale or other disposition in accordance with this
Agreement of all the assets or all the capital stock of any
Subsidiary Guarantor to a Person that is not (either before or
after giving effect to such transactions) a Subsidiary of
Amkor, any Subsidiary Guarantor to consolidate with or merge
with or into (whether or not such Subsidiary Guarantor is the
surviving Person) another Person unless (i) the Person formed
by or surviving any such consolidation or merger (if other
than a Subsidiary Guarantor or Amkor) unconditionally assumes
all the indebtedness, liabilities, and obligations of such
Subsidiary Guarantor, (ii) immediately after giving effect to
such transaction no Default or Event of Default shall have
occurred which is continuing, and (iii) such Subsidiary
Guarantor is not a Borrower.
10.3. Total Liquidity. For so long as any Revolving Commitments or
Obligations are outstanding, the Borrowers shall at all times maintain Total
Liquidity of not less than $25,000,000.
SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT
11.1. Events of Default. Each of the following shall be an "Event of
Default" hereunder, if the same shall occur for any reason whatsoever, whether
voluntary or involuntary, by operation of law or otherwise:
(a) any Borrower fails to pay any Obligations when due
(whether at stated maturity, on demand, upon acceleration, or
otherwise);
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Page 90
(b) any representation, warranty, or other written statement
of any Obligor made in connection with any Loan Documents or
transactions contemplated thereby is incorrect or misleading in any
material respect when given;
(c) any Borrower shall breach or fail to perform any covenant
contained in Sections 7.4, 7.6, 8.1, 8.2.4, 8.2.5, 8.6.2, 10.1.1,
10.1.2, 10.2, or 10.3;
(d) any Obligor breaches or fails to perform any other
covenant contained in any Loan Documents, and such breach or failure is
not cured within 30 days after a Senior Officer has knowledge thereof
or receives notice thereof from the Agent, whichever is sooner;
provided that such notice and opportunity to cure shall not apply if
the breach or failure to perform is not capable of being cured within
such period or is a willful breach by an Obligor;
(e) any (i) Guarantor repudiates, revokes, or attempts to
revoke its Guaranty, (ii) Obligor denies or contests the validity or
enforceability of any Loan Documents or Obligations, or the perfection
or priority of any Lien granted to the Agent, or (iii) Loan Document
ceases to be in full force or effect for any reason (other than a
waiver or release by the Agent and the Lenders);
(f) any event of default occurs under the Second Lien Credit
Agreement, the Senior Notes Indentures, the Senior Subordinated Notes
Indenture, the Convertible Subordinated Notes Indentures, or any
document, instrument, or agreement to which any Borrower is a party
evidencing, securing, or relating to any other Indebtedness (other than
the Obligations) in excess of $10,000,000, if the maturity of or any
payment with respect to such Indebtedness may be accelerated or
demanded due to such breach;
(g) any final judgment or order for the payment of money is
entered against an Obligor in an amount that exceeds, individually or
cumulatively with all unsatisfied judgments or orders against all
Obligors, $1,000,000 (net of any insurance coverage therefor
acknowledged in writing by the insurer), and such judgment or order
remains undischarged for a period of 30 days unless a stay of
enforcement of such judgment or order is in effect, by reason of a
pending appeal or otherwise;
(h) [Reserved];
(i) any Obligor is enjoined, restrained, or in any way
prevented by any Governmental Authority from conducting any material
part of its business, any Obligor suffers the loss, revocation, or
termination of any material license, permit, lease, or agreement
necessary to its business, there is a cessation of any material part of
an Obligor's business for a material period of time, any material
Collateral or Property of an Obligor is taken or impaired through
condemnation, any Obligor agrees to or commences any liquidation,
dissolution, or winding up of its affairs, or any Obligor ceases to be
Solvent;
(j) any (i) Insolvency Proceeding is commenced by any Obligor,
(ii) Insolvency Proceeding is commenced against any Obligor and (A)
such Obligor consents to the institution of the proceeding against it,
(B) the petition commencing the
LOAN AND SECURITY AGREEMENT
Page 91
proceeding is not timely controverted by such Obligor, (C) such
petition is not dismissed within 30 days after its filing, or (D) an
order for relief is entered in the proceeding, (iii) a trustee
(including an interim trustee) is appointed to take possession of any
substantial Property of or to operate any of the business of any
Obligor, or (iv) any Obligor makes an offer of settlement, extension,
or composition to its unsecured creditors generally;
(k) (i) a Reportable Event occurs that the Agent, in its
reasonable discretion, determines constitutes grounds for termination
by the Pension Benefit Guaranty Corporation of any Multiemployer Plan
or appointment of a trustee for any Multiemployer Plan, (ii) any
Multiemployer Plan is terminated or any such trustee is requested or
appointed, or (iii) any Obligor is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
resulting from any withdrawal therefrom;
(l) any Obligor or any of its Senior Officers (excluding
specifically any person who was a Senior Officer of an Obligor prior to
the Closing Date but was not employed by any Obligor at any time on or
after the Closing Date) is convicted for (i) a felony committed in the
conduct of such Obligor's business or (ii) any state or federal law
(including the Controlled Substances Act, the Money Laundering Control
Act of 1986, and the Illegal Exportation of War Materials Act) that
could lead to forfeiture of any material Collateral or could reasonably
be expected to cause a Material Adverse Effect;
(m) any event of default occurs under the Second Lien Credit
Agreement or the Intercreditor Agreement; or
(n) a Change of Control occurs.
11.2. Remedies upon Default. If an Event of Default described in
Section 11.1(j) occurs with respect to any Borrower, then to the extent
permitted by Applicable Law, all Obligations shall become automatically due and
payable and all Revolving Commitments shall terminate, without any action by the
Agent or notice of any kind. In addition, or if any other Event of Default
exists, the Agent may in its discretion (and shall upon written direction of the
Requisite Lenders) do any one or more of the following from time to time:
(a) declare any Obligations immediately due and payable,
whereupon they shall be due and payable without diligence, presentment,
demand, protest, or notice of any kind, all of which are hereby waived
by the Borrowers to the fullest extent permitted by law;
(b) terminate, reduce, or condition any Revolving Commitment,
or make any adjustment to the Borrowing Base;
(c) require the Obligors to Cash Collateralize the LC
Obligations, the Bank Product Debt, and other the Obligations that are
contingent or not yet due and payable, and, if the Obligors fail
promptly to deposit such Cash Collateral, the Lenders may (and shall
upon the direction of the Requisite Lenders) advance the required Cash
Collateral as
LOAN AND SECURITY AGREEMENT
Page 92
Revolving Loans (whether or not an Overadvance exists or is created
thereby, or the conditions in Section 6 are satisfied); and
(d) exercise any other rights or remedies afforded under any
agreement, by law, at equity, or otherwise, including the rights and
remedies of a secured party under the UCC. Such rights and remedies
include the rights to (i) take possession of any Collateral, (ii)
require the Borrowers to assemble the Collateral, at the Borrowers'
expense, and make it available to the Agent at a place designated by
the Agent, (iii) enter any premises where any Collateral is located and
store Collateral on such premises until sold (and if the premises are
owned or leased by a Borrower, the Borrowers agree not to charge for
such storage), and (iv) sell or otherwise dispose of any Collateral in
its then condition, or after any further manufacturing or processing
thereof, at public or private sale, with such notice as may be required
by Applicable Law, in lots or in bulk, at such locations, all as the
Agent, in its discretion, deems advisable. Each Borrower agrees that
ten days notice of any proposed sale or other disposition of Collateral
by the Agent shall be reasonable. The Agent shall have the right to
conduct such sales on any Obligor's premises, without charge, and such
sales may be adjourned from time to time in accordance with Applicable
Law. The Agent shall have the right to sell, lease, or otherwise
dispose of any Collateral for cash, credit, or any combination thereof,
and the Agent may purchase any Collateral at public or, if permitted by
law, private sale and, in lieu of actual payment of the purchase price,
may set off the amount of such price against the Obligations.
11.3. License. The Agent is hereby granted an irrevocable,
non-exclusive license or other right to use, license, or sub-license (without
payment of royalty or other compensation to any Person) any or all Intellectual
Property of the Borrowers, computer hardware and software, trade secrets,
brochures, customer lists, promotional and advertising materials, labels,
packaging materials, and other Property, in advertising for sale, marketing,
selling, collecting, completing manufacture of, or otherwise exercising any
rights or remedies with respect to, any Collateral. Each Borrower's rights and
interests under Intellectual Property shall inure to the Agent's benefit.
11.4. Setoff. The Agent, the Lenders, and their Affiliates are each
authorized by the Borrowers at any time during an Event of Default, without
notice to the Borrowers or any other Person, to set off and to appropriate and
apply any deposits (general or special), funds, claims, obligations,
liabilities, or other Indebtedness at any time held or owing by the Agent, any
Lender, or any such Affiliate to or for the account of any Obligor against any
Obligations, whether or not demand for payment of such Obligation has been made,
any Obligations have been declared due and payable, are then due, or are
contingent or unmatured, or the Collateral or any guaranty or other security for
the Obligations is adequate.
11.5. Remedies Cumulative; No Waiver.
11.5.1. Cumulative Rights. All covenants, conditions,
provisions, warranties, guaranties, indemnities, and other undertakings
of the Borrowers contained in the Loan Documents are cumulative and not
in derogation or substitution of each other. In particular, the rights
and remedies of the Agent and the Lenders are cumulative, may be
LOAN AND SECURITY AGREEMENT
Page 93
exercised at any time and from time to time, concurrently or in any
order, and shall not be exclusive of any other rights or remedies that
the Agent and the Lenders may have, whether under any agreement, by
law, at equity, or otherwise.
11.5.2. Waivers. The failure or delay of the Agent or any
Lender to require strict performance by the Borrowers with any terms of
the Loan Documents, or to exercise any rights or remedies with respect
to Collateral or otherwise, shall not operate as a waiver thereof nor
as establishment of a course of dealing. All rights and remedies shall
continue in full force and effect until Full Payment of all
Obligations. No modification of any terms of any Loan Documents
(including any waiver thereof) shall be effective, unless such
modification is specifically provided in a writing directed to the
Borrowers and executed by the Agent or the requisite Lenders, and such
modification shall be applicable only to the matter specified. No
waiver of any Default or Event of Default shall constitute a waiver of
any other Default or Event of Default that may exist at such time,
unless expressly stated. If the Agent or any Lender accepts performance
by any Obligor under any Loan Documents in a manner other than that
specified therein, or during any Default or Event of Default, or if the
Agent or any Lender shall delay or exercise any right or remedy under
any Loan Documents, such acceptance, delay, or exercise shall not
operate to waive any Default or Event of Default nor to preclude
exercise of any other right or remedy. It is expressly acknowledged by
the Borrowers that any failure to satisfy a financial covenant on a
measurement date shall not be cured or remedied by satisfaction of such
covenant on a subsequent date.
SECTION 12. THE AGENT
12.1. Appointment, Authority and Duties of the Agent.
12.1.1. Appointment and Authority. Each Lender appoints and
designates Bank of America as the Agent hereunder. The Agent may, and
each Lender authorizes the Agent to, enter into all Loan Documents to
which the Agent is intended to be a party and accept all Security
Documents, for the Agent's benefit and the Pro Rata benefit of the
Lenders. Each Lender agrees that any action taken by the Agent or the
Requisite Lenders in accordance with the provisions of the Loan
Documents, and the exercise by the Agent or the Requisite Lenders of
any rights or remedies set forth therein, together with all other
powers reasonably incidental thereto, shall be authorized and binding
upon all Lenders. Without limiting the generality of the foregoing, the
Agent shall have the sole and exclusive authority to (a) act as the
disbursing and collecting agent for the Lenders with respect to all
payments and collections arising in connection with the Loan Documents,
(b) execute and deliver as the Agent each Loan Document, including any
intercreditor or subordination agreement, and accept delivery of each
Loan Document from any Obligor or other Person, (c) act as collateral
agent for the Secured Parties for purposes of perfecting and
administering Liens under the Loan Documents, and for all other
purposes stated therein, (d) manage, supervise, or otherwise deal with
the Collateral, and (e) exercise all rights and remedies given to the
Agent with respect to any Collateral under the Loan Documents,
Applicable Law, or otherwise. The duties of the Agent shall be
ministerial and administrative in nature, and the Agent shall not have
a fiduciary relationship with any Lender, Secured Party, Participant,
or other Person, by reason of
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any Loan Document or any transaction relating thereto. The Agent alone
shall be authorized to determine whether any Accounts constitute
Eligible Accounts or Eligible Foreign Accounts, or whether to impose or
release any reserve, which determinations and judgments, if exercised
in good faith, shall exonerate the Agent from liability to any Lender
or other Person for any error in judgment.
12.1.2. Duties. The Agent shall not have any duties except
those expressly set forth in the Loan Documents, nor be required to
initiate or conduct any Enforcement Action except to the extent
directed to do so by the Requisite Lenders while an Event of Default
exists. The conferral upon the Agent of any right shall not imply a
duty on the Agent's part to exercise such right, unless instructed to
do so by the Requisite Lenders in accordance with this Agreement.
12.1.3. Agent Professionals. The Agent may perform its duties
through agents and employees. The Agent may consult with and employ
Agent Professionals, and shall be entitled to act upon, and shall be
fully protected in any action taken in good faith reliance upon, any
advice given by an Agent Professional. The Agent shall not be
responsible for the negligence or misconduct of any agents, employees,
or Agent Professionals selected by it with reasonable care.
12.1.4. Instructions of the Requisite Lenders. The rights and
remedies conferred upon the Agent under the Loan Documents may be
exercised without the necessity of joinder of any other party, unless
required by Applicable Law. The Agent may request instructions from the
Requisite Lenders with respect to any act (including the failure to
act) in connection with any Loan Documents, and may seek assurances to
its satisfaction from the Lenders of their indemnification obligations
under Section 12.6 against all Claims that could be incurred by the
Agent in connection with any act. The Agent shall be entitled to
refrain from any act until it has received such instructions or
assurances, and the Agent shall not incur liability to any Person by
reason of so refraining. Instructions of the Requisite Lenders shall be
binding upon all Lenders, and no Lender shall have any right of action
whatsoever against the Agent as a result of the Agent acting or
refraining from acting in accordance with the instructions of the
Requisite Lenders. Notwithstanding the foregoing, instructions by and
consent of all Lenders shall be required in the circumstances described
in Section 14.1.1, and in no event shall the Requisite Lenders, without
the prior written consent of each Lender, direct the Agent to
accelerate and demand payment of Revolving Loans held by one Lender
without accelerating and demanding payment of all other Revolving
Loans, nor to terminate the Revolving Commitments of one Lender without
terminating the Revolving Commitments of all Lenders. In no event shall
the Agent be required to take any action that, in its opinion, is
contrary to Applicable Law or any Loan Documents or could subject any
Agent Indemnitee to personal liability.
12.2. Agreements Regarding Collateral and Field Examination Reports.
12.2.1. Lien Releases; Care of Collateral. The Lenders
authorize the Agent to release or subordinate any Lien with respect to
any Collateral (a) upon Full Payment of the Obligations, (b) that is
the subject of an Asset Sale, transfer, sale, lease, or other
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Page 95
disposition permitted by this Agreement which the Borrowers certify in
writing to the Agent is permitted pursuant to the terms of this
Agreement or is subject to a Lien which the Borrowers certify is a
Permitted Lien entitled to priority over the Agent's Liens pursuant to
the terms of this Agreement (and the Agent may rely conclusively on any
such certificate without further inquiry), (c) that does not constitute
a material part of the Collateral, or (d) with the written consent of
the Lenders. The Agent shall have no obligation whatsoever to any
Lenders to assure that any Collateral exists or is owned by a Borrower,
or is cared for, protected, insured, or encumbered, nor to assure that
the Agent's Liens have been properly created, perfected, or enforced,
or are entitled to any particular priority, nor to exercise any duty of
care with respect to any Collateral. Each of the Lenders hereby directs
the Agent to execute and deliver or file such termination statements
and partial release statements and do such things as are necessary to
release or subordinate any Liens to be released or subordinated
pursuant to this Section 12.2.1 upon the effectiveness of such release.
12.2.2. Possession of Collateral. The Agent and the Lenders
appoint each other Lender as agent for the purpose of perfecting Liens
(for the benefit of the Secured Parties) in any Collateral that, under
the UCC or other Applicable Law, can be perfected by possession. If any
Lender obtains possession of any such Collateral, it shall notify the
Agent thereof and, promptly upon the Agent's request, deliver such
Collateral to the Agent or otherwise deal with such Collateral in
accordance with the Agent's instructions.
12.2.3. Reports. The Agent shall promptly, upon receipt
thereof, forward to each Lender copies of the results of any field
audit or other examination prepared by or on behalf of the Agent with
respect to any Obligor or Collateral ("Report"). Each Lender agrees (a)
that neither Bank of America nor the Agent makes any representation or
warranty as to the accuracy or completeness of any Report, and shall
not be liable for any information contained in or omitted from any
Report, (b) that the Reports are not intended to be comprehensive
audits or examinations, and that the Agent or any other Person
performing any audit or examination will inspect only specific
information regarding Obligations or the Collateral and will rely
significantly upon the Borrowers' books and records as well as upon
representations of the Borrowers' officers and employees, and (c) to
keep all Reports confidential and strictly for such Lender's internal
use, and not to distribute any Report (or the contents thereof) to any
Person (except to such Lender's Participants, attorneys, accountants,
and other Persons with whom such Lender has a confidential
relationship) or use any Report in any manner other than administration
of the Revolving Loans and other Obligations. Each Lender agrees to
indemnify and hold harmless the Agent and any other Person preparing a
Report from any action such Lender may take as a result of or any
conclusion it may draw from any Report, as well as any Claims arising
in connection with any third parties that obtain all or any part of a
Report through such Lender.
12.3. Reliance By the Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any certification, notice, or other
communication (including those by telephone, telex, telegram, telecopy, or
e-mail) believed by it to be genuine and correct and to have been signed, sent,
or made by the proper Person, and upon the advice and statements of Agent
Professionals.
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12.4. Action Upon Default. The Agent shall not be deemed to have
knowledge of any Default or Event of Default unless it has received written
notice from a Lender or a Borrower specifying the occurrence and nature thereof.
If the Agent receives such a notice or otherwise acquires actual knowledge of
any Default or Event of Default, the Agent shall promptly notify the Lenders in
writing. If any Lender acquires knowledge of a Default or Event of Default, it
shall promptly notify the Agent and the other Lenders thereof in writing. Each
Lender agrees that, except as otherwise provided in any Loan Documents or with
the written consent of the Agent and the Requisite Lenders, such Lender will not
take any Enforcement Action, accelerate its Obligations, or exercise any right
that it might otherwise have under Applicable Law to credit bid at foreclosure
sales, UCC sales, or other similar dispositions of Collateral. Notwithstanding
the foregoing, a Lender may take action to preserve or enforce its rights
against an Obligor where a deadline or limitation period is applicable that
would, absent such action, bar enforcement of Obligations held by such Lender,
including the filing of proofs of claim in an Insolvency Proceeding.
12.5. Ratable Sharing. If any Lender shall obtain any payment or
reduction of any Obligation (whether through set-off or otherwise) in excess of
its Pro Rata share of payments or reductions of Obligations obtained by all
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the affected Obligations as shall be necessary to cause the
purchasing Lender to share the excess payment or reduction, net of costs
incurred in connection therewith, on a Pro Rata basis, provided that if any of
such payment or reduction is thereafter recovered from the purchasing Lender or
if any additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery or additional costs, but
without interest.
12.6. Indemnification of the Agent Indemnitees.
12.6.1. Indemnification. EACH LENDER SHALL INDEMNIFY AND HOLD
HARMLESS THE AGENT INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY THE
OBLIGORS (BUT WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF THE
OBLIGORS UNDER ANY LOAN DOCUMENTS), ON A PRO RATA BASIS, AGAINST ALL
CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY AGENT
INDEMNITEE. If the Agent is sued by any receiver, trustee in
bankruptcy, debtor-in-possession, or other Person for any alleged
preference from an Obligor or fraudulent transfer, then any monies paid
by the Agent in settlement or satisfaction of such proceeding, together
with all interest, costs and expenses (including attorneys' fees)
incurred in the defense of same, shall be promptly reimbursed to the
Agent by the Lenders to the extent of each Lender's Pro Rata share.
12.6.2. Proceedings. Without limiting the generality of the
foregoing, if at any time (whether prior to or after the Termination
Date) any proceeding is brought against any Agent Indemnitees by an
Obligor, or any Person claiming through an Obligor, to recover damages
for any act taken or omitted by the Agent in connection with any
Obligations, Collateral, Loan Documents, or matters relating thereto,
or otherwise to obtain any other relief of any kind on account of any
transaction relating to any Loan Documents, each Lender agrees to
indemnify and hold harmless the Agent Indemnitees with respect thereto
and to pay to the Agent Indemnitees such Lender's Pro Rata share of
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any amount that any Agent Indemnitee is required to pay under any
judgment or other order entered in such proceeding or by reason of any
settlement, including all interest, costs, and expenses (including
attorneys' fees) incurred in defending same. In the Agent's discretion,
the Agent may reserve for any such proceeding, and may satisfy any
judgment, order, or settlement, from proceeds of Collateral prior to
making any distributions of Collateral proceeds to the Lenders.
12.7. Limitation on Responsibilities of the Agent. The Agent shall not
be liable to the Lenders for any action taken or omitted to be taken under the
Loan Documents, except for losses directly and solely caused by the Agent's
gross negligence or willful misconduct. The Agent does not assume any
responsibility for any failure or delay in performance or any breach by any
Obligor or Lender of any obligations under the Loan Documents. The Agent does
not make to the Lenders any express or implied warranty, representation, or
guarantee with respect to any Obligations, Collateral, Loan Documents, or
Obligor. No Agent Indemnitee shall be responsible to the Lenders for (a) any
recitals, statements, information, representations, or warranties contained in
any Loan Documents, (b) the execution, validity, genuineness, effectiveness, or
enforceability of any Loan Documents, (c) the genuineness, enforceability,
collectibility, value, sufficiency, location, or existence of any Collateral, or
the validity, extent, perfection, or priority of any Lien therein, (d) the
validity, enforceability, or collectibility of any Obligations, (e) or the
assets, liabilities, financial condition, results of operations, business,
creditworthiness, or legal status of any Obligor or Account Debtor. No Agent
Indemnitee shall have any obligation to any Lender to ascertain or inquire into
the existence of any Default or Event of Default, the observance or performance
by any Obligor of any terms of the Loan Documents, or the satisfaction of any
conditions precedent contained in any Loan Documents.
12.8. Successor Agent and Co-Agents.
12.8.1. Resignation; Successor Agent. Subject to the
appointment and acceptance of a successor administrative agent as
provided below, the Agent may resign at any time by giving at least 30
days written notice thereof to the Lenders and the Borrowers. Upon
receipt of such notice, the Requisite Lenders shall have the right to
appoint a successor administrative agent which shall be (a) a Lender or
an Affiliate of a Lender or (b) a commercial bank that is organized
under the laws of the United States or any state or district thereof,
has a combined capital surplus of at least $200,000,000, and, provided
no Default or Event of Default then exists, is reasonably acceptable to
the Borrowers. If no successor administrative agent is appointed prior
to the effective date of the resignation of the Agent, then the Agent
may appoint a successor administrative agent from among Lenders. Upon
acceptance by a successor administrative agent of an appointment to
serve as the administrative agent hereunder, such successor
administrative agent shall thereupon succeed to and become vested with
all the powers and duties of the retiring Agent without further act,
and the retiring Agent shall be discharged from its duties and
obligations hereunder but shall continue to enjoy the benefits of the
indemnification set forth in Section 12.6 and Section 14.2.
Notwithstanding any Agent's resignation, the provisions of this Section
12 shall continue in effect for its benefit with respect to any actions
taken or omitted to be taken by it while Agent. Any successor by merger
or acquisition of the stock or assets of Bank of America shall continue
to be the Agent
LOAN AND SECURITY AGREEMENT
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hereunder without further act on the part of the parties hereto, unless
such successor resigns as provided above.
12.8.2. Separate Collateral Agent. It is the intent of the
parties that there shall be no violation of any Applicable Law denying
or restricting the right of financial institutions to transact business
in any jurisdiction. If the Agent believes that it may be limited in
the exercise of any rights or remedies under the Loan Documents due to
any Applicable Law, the Agent may appoint an additional Person who is
not so limited, as a separate collateral agent or co-collateral agent.
If the Agent so appoints a collateral agent or co-collateral agent,
each right and remedy intended to be available to the Agent under the
Loan Documents shall also be vested in such separate agent. Every
covenant and obligation necessary to the exercise thereof by such
separate agent shall run to and be enforceable by it as well as the
Agent. The Lenders shall execute and deliver such documents as the
Agent deems appropriate to vest any rights or remedies in such separate
agent. If any collateral agent or co-collateral agent shall die or
dissolve, become incapable of acting, resign, or be removed, then all
the rights and remedies of such separate agent, to the extent permitted
by Applicable Law, shall vest in and be exercised by the Agent until
appointment of a new separate agent.
12.9. Due Diligence and Non-Reliance. Each Lender acknowledges and
agrees that it has, independently and without reliance upon the Agent or any
other Lenders, and based upon such documents, information, and analyses as it
has deemed appropriate, made its own credit analysis of each Obligor and its own
decision to enter into this Agreement and to fund Revolving Loans and
participate in LC Obligations hereunder. Each Lender has made such inquiries
concerning the Loan Documents, the Collateral, and each Obligor as such Lender
feels necessary. Each Lender further acknowledges and agrees that the other
Lenders and the Agent have made no representations or warranties concerning any
Obligor, any Collateral, or the legality, validity, sufficiency, or
enforceability of any Loan Documents or Obligations. Each Lender will,
independently and without reliance upon the other Lenders or the Agent, and
based upon such financial statements, documents, and information as such Lender
deems appropriate at the time, continue to make and rely upon its own credit
decisions in making Revolving Loans and participating in LC Obligations, and in
taking or refraining from any action under any Loan Documents. Except for
notices, reports, and other information expressly requested by a Lender, the
Agent shall have no duty or responsibility to provide any Lender with any
notices, reports, or certificates furnished to the Agent by any Obligor or any
credit or other information concerning the affairs, financial condition,
business, or Properties of any Obligor (or any of its Affiliates) which may come
into possession of the Agent or any of the Agent's Affiliates.
12.10. Replacement of Certain Lenders. If any Lender (a) fails to fund
its Pro Rata share of any Revolving Loan or LC Obligation hereunder, and such
failure is not cured within two Business Days, (b) defaults in performing any of
its obligations under the Loan Documents, or (c) fails to give its consent to
any amendment, waiver, or action for which consent of all Lenders was required
and the Requisite Lenders consented, then, in addition to any other rights and
remedies that any Person may have, the Agent may, by notice to such Lender
within 120 days, require such Lender to assign all of its rights and obligations
under the Loan Documents to Eligible Assignee(s) specified by the Agent,
pursuant to appropriate Assignment and Acceptance(s) and within 20 days after
the Agent's notice. The Agent is irrevocably appointed
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as attorney-in-fact to execute any such Assignment and Acceptance if the Lender
fails to execute same. Such Lender shall be entitled to receive, in cash,
concurrently with such assignment, all amounts owed to it under the Loan
Documents, including all principal, interest, and fees through the date of
assignment (but excluding any prepayment charge).
12.11. Remittance of Payments and Collections.
12.11.1. Remittances Generally. All payments by any Lender to
the Agent shall be made by the time and on the day set forth in this
Agreement, in immediately available funds. If no time for payment is
specified or if payment is due on demand by the Agent and request for
payment is made by the Agent by 11:00 a.m. on a Business Day, payment
shall be made by the Lender not later than 2:00 p.m. on such day, and
if request is made after 11:00 a.m., then payment shall be made by
11:00 a.m. on the next Business Day. Payment by the Agent to any Lender
shall be made by wire transfer, in the type of funds received by the
Agent. Any such payment shall be subject to the Agent's right of offset
for any amounts due from such Lender under the Loan Documents.
12.11.2. Failure to Pay. If any Lender fails to pay any amount
when due by it to the Agent pursuant to the terms hereof, such amount
shall bear interest from the due date until paid at the Federal Funds
Rate for the first two Business Days and thereafter at the rate
applicable to Base Rate Revolving Loans. In no event shall the
Borrowers be entitled to receive credit for any interest paid by a
Lender to the Agent.
12.11.3. Recovery of Payments. If the Agent pays any amount to
a Lender in the expectation that a related payment will be received by
the Agent from an Obligor and such related payment is not received,
then the Agent may recover such amount from each Lender that received
it. If the Agent determines at any time that an amount received under
any Loan Document must be returned to an Obligor or paid to any other
Person pursuant to Applicable Law or otherwise, then, notwithstanding
any other term of any Loan Document, the Agent shall not be required to
distribute such amount to any Lender. If any amounts received and
applied by the Agent to any Obligations are later required to be
returned by the Agent pursuant to Applicable Law, each Lender shall pay
to the Agent, on demand, such Lender's Pro Rata share of the amounts
required to be returned.
12.12. The Agent in its Individual Capacity. As a Lender, Bank of
America shall have the same rights and remedies under the other Loan Documents
as any other Lender, and the terms "Lenders," "Requisite Lenders" or any similar
term shall include Bank of America in its capacity as a Lender. Each of Bank of
America and its Affiliates may accept deposits from, maintain deposits or credit
balances for, invest in, lend money to, provide Bank Products to, act as trustee
under indentures of, serve as financial or other advisor to, and generally
engage in any kind of business with, the Obligors and their Affiliates, as if
Bank of America were any other bank, without any duty to account therefor
(including any fees or other consideration received in connection therewith) to
the other Lenders. In their individual capacity, Bank of America and its
Affiliates may receive information regarding the Obligors, their Affiliates, and
their Account Debtors (including information subject to confidentiality
obligations), and each Lender agrees
LOAN AND SECURITY AGREEMENT
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that Bank of America and its Affiliates shall be under no obligation to provide
such information to the Lenders, if acquired in such individual capacity and not
as the Agent hereunder.
12.13. Documentation Agent. The Documentation Agent shall not have any
right, power, responsibility, or duty under any Loan Documents other than those
applicable to all Lenders, and shall in no event be deemed to have any fiduciary
relationship with any other Lender.
12.14. No Third Party Beneficiaries. This Section 12 is an agreement
solely among the Lenders and the Agent, and does not confer any rights or
benefits upon the Borrowers or any other Person. As between the Borrowers and
the Agent, any action that the Agent may take under any Loan Documents shall be
conclusively presumed to have been authorized and directed by the Lenders as
herein provided.
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
13.1. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Borrowers, the Agent, and the Lenders and their
respective successors and assigns, except that (a) no Borrower shall have the
right to assign its rights or delegate its obligations under any Loan Documents
and (b) any assignment by a Lender must be made in compliance with Section 13.3.
The Agent may treat the Person which made any Revolving Loan as the owner
thereof for all purposes until such Person makes an assignment in accordance
with Section 13.3. Any authorization or consent of a Lender shall be conclusive
and binding on any subsequent transferee or assignee of such Lender.
13.2. Participations.
13.2.1. Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with Applicable Law,
at any time sell to a financial institution ("Participant") a
participating interest in the rights and obligations of such Lender
under any Loan Documents. Despite any sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for performance of such
obligations, such Lender shall remain the holder of its Revolving Loans
and Revolving Commitments for all purposes, all amounts payable by the
Borrowers shall be determined as if such Lender had not sold such
participating interests, and the Borrowers and the Agent shall continue
to deal solely and directly with such Lender in connection with the
Loan Documents. Each Lender shall be solely responsible for notifying
its Participants of any matters under the Loan Documents, and the Agent
and the other Lenders shall not have any obligation or liability to any
such Participant. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 5.9
unless the Borrowers agree otherwise in writing.
13.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
waiver, or other modification of any Loan Documents other than that
which forgives principal, interest, or fees, reduces the stated
interest rate or fees payable with respect to any Revolving Loan or
Revolving
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Commitment in which such Participant has an interest, postpones the
Termination Date, or any date fixed for any regularly scheduled payment
of principal, interest, or fees on such Revolving Loan or Revolving
Commitment, or releases any Borrower, Guarantor, or substantial portion
of the Collateral.
13.2.3. Benefit of Set-Off. The Borrowers agree that each
Participant shall have a right of set-off in respect of its
participating interest to the same extent as if such interest were
owing directly to a Lender, and each Lender shall also retain the right
of set-off with respect to any participating interests sold by it. By
exercising any right of set-off, a Participant agrees to share with the
Lenders all amounts received through its set-off, in accordance with
Section 12.5 as if such Participant were a Lender.
13.3. Assignments.
13.3.1. Permitted Assignments. A Lender may assign to any
Eligible Assignee any of its rights and obligations under the Loan
Documents, as long as (a) each assignment is of a constant, and not a
varying, percentage of the transferor Lender's rights and obligations
under the Loan Documents and, in the case of a partial assignment, is
in a minimum principal amount of $15,000,000 (unless otherwise agreed
by the Agent in its discretion) and integral multiples of $5,000,000 in
excess of that amount, (b) except in the case of an assignment in whole
of a Lender's rights and obligations, the aggregate amount of the
Revolving Commitments retained by the transferor Lender be at least
$15,000,000 (unless otherwise agreed by the Agent in its discretion),
and (c) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording, an Assignment and
Acceptance. Nothing herein shall limit the right of a Lender to pledge
or assign any rights under the Loan Documents to (i) any Federal
Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors and any Operating
Circular issued by such Federal Reserve Bank or (ii) counterparties to
swap agreements relating to any Revolving Loans; provided that any
payment by the Borrowers to the assigning Lender in respect of any
Obligations assigned as described in this sentence shall satisfy the
Borrowers' obligations hereunder to the extent of such payment, and no
such assignment shall release the assigning Lender from its obligations
hereunder.
13.3.2. Effect; Effective Date. Upon delivery to the Agent of
a notice of assignment in the form of Exhibit F and a processing fee of
$5,000, such assignment shall become effective as specified in the
notice, if it complies with this Section 13.3. From the effective date
of such assignment, the Eligible Assignee shall for all purposes be a
Lender under the Loan Documents, and shall have all rights and
obligations of a Lender thereunder. Upon consummation of an assignment,
the transferor Lender, the Agent, and the Borrowers shall make
appropriate arrangements for issuance of replacement and/or new Notes,
as appropriate.
13.4. Tax Treatment. If any interest in a Loan Document is transferred
to a Transferee that is organized under the laws of any jurisdiction other than
the United States or any state or district thereof, the transferor Lender shall
cause such Transferee, concurrently with the effectiveness of such transfer, to
comply with the provisions of Section 5.10.
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13.5. Representation of Lenders. Each Lender represents and warrants to
each Borrower, the Agent, and other Lenders that none of the consideration used
by it to fund its Revolving Loans or to participate in any other transactions
under this Agreement constitutes for any purpose of ERISA or Section 4975 of the
Internal Revenue Code assets of any "plan" as defined in Section 3(3) of ERISA
or Section 4975 of the Internal Revenue Code and the interests of such Lender in
and under the Loan Documents shall not constitute plan assets under ERISA.
SECTION 14. MISCELLANEOUS
14.1. Consents, Amendments and Waivers.
14.1.1. Amendment. No modification of any Loan Document,
including any extension or amendment of a Loan Document or any waiver
of a Default or Event of Default, shall be effective without the prior
written agreement of the Agent, with the consent of the Requisite
Lenders, and the Borrowers; provided that:
(a) without the prior written consent of the Agent,
no modification shall be effective with respect to any
provision in a Loan Document that relates to any rights,
duties, or discretion of the Agent;
(b) without the prior written consent of the Issuing
Bank, no modification shall be effective with respect to any
LC Obligations or Section 2.3;
(c) without the prior written consent of each
affected Lender, no modification shall be effective that would
(i) increase any Revolving Commitment of such Lender or (ii)
reduce the amount of, or waive or delay payment of, any
principal, interest, or fees payable to such Lender; and
(d) without the prior written consent of all Lenders
(except a defaulting Lender as provided in Section 4.2), no
modification shall be effective that would (i) extend the
Termination Date, (ii) alter Section 2.1.5, Section 2.1.6,
Section 5.6, Section 7.1 (except to add Collateral), Section
10.3, or Section 14.1.1; (iii) amend the definitions of
Borrowing Base (and the defined terms used in such
definition), Pro Rata, Requisite Lenders, or Total Liquidity,
(iv) increase any advance rate or decrease the Minimum
Availability Requirement, (v) release Collateral with a book
value greater than $10,000,000 during any calendar year,
except as currently contemplated by the Loan Documents, or
(vi) release any Obligor from liability for any Obligations,
if such Obligor is Solvent at the time of the release.
14.1.2. Limitations. The agreement of the Borrowers shall not
be necessary to the effectiveness of any modification of a Loan
Document that deals solely with the rights and duties of the Lenders,
the Agent, and/or the Issuing Bank as among themselves. Only the
consent of the parties to any agreement relating to a Bank Product
shall be required for any modification of such agreement, and no
Affiliate of the provider of any Bank Products that is party to a Bank
Product agreement shall have any other right to consent to or
participate in any manner in modification of any other Loan Document.
The making of any Revolving Loans during the existence of a Default or
Event of Default shall not be deemed to constitute a waiver of such
Default or Event of
LOAN AND SECURITY AGREEMENT
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Default, nor to establish a course of dealing. Any waiver or consent
granted by the Lenders hereunder shall be effective only if in writing,
and then only in the specific instance and for the specific purpose for
which it is given.
14.1.3. Payment for Consents. No Borrower will, directly or
indirectly, pay any remuneration or other thing of value, whether by
way of additional interest, fee, or otherwise, to any Lender (in its
capacity as a Lender hereunder) as consideration for agreement by such
Lender with any modification of any Loan Documents, unless such
remuneration or value is concurrently paid, on the same terms, on a Pro
Rata basis to all Lenders providing their consent.
14.2. General Indemnity. EACH BORROWER SHALL INDEMNIFY AND HOLD
HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED
AGAINST ANY INDEMNITEES, INCLUDING CLAIMS ARISING FROM THE NEGLIGENCE OF AN
INDEMNITEE. If any Taxes (other than Excluded Taxes) shall be payable by any
party due to the execution, delivery, issuance, or recording of any Loan
Documents, or the creation or repayment of any Obligations, the Borrowers shall
pay (and shall promptly reimburse the Agent and the Lenders for their payment
of) all such Taxes, including any interest and penalties thereon, and will
indemnify and hold harmless the Indemnitees against all liability in connection
therewith.
14.3. Limitations of Indemnities. IN NO EVENT SHALL ANY PARTY TO A LOAN
DOCUMENT HAVE ANY OBLIGATION THEREUNDER TO INDEMNIFY AN INDEMNITEE WITH RESPECT
TO A CLAIM THAT IS DETERMINED IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF
COMPETENT JURISDICTION TO RESULT FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF SUCH INDEMNITEE. The obligation of each Obligor and Lender with respect to
each indemnity given by it in any Loan Documents shall survive Full Payment of
the Obligations.
14.4. Notices and Communications.
14.4.1. Notice Address. Subject to Section 4.1.4, all notices,
requests, and other communications by or to a party hereto shall be in
writing and shall be given to any Borrower, at the Borrower Agent's
address shown on the signature pages hereof, and to any other Person at
its address shown on the signature pages hereof (or, in the case of a
Person who becomes a Lender after the Closing Date, at the address
shown on its Assignment and Acceptance), or at such other address as a
party may hereafter specify by notice in accordance with this Section
14.4. Each such notice, request, or other communication shall be
effective only (a) if given by facsimile transmission, when transmitted
to the applicable facsimile number, if confirmation of receipt is
received and if such facsimile transmission is followed by a copy of
such notice by mail or personal delivery, (b) if given by mail, three
Business Days after deposit in the United States mail, with first-class
postage pre-paid, addressed to the applicable address, or (c) if given
by personal delivery, when duly delivered to the notice address with
receipt acknowledged. Notwithstanding the foregoing, no notice to the
Agent pursuant to Section 2.1.4, Section 2.3, Section 3.1.2, Section
4.1.1, or Section 5.3.3 shall be effective until actually
LOAN AND SECURITY AGREEMENT
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received by the individual to whose attention at the Agent such notice
is required to be sent. Any written notice, request, or other
communication that is not sent in conformity with the foregoing
provisions shall nevertheless be effective on the date actually
received by the noticed party. Any notice received by the Borrower
Agent shall be deemed received by all Borrowers.
14.4.2. Electronic Communications; Voice Mail. Except for
electronic submission of Notices of Borrowing and Notices of
Conversion/Continuation, electronic mail and intranet websites may be
used only for routine communications, such as transmission of financial
statements, Borrowing Base Certificates, and other information required
by Section 10.1.2, administrative matters, and distribution of Loan
Documents for execution. The Agent and the Lenders make no assurances
as to the privacy and security of electronic communications. Electronic
and voice mail may not be used as effective notice under the Loan
Documents.
14.4.3. Non-Conforming Communications. The Agent and the
Lenders may rely upon any notices (including telephonic communications)
purportedly given by or on behalf of any Borrower even if such notices
were not made in a manner specified herein, were incomplete or were not
confirmed, or if the terms thereof, as understood by the recipient,
varied from a later confirmation. Each Borrower shall indemnify and
hold harmless each Indemnitee from any liabilities, losses, costs, and
expenses arising from any telephonic communication purportedly given by
or on behalf of a Borrower.
14.5. Performance of the Borrowers' Obligations. The Agent may, in its
discretion at any time and from time to time, at the Borrowers' expense, pay any
amount or do any act required of a Borrower under any Loan Documents or
otherwise lawfully requested by the Agent to (a) enforce any Loan Documents or
collect any Obligations, (b) protect, insure, maintain, or realize upon any
Collateral, or (c) defend or maintain the validity or priority of the Agent's
Liens in any Collateral, including any payment of a judgment, insurance premium,
warehouse charge, finishing or processing charge, or landlord claim, or any
discharge of a Lien. All payments, costs, and expenses (including Extraordinary
Expenses) of the Agent under this Section shall be reimbursed to the Agent by
the Borrowers, on demand, with interest from the date incurred to the date of
payment thereof at the Default Rate applicable to Base Rate Revolving Loans. Any
payment made or action taken by the Agent under this Section shall be without
prejudice to any right to assert an Event of Default or to exercise any other
rights or remedies under the Loan Documents.
14.6. Credit Inquiries. Each Borrower hereby authorizes the Agent and
the Lenders (but they shall have no obligation) to respond to usual and
customary credit inquiries from third parties concerning any Borrower or
Subsidiary.
14.7. Severability. Wherever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be valid under Applicable
Law. If any provision is found to be invalid under Applicable Law, it shall be
ineffective only to the extent of such invalidity and the remaining provisions
of the Loan Documents shall remain in full force and effect.
LOAN AND SECURITY AGREEMENT
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14.8. Cumulative Effect; Conflict of Terms. The provisions of the Loan
Documents are cumulative. The parties acknowledge that the Loan Documents may
use several different limitations, tests or measurements to regulate the same or
similar matters, and they agree that these are cumulative and that each must be
performed as provided. Except as otherwise specifically provided in another Loan
Document (by specific reference to the applicable provision of this Agreement),
if any provision contained herein is in direct conflict with any provision in
another Loan Document, the provision herein shall govern and control.
14.9. Counterparts; Facsimile Signatures. Any Loan Document may be
executed in counterparts, each of which taken together shall constitute one
instrument. Loan Documents may be executed and delivered by facsimile, and they
shall have the same force and effect as manually signed originals. The Agent may
require confirmation by a manually-signed original, but failure to request or
deliver same shall not limit the effectiveness of any facsimile signature.
14.10. Entire Agreement. Time is of the essence of the Loan Documents.
The Loan Documents embody the entire understanding of the parties with respect
to the subject matter thereof and supersede all prior understandings regarding
the same subject matter.
14.11. Obligations of the Lenders. The obligations of each Lender
hereunder are several, and no Lender shall be responsible for the obligations or
Revolving Commitments of any other Lender. Amounts payable hereunder to each
Lender shall be a separate and independent debt, and each Lender shall be
entitled, to the extent not otherwise restricted hereunder, to protect and
enforce its rights arising out of the Loan Documents. It shall not be necessary
for the Agent or any other Lender to be joined as an additional party in any
proceeding for such purposes. Nothing in this Agreement and no action of the
Agent or the Lenders pursuant to the Loan Documents shall be deemed to
constitute the Agent and the Lenders to be a partnership, association, joint
venture, or any other kind of entity, nor to constitute control of any Borrower.
Each Borrower acknowledges and agrees that in connection with all aspects of any
transaction contemplated by the Loan Documents, the Borrowers, the Agent, the
Issuing Bank, and the Lenders have an arms-length business relationship that
creates no fiduciary duty on the part of the Agent, the Issuing Bank, or any
Lender, and each Borrower, the Agent, the Issuing Bank, and each Lender
expressly disclaims any fiduciary relationship.
14.12. Confidentiality. During the term of this Agreement and for 12
months thereafter, the Agent and the Lenders agree to take reasonable
precautions to maintain the confidentiality of any information that the
Borrowers deliver to the Agent and the Lenders and identify as confidential at
the time of delivery, except that the Agent and any Lender may disclose such
information (a) to their respective officers, directors, employees, Affiliates,
and agents, including legal counsel, auditors, and other professional advisors,
(b) to any party to the Loan Documents from time to time, (c) pursuant to the
order of any court or administrative agency, (d) upon the request of any
Governmental Authority exercising regulatory authority over the Agent or such
Lender, (e) which ceases to be confidential, other than by an act or omission of
the Agent or any Lender, or which becomes available to the Agent or any Lender
on a nonconfidential basis, (f) to the extent reasonably required in connection
with any litigation relating to any Loan Documents or transactions contemplated
thereby, or otherwise as required by Applicable Law, (g) to the extent
reasonably required for the exercise of any rights or remedies under the Loan
Documents, (h) to any actual or proposed party to a Bank Product or to any
Transferee, as long as such
LOAN AND SECURITY AGREEMENT
Page 106
Person agrees to be bound by the provisions of this Section, (i) to the National
Association of Insurance Commissioners or any similar organization, or to any
nationally recognized rating agency that requires access to information about a
Lender's portfolio in connection with ratings issued with respect to such
Lender, (j) to any investor or potential investor in an Approved Fund that is a
Lender or Transferee, but solely for use by such investor to evaluate an
investment in such Approved Fund, or to any manager, servicer, or other Person
in connection with its administration of any such Approved Fund, or (k) with the
consent of the Borrowers.
14.13. Certifications Regarding Indebtedness Agreements. The Borrowers
certify to the Agent and the Lenders that neither the execution or performance
of the Loan Documents nor the incurrence of any Obligations by the Borrowers
violates the Second Lien Credit Agreement, the Senior Subordinated Notes
Indenture, the Senior Notes Indentures, the Convertible Subordinated Notes
Indentures, the Intercreditor Agreement, or any agreement, document, or
instrument related thereto. The Borrowers further certify that (a) the Revolving
Commitments and the Obligations constitute "Permitted Bank Debt" under the
Second Lien Credit Agreement and the Intercreditor Agreement, (b) the Revolving
Commitments and the Obligations constitute "Designated Senior Debt" under the
Senior Subordinated Notes Indenture and the Convertible Subordinated Notes
Indentures, and (c) the Agent is the "Representative" under the Senior
Subordinated Notes Indenture and the Convertible Subordinated Notes Indentures.
The Agent may condition Borrowings, Letters of Credit, and other credit
accommodations under the Loan Documents from time to time upon the Agent's
receipt of evidence that the Revolving Commitments and Obligations continue to
constitute "Permitted Bank Debt" under the Second Lien Credit Agreement at such
time and are permitted thereunder.
14.14. Governing Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, PROVIDED THAT IN THE EVENT ANY COURT DETERMINES THAT NEW YORK LAW DOES NOT
GOVERN THE LAWS OF THE STATE OF TEXAS SHALL GOVERN, IN ANY SUCH CASE WITHOUT
GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL
LAWS RELATING TO NATIONAL BANKS).
14.15. Consent to Forum. EACH BORROWER HEREBY CONSENTS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH
JURISDICTION OVER DALLAS, TEXAS, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY
WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT
BY SUCH BORROWER SOLELY IN ANY SUCH COURT. EACH BORROWER IRREVOCABLY WAIVES ALL
CLAIMS, OBJECTIONS, AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT'S
PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE, OR INCONVENIENT FORUM. Nothing
herein shall limit the right of the Agent or any Lender to bring proceedings
against any Obligor in any other court. Nothing in this Agreement shall be
deemed to preclude enforcement by the Agent of any judgment or order obtained in
any forum or jurisdiction.
14.16. Waivers by the Borrowers. To the fullest extent permitted by
Applicable Law, each Borrower waives (a) the right to trial by jury (which the
Agent and each Lender hereby also waives) in any proceeding, claim or
counterclaim of any kind relating in any way to any Loan
LOAN AND SECURITY AGREEMENT
Page 107
Documents, Obligations, or Collateral, (b) presentment, demand, protest, notice
of presentment, default, non-payment, maturity, release, compromise, settlement,
extension, or renewal of any commercial paper, accounts, contract rights,
documents, instruments, chattel paper, and guaranties at any time held by the
Agent on which a Borrower may in any way be liable, and hereby ratifies anything
the Agent may do in this regard, (c) notice prior to taking possession or
control of any Collateral, (d) any bond or security that might be required by a
court prior to allowing the Agent to exercise any rights or remedies, (e) the
benefit of all valuation, appraisement and exemption laws, (f) any claim against
the Agent or any Lender, on any theory of liability, for special, indirect,
consequential, exemplary, or punitive damages (as opposed to direct or actual
damages) in any way relating to any Enforcement Action, Obligations, Loan
Documents, or transactions relating thereto, and (g) notice of acceptance
hereof. Each Borrower acknowledges that the foregoing waivers are a material
inducement to the Agent and the Lenders entering into this Agreement and that
the Agent and the Lenders are relying upon the foregoing in their dealings with
the Borrowers. Each Borrower has reviewed the foregoing waivers with its legal
counsel and has knowingly and voluntarily waived its jury trial and other rights
following consultation with legal counsel. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
14.17. Patriot Act Notice. The Agent and the Lenders hereby notify the
Borrowers that pursuant to the requirements of the Patriot Act, the Agent and
the Lenders are required to obtain, verify, and record information that
identifies each Borrower, including its legal name, address, tax ID number, and
other information that will allow the Agent and the Lenders to identify each
Borrower in accordance with the Patriot Act. The Agent and the Lenders will also
require information regarding each personal guarantor, if any, and may require
information regarding the Borrowers' management and owners, such as legal name,
address, social security number, and date of birth.
14.18. No Oral Agreement. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Remainder of page intentionally left blank; signatures begin on following page]
LOAN AND SECURITY AGREEMENT
Page 108
IN WITNESS WHEREOF, this Agreement has been executed and delivered as
of the date set forth above.
BORROWERS:
AMKOR TECHNOLOGY, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------------------
Title: Chief Financial Officer
-------------------------------------
UNITIVE, INC.
By: /s/ Xxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxxx
--------------------------------------
Title: Treasurer
-------------------------------------
UNITIVE ELECTRONICS, INC.
By: /s/ Xxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxxx
--------------------------------------
Title: Treasurer
-------------------------------------
Address for notices to all Borrowers:
------------------------------------
c/o Amkor Technology, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Telecopy: 000-000-0000
----------------------------------
LOAN AND SECURITY AGREEMENT
Page 109
AGENT:
BANK OF AMERICA, N.A.
By: /s/ Xxx X. Xxxxxxxxxxx
----------------------------------------
Xxx X. Xxxxxxxxxxx
Senior Vice President
Address for notices:
Bank of America, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
TX1-492-22-13
Xxxxxx, Xxxxx 00000
Attention: Loan Administration
Telecopy: (000) 000-0000
LOAN AND SECURITY AGREEMENT
Page 110
LENDERS:
BANK OF AMERICA, N.A.
By: /s/ Xxx X. Xxxxxxxxxxx
----------------------------------------
Xxx X. Xxxxxxxxxxx
Senior Vice President
Address for notices:
Bank of America, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
TX1-492-22-13
Xxxxxx, Xxxxx 00000
Attention: Loan Administration
Telecopy: (000) 000-0000
LOAN AND SECURITY AGREEMENT
Page 111
WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN)
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxx
--------------------------------------
Title: Vice President
-------------------------------------
Address for Notices:
-------------------
Wachovia Capital Finance Corporation (Western)
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Portfolio Manager - Amkor
Technology, Inc.
Telecopy: (000) 000-0000
LOAN AND SECURITY AGREEMENT
Page 112
