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EXHIBIT 10.7
EXECUTION COPY
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LOAN AGREEMENT
US$50,000,000
dated as of September 7, 1995
between
AMKOR/ANAM PILIPINAS, INC.
as Borrower
THE KOREA DEVELOPMENT BANK
as Lender
and
KDB ASIA LIMITED
as Agent
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▇▇▇ & Ko
Seoul, Korea
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TABLE OF CONTENTS
PAGE
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Section 1. Interpretation.............................................1
Section 2. The Facility...............................................4
Section 3. The Drawdowns..............................................5
Section 4. Interest...................................................6
Section 5. Repayment, Prepayment and Cancellation.....................7
Section 6. Fees and Expenses..........................................8
Section 7. Payments and Evidence of Debt..............................9
Section 8. Market Disruption.........................................10
Section 9. Change of Law or Circumstances............................11
Section 10. Taxes and Other Deductions................................12
Section 11. Representations and Warranties............................12
Section 12. Covenants.................................................14
Section 13. Events of Default.........................................16
Section 14. Default Interest..........................................19
Section 15. Indemnities...............................................19
Section 16. Lender and Agent..........................................20
Section 17. Assignment................................................23
Section 18. Governing Law and Jurisdiction............................23
Section 19. Miscellaneous.............................................24
SCHEDULE
CONDITIONS PRECEDENT DOCUMENTS
EXHIBITS
EXHIBIT A FORM OF NOTICE OF DRAWDOWN
EXHIBIT B FORM OF GUARANTY
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LOAN AGREEMENT
THIS AGREEMENT is made on the 7th day of September, 1995
BETWEEN:
(1) AMKOR/ANAM PILIPINAS, INC., a corporation duly organized and existing under
the laws of the Republic of Philippines with its registered head office at
KM ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, as borrower ("BORROWER");
(2) THE KOREA DEVELOPMENT BANK, of ▇▇-▇, ▇▇▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇,
▇▇▇▇▇, as lender ("LENDER"); and
(3) KDB ASIA LIMITED of Suite 2101-2103, Two Exchange Square, ▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ as agent ("AGENT").
IT IS HEREBY AGREED as follows:
SECTION 1. INTERPRETATION
1.1 Definitions. In this Agreement, unless the context requires otherwise:
"AFFILIATE" means any person directly or indirectly controlling, directly
or indirectly controlled by, or under direct or indirect common control
with, Borrower. For purposes of this definition, "CONTROL" (including
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH") means the power, directly
or indirectly, to direct or cause the direction of the management and
policies of any person whether through the ownership of voting securities
or by contract or otherwise;
"AVAILABILITY PERIOD" means the period commencing on the date of this
Agreement and ending on the earlier of (i) the date nine (9) months from
the date of this Agreement, and (ii) the date on which the Facility is
fully drawn, cancelled or terminated under the provisions of this
Agreement;
"BANKING DAY" means a day (excluding Saturday or Sunday) on which banks are
open for business in London and New York City, provided that in relation to
any period of notice it shall mean such a day in Seoul, London and New York
City;
"CENTRAL BANK" means the Bangko Sentral ng Pilipinas;
"DEBT-EQUITY RATIO" means, at any time, the ratio of total liabilities to
total equity of Borrower at such time. As used in this definition, the
terms "TOTAL LIABILITIES" and "TOTAL EQUITY" shall have the respective
meanings assigned to them by generally accepted accounting principles
applied on a basis consistent with those used in the
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preparation of the financial statements referred to in Section 11.10,
provided that the term "TOTAL LIABILITIES" shall include any and all debts
of Borrower regardless of the nature or maturity thereof (including without
limitation the Loan from time to time outstanding hereunder) and, provided,
further, that the term "TOTAL EQUITY" shall not in any event include
appraisal surplus, if any, of Borrower;
"DOLLARS" and "US$" mean the lawful currency of the United States of
America;
"DRAWDOWN" means each drawdown under the Facility pursuant to Section 3 or,
where the context so requires, the amount of such drawdown;
"ENCUMBRANCE" means:
(a) any mortgage, charge, pledge, lien, encumbrance, hypothecation or
other security interest or security arrangement of any kind;
(b) any arrangement whereby any rights are subordinated to any rights of
any third party; and
(c) any contractual right of set-off;
"EVENT OF DEFAULT" means any event or circumstance specified as such in
Section 13; and "PROSPECTIVE EVENT OF DEFAULT" means any event or
circumstance which with the giving of notice and/or the passage of time
and/or the making of any relevant determination and/or the forming of any
necessary opinion would be an Event of Default;
"FACILITY" means the loan facility to be made available under this
Agreement;
"GUARANTOR" means Anam Industrial Co., Ltd., a corporation organized and
existing under the laws of Korea with its registered head office at ▇▇▇-▇,
▇-▇▇, ▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇;
"GUARANTY" means the joint and several guaranty to be executed by Guarantor
in the form set forth in Exhibit B;
"INTEREST PAYMENT DATE" means the last day of an Interest Period;
"INTEREST PERIOD" means, in relation to the Loan, an interest period
ascertained in accordance with Section 4;
"KOREA" means the Republic of Korea;
"LIBOR" means, in relation to any relevant sum and any relevant period, the
rate which shall be determined by Agent to be the arithmetic mean (rounded
upwards to the nearest 1/16%) of the rates of interest of offered
quotations by principal banks in the London interbank market for deposits
in Dollars for a period equal or comparable to such period as displayed on
the "LIBO" page (or such other page as may replace such "LIBO" page for the
purpose of displaying such rates of interest) of the Reuters
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Monitor Screen as in effect at or about 11:00 a.m. (London time) on the
second London Banking Day before the first day of such period;
"LOAN" means the aggregate principal amount drawn and for the time being
outstanding under the Facility;
"LONDON BANKING DAY" means a day on which Dollar deposits may be dealt in
on the London interbank market;
"MARGIN" means nine-tenths of one percent (0.90%);
"NOTICE OF DRAWDOWN" means a notice in the form set forth in Exhibit A;
"PHILIPPINES" means the Republic of Philippines; and
"REPAYMENT DATE" means the date five (5) years after the date of the
initial Drawdown.
1.2 Construction. In this Agreement, unless the context requires otherwise, any
reference to:
an "AUTHORIZATION" includes any approvals, consents, licenses, permits,
franchises, permissions, registrations, resolutions, directions,
declarations and exemptions;
"INDEBTEDNESS" includes any obligation of any person for the payment or
repayment of money, whether present or future, actual or contingent,
including but not limited to any such obligation:
(a) under or in respect of any acceptance, ▇▇▇▇, bond, debenture, note or
similar instrument;
(b) under or in respect of any guarantee, indemnity, counter-security or
other assurance against financial loss;
(c) in respect of the purchase, hire or lease of any asset or service; or
(d) in respect of any indebtedness of any other person whether or not
secured by or benefitting from an Encumbrance on any property or asset
of such person;
"LAW" and/or "REGULATION" includes any constitutional provisions, treaties,
conventions, statutes, acts, laws, decrees, ordinances, subsidiary and
subordinate legislation, orders, rules and regulations having the force of
law and rules of civil and common law and equity and, for the avoidance of
doubt, includes Central Bank circulars;
a "MONTH" means a period starting on one day in a calendar month and ending
on the numerically corresponding day in the next calendar month or (if
there is no such numerically corresponding day or if a period starts on the
last day in a calendar month) on the last day of such next calendar month;
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an "ORDER" includes any judgment, injunction, decree, determination or
award of any court, arbitration or administrative tribunal;
a "PERSON" includes any individual, company, body corporate or
unincorporated or other juridical person, partnership, firm, joint venture
or trust or any federation, state or subdivision thereof or any government
or agency of any thereof;
"TAX" includes any tax, levy, duty, charge, impost, fee, deduction or
withholding of any nature now or hereafter imposed, levied, collected,
withheld or assessed by any taxing or other authority and includes any
interest, penalty or other charge payable or claimed in respect thereof and
"TAXATION" shall be construed accordingly.
1.3 Successors and Assigns. The expressions "BORROWER", "LENDER" and "AGENT"
shall, where the context permits, include their respective successors and
permitted assigns and any persons deriving title under them.
1.4 Miscellaneous. In this Agreement, unless the context requires otherwise,
references to statutory provisions shall be construed as references to
those provisions as replaced, amended, modified or re-enacted from time to
time; words importing the singular include the plural and vice versa and
words importing a gender include every gender; references to this Agreement
shall be construed as references to such document as the same may be
amended, supplemented or novated from time to time; unless otherwise
stated, references to Sections, the Schedule and the Exhibits are to
sections of and the schedule and the exhibits to this Agreement and
references to this Agreement include the Schedule and the Exhibits. Section
headings are inserted for reference only and shall be ignored in construing
this Agreement.
SECTION 2. THE FACILITY
2.1 Amount. Subject to the provisions of this Agreement, the aggregate
principal amount of the Facility available to Borrower is Fifty Million
Dollars (US$50,000,000).
2.2 Purpose. The proceeds of the Facility shall be used exclusively for
financing Borrower's expansion of its semiconductor assembly plants in
Philippines. Neither Agent nor Lender shall have any responsibility for the
application of the proceeds by Borrower.
SECTION 3. THE DRAWDOWNS
3.1 Availability of Drawdowns. Subject to Sections 3.2, 3.3 and 3.4 and the
other terms and conditions of this Agreement, Borrower may make Drawdowns
on any Banking Day during the Availability Period, provided that:
(a) the amount of each Drawdown shall be in the minimum amount of One
Million Dollars (US$1,000,000) or any larger amount being an integral
multiple of One Million Dollars (US$1,000,000); and
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(b) the aggregate principal amount of all Drawdowns shall not exceed the
aggregate principal amount of the Facility available for drawdown
under this Agreement.
3.2 Conditions of Initial Drawdown. The obligation of Lender to make the
Facility available in respect of the initial Drawdown is subject to the
conditions that:
(a) Agent shall have received, before the initial Notice of Drawdown is
given or at such later time as Agent may agree, all of the documents
and evidence specified in the Schedule hereto in form and substance
satisfactory to it. Copies required to be certified shall be certified
in a manner satisfactory to Agent by a duly authorized officer of
Borrower or other party concerned; and
(b) Agent shall have received not later than 12:00 noon (Seoul time) on
the fifth (5th) Banking Day before the date on which such Drawdown is
to be made (or such later time as Agent may agree) a duly completed
and signed Notice of Drawdown.
3.3 Conditions of Subsequent Drawdowns. The obligation of Lender to make the
Facility available in respect of each Drawdown subsequent to the initial
Drawdown is subject to the conditions that:
(a) Agent shall have received a timely Notice of Drawdown in accordance
with the terms, mutatis mutandis, of Section 3.2(b);
(b) Agent shall have received evidence that all Drawdowns previously made
hereunder have been duly registered with the Central Bank; and
(c) all documents and evidence delivered to Agent pursuant to Section
3.2(a) shall be in full force and effect.
3.4 Other Conditions Precedent. The obligations of Lender as described in the
first paragraph of each of Sections 3.2 and 3.3 are also subject to the
conditions that:
(a) no Event of Default or prospective Event of Default shall have
occurred (or would occur as a result of any Drawdown being made) and
all representations and warranties made by Borrower in or in
connection with this Agreement shall be true and correct as at the
date of the making of such Drawdown with reference to the facts and
circumstances then subsisting; and
(b) not later than 11:00 a.m. (Seoul time) on the second (2nd) Banking Day
before the date on which such Drawdown is proposed to be made, Agent
shall have received and found satisfactory such additional
information, legal opinions and documents relating or relevant to this
Agreement as Agent may reasonably require as a result of circumstances
arising or becoming known to Agent since the date of this Agreement.
3.5 Notice of Drawdown Irrevocable. A Notice of Drawdown once given shall be
irrevocable and Borrower shall be bound to make a Drawdown in accordance
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therewith, except as otherwise provided in this Agreement. If for any
reason a Drawdown is not made in accordance with the corresponding Notice
of Drawdown, Borrower shall on demand pay to Agent for the account of
Lender such amount as Lender may certify to be necessary to compensate it
for any loss or expense incurred in liquidating or redeploying funds
arranged for the purpose of the proposed Drawdown or otherwise as a
consequence of the proposed Drawdown not having been made in accordance
with such Notice of Drawdown.
3.6 Cancellation. Any part of the Facility undrawn at the end of the
Availability Period shall be cancelled.
SECTION 4. INTEREST
4.1 Interest. Borrower shall pay interest on the Loan in accordance with the
provisions of this Section.
4.2 Interest Periods. The Interest Periods applicable to the Loan shall be six
(6) months, provided that:
(a) the first Interest Period in relation to each Drawdown shall commence
on the date on which such Drawdown is made;
(b) in relation to each Drawdown after the initial Drawdown, the first
Interest Period shall end on the last day of the then current Interest
Period in respect of the initial Drawdown;
(c) each Interest Period (except the first Interest Period in relation to
each Drawdown) shall commence on the last day of the preceding
Interest Period;
(d) any Interest Period which would otherwise end on a non-Banking Day
shall instead end on the next following Banking Day or, if that
Banking Day is in another calendar month, on the immediately preceding
Banking Day;
(e) if any Interest Period commences on the last Banking Day of a calendar
month or on a day for which there is no numerically corresponding day
in the calendar month six (6) months thereafter that Interest Period
shall, subject to paragraphs (b) and (f), end on the last Banking Day
of such later calendar month; and
(f) any Interest Period which would otherwise extend beyond the Repayment
Date shall instead end on that date.
4.3 Rate and Calculation. The rate of interest applicable to the Loan for each
Interest Period shall be the rate per annum conclusively determined by
Agent to be the aggregate of LIBOR for that Interest Period and the Margin.
Interest shall accrue from day to day, shall be calculated on the basis of
the actual number of days elapsed and a 360 day year, including the first
day of the period during which it accrues but
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excluding the last, and shall be paid in arrears on each Interest Payment
Date. Agent shall notify Borrower of each interest rate determined under
this Section.
SECTION 5. REPAYMENT, PREPAYMENT AND CANCELLATION
5.1 Repayment. Subject as otherwise provided herein, Borrower shall repay the
Loan in one lump sum, together with all accrued interest and other monies
due and payable in connection with the Facility, on the Repayment Date.
5.2 Voluntary Prepayment. Borrower may prepay all or part of the Loan on any
Interest Payment Date after the end of the Availability Period, provided
that:
(a) Borrower shall have given to Agent not less than thirty (30) days'
prior written notice specifying the amount and date of prepayment;
(b) the amount of any partial prepayment shall be at least One Million
dollars (US$1,000,000) and an integral multiple of One Million Dollars
(US$1,000,000);
(c) Borrower shall have provided Agent with evidence that Borrower has
obtained any governmental authorizations necessary for such
prepayment; and
(d) all other sums then due and payable under this Agreement shall have
been paid.
5.3 Provisions Applicable to Prepayments. Any notice of prepayment given by
Borrower under any provision of this Agreement shall be irrevocable and
Borrower shall be bound to make a prepayment in accordance therewith.
Prepayments shall be made in inverse order of maturity and amounts prepaid
may not be reborrowed under this Agreement.
5.4 Other Amounts. If the Loan or any part thereof is prepaid under any
provision of this Agreement, Borrower shall also pay to Agent for the
account of Lender:
(a) at the time of prepayment, interest accrued up to the date of
prepayment and all other sums payable by Borrower under this
Agreement; and
(b) on demand, such amount as Lender may certify to be necessary to
compensate it for any loss or expense incurred as a consequence of
such prepayment (including any loss incurred in liquidating or
redeploying funds acquired to maintain the Loan).
5.5 No Voluntary Cancellation. Borrower may not cancel all or any part of the
Facility before the end of the Availability Period.
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SECTION 6. FEES AND EXPENSES
6.1 Front-end Fee. Borrower shall pay to Agent for the account of Lender a
front-end fee in accordance with a letter of even date herewith addressed
by Agent to and accepted by Borrower in accordance with the terms stated
therein.
6.2 Commitment Fee. Borrower shall pay to Agent for the account of Lender a
commitment fee at the rate of one-eighth of one percent (0.125%) per annum
during the period from the date of this Agreement up to and including the
last day of the Availability Period calculated on the daily undrawn balance
of the Facility on the basis of the actual number of days elapsed and a
year of 360 days. Such commitment fee shall be payable in arrears at the
end of each successive quarterly period from the date of this Agreement and
on the last day of the Availability Period.
6.3 Agency Fee. Borrower shall pay to Agent for its own account an agency fee
in accordance with a letter of even date herewith addressed by Agent to and
accepted by Borrower in accordance with the terms stated therein.
6.4 Expenses. Borrower shall forthwith on demand and whether or not any
Drawdown is made pay to or reimburse each of Agent and Lender for its own
account for all reasonable costs, charges and expenses (including legal and
other fees on a full indemnity basis and translation, communication,
advertisement, travel and all other out-of-pocket expenses) incurred by it
in connection with the negotiation, preparation, execution and (where
relevant) registration of this Agreement and any other documentation
required hereunder and the arrangement of the Facility and any amendment
hereto and any inspection, calculation, approval, consent or waiver to be
conducted, made or given by Agent or Lender pursuant to any provision of
this Agreement.
6.5 Enforcement Costs. Borrower shall from time to time forthwith on demand pay
to or reimburse each of Agent and Lender for all reasonable costs, charges
and expenses (including legal and other fees on a full indemnity basis and
all other out-of-pocket expenses) incurred by it in exercising any of its
rights or powers under this Agreement or in suing for or seeking to recover
any sums due under this Agreement or otherwise preserving or enforcing its
rights under this Agreement or in defending any claims brought against it
in respect of this Agreement.
6.6 Taxes. Borrower shall pay all present and future stamp and other like
duties and taxes and all notarial, registration, recording and other like
fees which may be payable in respect of this Agreement and shall indemnify
Agent and Lender against all liabilities, costs and expenses which may
result from any default in paying such duties, taxes or fees.
SECTION 7. PAYMENTS AND EVIDENCE OF DEBT
7.1 The Drawdowns. Amounts to be advanced by Lender to Borrower under this
Agreement shall be made available to Borrower by payment to such account as
shall
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be designated by Borrower in the relevant Notice of Drawdown. Borrower
shall be deemed to have borrowed the relevant amount when such payment is
made by Lender.
7.2 Payments by Borrower. All payments by Borrower under this Agreement shall
be made to Agent not later than 10:00 a.m. (New York time) on the relevant
due date in same day funds (or in such other funds as may then be customary
for the settlement in Dollars in New York City of transactions of this
nature) to the account of Agent (account no. 001-1-385903) with The Chase
Manhattan Bank N.A., New York (or to such other account as Agent may
designate), in each case under telex advice to Agent. Agent shall forthwith
transfer the amounts received by it in like funds as are received by Agent
and to such account or accounts as Lender shall have previously notified to
Agent.
7.3 Allocation of Receipts. If any amount received by Agent is less than the
full amount due, Agent in consultation with Lender shall have the right to
allocate the amount received towards principal, interest and/or other sums
owing hereunder as it considers appropriate.
7.4 Banking Days. Subject to Section 4.2, if any sum would otherwise become due
for payment on a non-Banking Day, that sum shall become due on the next
following Banking Day and interest shall be adjusted accordingly, except
that if the repayment due under Section 5.1 would then become due in
another calendar month, such repayment shall become due on the immediately
preceding Banking Day.
7.5 Evidence of Debt. Agent shall maintain on its books in accordance with its
usual practice a set of accounts recording the amounts from time to time
owing by Borrower hereunder. In any legal proceeding and otherwise for the
purposes of this Agreement the entries made in such accounts shall, in the
absence of manifest error, be conclusive and binding on Borrower as to the
existence and amounts of the obligations of Borrower recorded therein.
7.6 Certificate Conclusive and Binding. Where any provision of this Agreement
provides that Lender or Agent may certify or determine an amount or rate
payable by Borrower, a certificate by Lender or Agent as to such amount or
rate shall be conclusive and binding on Borrower in the absence of manifest
error.
SECTION 8. MARKET DISRUPTION
8.1 Market Disruption. If in relation to any Interest Period:
(a) Agent determines (which determination shall be conclusive and binding)
that, by reason of circumstances affecting the London interbank market
generally, adequate and fair means do not exist for ascertaining LIBOR
for that Interest Period; or
(b) less than two (2) rates appear on the Reuters Monitor Screen for that
Interest Period; or
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(c) Agent determines that deposits in Dollars in the required amount for
the relevant Interest Period are not available to it in the London
interbank market or that the average of the rates shown on the Reuters
Monitor Screen does not adequately reflect the cost to Lender of
obtaining funds for that Interest Period,
Agent shall promptly notify Borrower and no further Drawdown shall be made
unless and until an alternative basis is agreed upon in accordance with
Section 8.2.
8.2 Alternative Basis by Agreement. Immediately following such notification,
Borrower and Agent, in consultation with Lender, shall negotiate in good
faith with a view to agreeing upon an alternative basis for funding the
Loan and determining the applicable interest rate. If an alternative basis
is agreed within a period of thirty (30) days after such notification or
such longer period for discussion as Borrower and Agent may agree, the
alternative basis shall take effect in accordance with its terms.
8.3 Alternative Basis Determined by Lender. If an alternative basis is not so
agreed and any Drawdown has been made, Borrower shall pay interest to
Lender on the Loan for the relevant Interest Period at the rate per annum
equal to the aggregate of (i) the Margin and (ii) the cost (expressed as an
annual interest rate) to Lender of funding the Loan during the relevant
Interest Period (as conclusively determined by Lender).
8.4 Cancellation and Prepayment. If an alternative basis is not so agreed
pursuant to Section 8.2:
(a) if no Drawdown has been made, the Facility shall be cancelled and all
sums outstanding under this Agreement shall be paid to Agent at the
end of the period for negotiation ascertained in accordance with
Section 8.2; or
(b) if any Drawdown has been made, Agent may require Borrower to prepay
the Loan by giving written notice to Borrower specifying a prepayment
date which is not less than fourteen (14) days after such notice is
given. On the specified date the Facility shall be cancelled and
Borrower shall prepay the Loan in full together with interest thereon
from the beginning of the relevant Interest Period to the date of
prepayment. For this purpose, the interest rate from time to time
applicable to the Loan shall be the rate ascertained in accordance
with Section 8.3 in relation to the relevant period.
SECTION 9. CHANGE OF LAW OR CIRCUMSTANCES
9.1 Unlawfulness. If it becomes unlawful for Lender to give effect to its
obligations hereunder, Lender shall through Agent so notify Borrower,
whereupon the Facility shall be cancelled and Lender's obligation to
maintain the Loan shall cease. Borrower shall forthwith after such
notification, or such longer period as Lender may certify as being
permitted by the relevant law, prepay the Loan in full together with
interest accrued thereon to the date of prepayment and any other monies
owing hereunder to Lender.
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9.2 Increased Cost. If Lender determines that any change in any applicable law
or regulation or in the interpretation or application thereof or
compliance by Lender with any applicable direction, request or requirement
(whether or not having the force of law) of any competent governmental or
other authority does or will:
(a) subject Lender to any tax or other payment with reference to sums
payable by Borrower under this Agreement (except (i) tax on Lender's
overall net income in the jurisdiction of its principal office or
such other jurisdiction where its overall net income would ordinarily
(but for its entering into of this Agreement) be taxed or (ii) as
referred to in Section 10); or
(b) impose on Lender any other condition the effect of which is to (i)
increase the cost to Lender of maintaining the Facility or (ii)
reduce the amount of any payment receivable by, or the effective
return to, Lender in respect of the Facility,
Lender may through Agent so notify Borrower, and Borrower shall from time
to time upon demand (whether or not the Loan has been repaid) pay to Agent
for the account of Lender such amounts as Lender may certify to be
necessary to compensate it for such tax, payment, increased cost or
reduction (each an "INCREASED COST"). Where such increased cost arises
from circumstances contemplated above which affect Lender's business
generally or the manner in which or extent to which Lender allocates
capital resources, Lender shall be entitled to such increased cost as it
determines and certifies is fairly allocable to the Facility. So long as
the circumstances giving rise to such increased cost continue, Borrower
may, after giving Agent not less than thirty (30) days' prior written
notice, prepay all (but not only part) of the Loan in accordance with
Sections 5.3 and 5.4, and upon the giving of such notice the Facility
shall be cancelled and no further Drawdowns shall be made.
SECTION 10. TAXES AND OTHER DEDUCTIONS
10.1 Payments to be Free and Clear. All sums payable by Borrower under this
Agreement shall be paid in full without set-off or counterclaim or any
restriction or condition and free and clear of any tax or other deductions
or withholdings of any nature.
10.2 Grossing-up of Payments. If Borrower or any other person is required by
any law or regulation to make any deduction or withholding (on account of
tax or otherwise) from any payment for the account of Agent or Lender,
Borrower shall, together with such payment, pay such additional amount as
will ensure that Agent or Lender receives (free and clear of any tax or
other deductions or withholdings) the full amount which it would have
received if no such deduction or withholding had been required. Borrower
shall promptly forward to Agent copies of official receipts or other
evidence showing that the full amount of any such deduction or withholding
has been paid over to the relevant taxation or other authority.
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SECTION 11. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender and Agent as follows:
11.1 Incorporation and Qualification. Borrower is a corporation duly organized
and validly existing under the laws of Philippines. Each Affiliate is duly
organized and validly existing under the laws of its respective
jurisdiction of organization. Borrower and each Affiliate are qualified or
registered to do business in every jurisdiction where the failure to so
qualify or register could have a material adverse effect on Borrower or
Borrower and the Affiliates taken as a whole.
11.2 Power and Authority. Borrower has full legal right, power and authority to
carry on its present business, to own its properties and assets, to incur
the indebtedness and other obligations provided for in this Agreement, to
execute and deliver this Agreement and all other documents hereunder and
to perform and observe the terms and conditions hereof and thereof.
11.3 Authorization of Borrowing. Borrower has taken all appropriate and
necessary corporate and legal action to authorize the execution and
delivery of this Agreement and all other documents hereunder and to
authorize the performance and observance of the terms and conditions
hereof and thereof.
11.4 Authorizations and Approvals. Borrower has obtained or effected all
authorizations necessary for the valid execution, delivery and performance
of this Agreement and such authorizations are in full force and effect or,
by the date on which the initial Notice of Drawdown is given, such
authorizations will have been obtained and be in full force and effect and
there has been no default under the conditions of any of the same,
provided that the amount of each Drawdown made hereunder must be
registered with the Central Bank.
11.5 Agreement Binding; Compliance with Law and Other Agreements. This
Agreement constitutes the legal, valid and binding obligation of Borrower
enforceable in accordance with its terms. The execution, delivery and
performance of the terms of this Agreement, the payment by Borrower of all
amounts due on the dates and in the currency provided for herein and the
application of the Loan proceeds as provided in Section 2.2 hereof (i)
will not violate or contravene any provision of law or regulation which is
applicable to Borrower; (ii) will not conflict with the Articles of
Incorporation or Bylaws (or comparable constituent documents) of Borrower;
(iii) will not conflict with or result in the breach of any provision of,
or in the imposition of any Encumbrance under, any agreement or instrument
to which Borrower is a party or by which it or any of its properties or
assets is bound; and (iv) will not constitute a default or an event that,
with the giving of notice or the passing of time, or both, would
constitute a default under any such agreement or instrument.
11.6 No Event of Default. Borrower is not in default under any agreement or
obligation applicable to it or its assets or revenues, the consequences of
which default could materially and adversely affect its business or
financial condition or its ability to perform its obligations under this
Agreement and no Event of Default or prospective Event of Default has
occurred.
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11.7 Compliance with Law. Borrower and each Affiliate are in full compliance
with all applicable laws, regulations and orders, whether or not having
the force of law, including without limitation, tax laws.
11.8 Ranking of Loan. This Agreement is the direct, unconditional and general
obligation of Borrower. Borrower's obligations hereunder rank and will
rank at least pari passu in priority of payment and in all other respects
with all other unsecured indebtedness of Borrower except for those
preferred by operation of law.
11.9 Legal Actions. All registrations, recordings or filings required as a
condition to the legality, validity or enforceability of this Agreement
or any other document to be executed and delivered pursuant to the terms
of this Agreement have been made by Borrower, provided that the amount of
each Drawdown made hereunder must be registered with the Central Bank.
11.10 Financial Statements. The most recent audited financial statements of
Borrower for the time being (including the audited profit and loss
account and balance sheet) were prepared in accordance with all
applicable laws and regulations of the Philippines and generally accepted
accounting principles and policies consistently applied and show a true
and fair view of the financial position of Borrower as at the end of, and
the results of its operations for, the financial period to which they
relate and, as at the end of such period, Borrower did not have any
significant liabilities (contingent or otherwise) or any unrealized or
anticipated losses which are not disclosed by or reserved against in,
such financial statements, and there has been no material adverse change
in the business or financial condition of Borrower since the date of such
financial statements.
11.11 Encumbrances. No Encumbrance exists over all or any part of the property,
assets or revenues of Borrower other than those disclosed in the
financial statements referred to in Section 11.10 or those notified by
Borrower to Agent in writing prior to the date hereof.
11.12 Litigation. No litigation, administrative proceeding or arbitration is
presently pending or threatened against Borrower or any Affiliate or
their assets or revenues which, if adversely determined, could have a
material effect on the ability of Borrower to perform its obligations
under this Agreement.
11.13 Sovereign Immunity. Borrower is generally subject to civil and commercial
law and to legal proceedings and neither Borrower nor any of its assets
or revenues is entitled to claim immunity or privilege (sovereign or
otherwise) from any set-off, judgment, execution, attachment or other
legal process.
11.14 Shareholding of Borrower. Guarantor is the legal and beneficial owner of
forty percent (40%) of the issued and outstanding voting share capital of
Borrower.
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SECTION 12. COVENANTS
12.1 Financial Statements. Throughout the life of this Agreement, Borrower
shall provide Agent with copies of its unaudited financial statements for
the first six months of each fiscal year and its audited financial
statements for each fiscal year as they are available but in any event
not later than ninety (90) days after the close of each fiscal period
covered by an unaudited financial statement and not more than one hundred
and twenty (120) days after the close of each fiscal period covered by an
audited financial statement and such other information respecting the
financial condition and operations of Borrower as Agent may from time to
time reasonably request. Each financial statement provided hereunder
shall have been prepared in accordance with generally accepted accounting
principles in the Philippines consistently applied, and be accompanied by
a certificate executed by the principal financial officer of Borrower
stating (i) that as of the date of such financial statement Borrower is
in full compliance with all terms and conditions hereof, including
without limitation all financial covenants, and of any document executed
pursuant hereto, and (ii) that as of such date no Event of Default or
prospective Event of Default has occurred and is continuing.
12.2 Debt-Equity Ratio. Borrower shall not permit the Debt-Equity Ratio to
exceed 80:20 at any time during the life of the Facility, provided that
Borrower shall in no event permit its debt- equity ratio calculated
pursuant to the rules and regulations of the Central Bank to exceed the
ratio from time to time required to be maintained by Borrower under such
rules and regulations.
12.3 Taxes. Borrower shall pay and discharge and shall cause each Affiliate to
pay and discharge, all taxes, assessments and governmental charges upon
them or their respective assets promptly when due and, in any event,
prior to the date on which penalties may become attached thereto.
12.4 Representations and Warranties. Borrower shall ensure that the
representations and warranties contained in this Agreement remain at all
times true and accurate by reference to the facts and circumstances from
time to time existing.
12.5 Continuing Governmental Authorizations. (a) Borrower undertakes to
maintain in full force and effect all governmental authorizations
referred to in Section 11.4 and to obtain or effect any new or additional
governmental authorizations, as may be required or advisable in respect
of the performance by Borrower of any of the terms and conditions of this
Agreement.
(b) Borrower shall promptly, and in any event not later than fifteen
(15) days from the date of each Drawdown, forward to Lender evidence
that the amount of such Drawdown has been duly registered with the
Central Bank.
12.6 Maintenance and Continuity of Business. (a) Borrower shall maintain and
shall cause each Affiliate to maintain their respective corporate
existences in compliance with all applicable laws and regulations, and
Borrower shall maintain and shall cause each Affiliate to maintain the
present character of their respective businesses.
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(b) Borrower shall maintain insurance on and in relation to its
businesses, properties and assets with reputable underwriters or
insurance companies against such risks and in such amount as are
customary for businesses of a like nature in the jurisdiction in
which such properties and assets are located or in which such
businesses are conducted.
(c) Borrower shall not, except with the prior written consent of Agent,
(i) merge or consolidate with any other corporation or (ii) purchase
or otherwise acquire all or substantially all of the assets of any
other corporation or (iii) sell, lease, transfer or otherwise
dispose of all or any material portion of its property or assets,
whether by a single transaction or by a number of transactions
whether related or not, or (iv) declare or pay any dividend or make
any other income distribution to its shareholders if an Event of
Default or prospective Event of Default has occurred and has not
been remedied to the satisfaction of Lender.
12.7 Notice. As soon as possible but in any event within seven (7) days after
occurrence, Borrower shall give written notice to Agent of any Event of
Default or prospective Event of Default, or any litigation,
administrative proceeding or arbitration referred to in Section 11.12,
and of any other matter which has resulted or might result in a material
adverse change in Borrower's operations or financial condition or affect
Borrower's ability to pay, when due, any amounts due under this
Agreement.
12.8 Encumbrances. Borrower shall not permit any loan, debt, guarantee or
other obligation constituting indebtedness of Borrower or any other
person to be secured by any Encumbrance on any assets or future revenues
of Borrower without the prior written consent of Agent; provided,
however, that the foregoing shall not apply to Encumbrances arising by
operation of law or arising in the ordinary course of business of
Borrower where the amount covered by such Encumbrance is determined by
Agent not to be material.
12.9 Shareholding by Guarantor. Borrower shall procure that Guarantor at all
times owns beneficially and directly not less than forty percent (40%) of
the issued and outstanding voting share capital of Borrower.
12.10 Use of Facility. Borrower shall use the proceeds of the Facility
exclusively for the purposes specified in Section 2.2.
12.11 Further Documents. Borrower shall furnish Agent with all such other
documents and instruments and do all such other acts and things as Agent
may reasonably require to carry out the transactions contemplated herein
or in the documents to be delivered hereunder.
SECTION 13. EVENTS OF DEFAULT
13.1 Events of Default. Each of the following events or occurrences shall
constitute an Event of Default under this Agreement:
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(a) Borrower fails to pay when due any sum payable under this Agreement
when due or otherwise in accordance with the provisions of this
Agreement.
(b) Any representation, warranty or statement made or deemed to be made
by Borrower in this Agreement or in any document executed hereunder
or by Guarantor in the Guaranty proves to have been incorrect or
misleading in any respect considered by Lender to be material.
(c) Borrower or Guarantor fails duly and punctually to perform or
observe any obligation or covenant made by it in this Agreement or
the Guaranty or any other document executed hereunder or thereunder
and as a result thereof it might reasonably be considered by Lender
that the ability of Borrower or Guarantor to promptly comply with
their respective obligations under this Agreement or the Guaranty is
materially adversely affected thereby.
(d) Borrower or Guarantor fails to perform or observe any obligation or
covenant contained in this Agreement or the Guaranty other than as
referred to in paragraphs (b) and (c) above and such failure is not
remediable or, if remediable, continues for a period of thirty (30)
days after receipt by Borrower or Guarantor of notice of such
failure from Agent.
(e) Borrower, Guarantor or any Affiliate fails to discharge when due any
other indebtedness or to honor any guarantee of any such
indebtedness, or there occurs any event of default (however so
described) under any other agreement pursuant to which any
indebtedness or guarantee of Borrower, Guarantor or any Affiliate is
created, secured or evidenced, if the effect of such failure or
occurrence is to cause or permit such indebtedness or guarantee to
become or to be declared due prior to its normal maturity.
(f) Any change occurs in the financial or other condition of Borrower,
Guarantor or any Affiliate which may reasonably be considered by
Lender to materially adversely affect the ability of Borrower or
Guarantor to comply with all or any of their respective obligations
under this Agreement or the Guaranty.
(g) Borrower, Guarantor or any Affiliate becomes insolvent or commits or
permits any act of bankruptcy, which term shall include (i) the
filing of a petition in any bankruptcy, reorganization, winding-up
or liquidation proceeding or other proceeding analogous in purpose
or effect, (ii) the failure by Borrower, Guarantor or such Affiliate
to have any such petition filed by another party discharged within
thirty (30) days, (iii) the application for or consent to the
appointment of a receiver or trustee for the bankruptcy,
reorganization, winding-up or liquidation of Borrower, Guarantor or
such Affiliate or of a substantial portion of its properties or
assets, (iv) the making by Borrower, Guarantor or such
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Affiliate of an assignment for the benefit of, or any composition or
arrangement with, its creditors, (v) the admission in writing by
Borrower, Guarantor or such Affiliate of its inability to pay its
debts, (vi) the passing of a resolution by Borrower, Guarantor or
such Affiliate approving any reorganization, winding-up or
liquidation of Borrower, Guarantor or such Affiliate or of a
substantial portion of its properties or assets, (vii) the entry of
any court order or judgment confirming the bankruptcy or insolvency
of Borrower, Guarantor or such Affiliate or approving any
reorganization, winding-up or liquidation of Borrower, Guarantor or
such Affiliate or of a substantial portion of its properties or
assets, or (viii) any creditor of Borrower, Guarantor or such
Affiliate exercises a contractual right to assume the financial
management of Borrower, Guarantor or such Affiliate.
(h) A writ of attachment or execution or similar process is issued
against a substantial part of the assets of Borrower, Guarantor or
any Affiliate which remains undismissed, unbonded or undischarged
for a period of thirty (30) days.
(i) Borrower, Guarantor or any Affiliate ceases its operations or sells
or otherwise disposes of all or a substantial part of its assets
(whether by a single transaction or a series of transactions)
without the prior written consent of Lender; or Borrower, Guarantor
or any Affiliate decides to cease its operations or to sell or
otherwise dispose of all or a substantial part of its assets without
the prior written consent of Lender; or any governmental or other
authority expropriates or nationalizes or threatens to expropriate
or nationalize, all or a substantial part of the assets of Borrower,
Guarantor or any Affiliate.
(j) This Agreement, the Guaranty or any provision hereof or thereof
ceases for any reason to be in full force and effect or is
terminated or jeopardized or becomes invalid or unenforceable or if
there is any dispute regarding the validity or enforceability of the
same in each case in a manner which, in the opinion of Lender, might
materially and adversely affect the interests of Lender hereunder,
or if there is any purported termination or repudiation of the same.
(k) Any governmental authorization granted or required in connection
with this Agreement or the Guaranty is terminated or revoked or is
modified in any manner unacceptable to Lender.
(l) It becomes impossible or unlawful for Borrower or Guarantor to
perform or comply with any one or more of their respective
obligations under this Agreement or under the Guaranty.
(m) Borrower, Guarantor or any Affiliate voluntarily or involuntarily
merges or consolidates with any other entity without the prior
written consent of Lender.
(n) Guarantor ceases at any time to own beneficially and directly at
least forty percent (40%) of the issued and outstanding voting share
capital of Borrower without the prior written consent of Lender.
(o) Philippines or any competent authority thereof declares any
moratorium on the payment of its indebtedness or the indebtedness of
any governmental agency or authority thereof or juridical residents
or nationals therein, or Philippines segregates all or a portion of
its foreign exchange assets or earnings for the benefit of any
creditor or class of creditors.
(p) Any event occurs which in the reasonable opinion of Lender does or
will prevent or materially imperil fulfillment by Borrower or
Guarantor of their respective obligations under this Agreement or
the Guaranty.
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13.2 Consequences of Default. (a) If an Event of Default shall occur and be
continuing, Agent may, and upon written request by Lender shall, at the
same or different times take one or more of the following actions:
(i) to declare the Loan and accrued interest payable hereunder to
be, whereupon they shall become, immediately due and payable
without demand, notice or other legal formality of any kind,
all of which are expressly waived by Borrower; and/or
(ii) to declare any undrawn portion of the Facility to be
terminated, whereupon such portion of the Facility shall
forthwith terminate,
Provided, however, that upon the occurrence of any event described in
Section 13.1(g), all sums then owing by Borrower hereunder shall, without
any declaration or other action by Agent or Lender hereunder,
automatically be immediately due and payable, and the Facility shall be
immediately cancelled without demand, notice or other legal formality of
any kind, all of which are expressly waived by Borrower.
(b) In addition to the actions permitted in paragraph (a) above, Agent
may, and upon written request by Lender shall, take any action,
exercise any other right or pursue any other remedy conferred upon
it by this Agreement and/or any applicable law or regulation or
otherwise as a consequence of any Event of Default.
13.3 No Waiver. No waiver of any Event of Default shall constitute a waiver of
any other or any succeeding Event of Default except to the extent
provided in such waiver.
SECTION 14. DEFAULT INTEREST
14.1 Non-Payment. (a) If Borrower fails to pay any sum payable under this
Agreement when due, Borrower shall pay interest on such sum from and
including the due date to the date of actual payment (as well after as
before judgment) at the rate per annum conclusively determined by Agent
to be the higher of: (a) the aggregate of (i) one percent (1%) and (ii)
the rate of interest (if any) payable in respect of such sum immediately
before the due date; and (b) the aggregate of (i) one percent (1%), (ii)
the Margin and (iii) LIBOR calculated with reference to such periods and
such amounts as Agent considers appropriate or, if any of the
circumstances described in Section 8.1 applies, the rate from time to
time certified by Lender or Agent to be the rate representing the cost to
it of funding the unpaid sum. For these purposes, LIBOR shall be
determined by Agent on such date or dates on or after the due date for
payment as Agent may select.
(b) Interest at the rate or rates determined from time to time as
aforesaid shall accrue from day to day, shall be calculated on the
basis of the actual number of days elapsed and a 360 day year, shall
be compounded at the end of each successive funding period
considered appropriate by Agent for the purposes of this Section and
shall be payable from time to time on demand.
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14.2 Other Events of Default. If an Event of Default other than that described
in Section 13.1(a) shall occur and be continuing, Borrower shall pay to
Agent on demand interest on the amount of the Loan then outstanding from
and including the date of such default to and including the date the
default is cured (after as well as before judgment) at the rate which is
one percent (1%) per annum above the interest rate then applicable to the
Loan.
SECTION 15. INDEMNITIES
15.1 General Indemnity. Borrower shall indemnify Lender and Agent against all
losses, liabilities, damages, costs and expenses (including loss of
profit) which Lender or Agent may incur as a consequence of any Event of
Default or any other breach by Borrower of any of its obligations under
this Agreement or otherwise in connection with this Agreement (including
any loss or expense incurred in liquidating or redeploying funds acquired
to maintain the Loan and any interest or fees incurred in funding any
unpaid sum, but taking into account any interest paid by Borrower in
respect of such unpaid sum under Section 14).
15.2 Currency Indemnity. Dollars shall be the currency of account and of
payment in respect of sums payable under this Agreement. If an amount is
received in another currency, pursuant to a judgment or order in the
liquidation of Borrower or otherwise, Borrower's obligations under this
Agreement shall be discharged only to the extent that Lender or Agent (as
the case may be) may purchase Dollars with such other currency in
accordance with normal banking procedures upon receipt of such amount. If
the amount in Dollars which may be so purchased, after deducting any
costs of exchange and any other related costs, is less than the relevant
sum payable under this Agreement, Borrower shall indemnify Lender and
Agent against the shortfall. This indemnity shall be an obligation of
Borrower independent of and in addition to its other obligations under
this Agreement and shall take effect notwithstanding any time or other
concession granted to Borrower or any judgment or order being obtained or
the filing of any claim in the liquidation, dissolution or bankruptcy (or
analogous process) of Borrower.
SECTION 16. LENDER AND AGENT
16.1 Appointment. Lender hereby irrevocably appoints Agent to act as its agent
for the purposes set out in this Agreement and irrevocably authorizes
Agent to take such action on its behalf and to exercise and enforce such
rights, powers and discretions as are expressly or by implication
delegated to Agent by the terms hereof and such rights, powers and
discretions as are reasonably incidental thereto.
16.2 Scope of Duties. In respect of its duties and functions hereunder Agent
shall be considered to be acting solely as an agent of Lender in an
administrative capacity only and shall not be deemed a trustee of Lender
or an agent or trustee of Borrower for any purpose. Agent shall have no
duties or obligations except those provided for in this Agreement.
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16.3 Specific Duties and Obligations. Agent shall:
(a) promptly account to Lender all payments received by Agent from
Borrower or otherwise in connection with the Facility in accordance
with the provisions of this Agreement; and
(b) promptly inform Lender of:
(i) the contents of any document which Agent receives in respect
of the Facility and which it considers to be material; and
(ii) any material Event of Default of which an officer of Agent
acting in respect of this Agreement and in his capacity as
such has actual knowledge;
(c) save as otherwise provided in this Agreement, take or refrain from
taking any action in accordance with any lawful and proper
instructions given to it by Lender and any such action taken or
refrained from being taken shall be binding on Lender; and
(d) consult with Lender to the extent practicable before giving any
notice or making any declaration under Section 13.2 or effecting any
amendment or waiver under Section 19.3.
16.4 Rights and Powers. Agent may:
(a) perform any of its duties and functions hereunder through its
directors, officers, employees or agents;
(b) engage and pay for the advice or services of lawyers, accountants or
other experts or professional advisers as Agent may consider
necessary or desirable and rely and act upon such advice;
(c) refrain from exercising any of its rights, powers and discretions
unless and until instructed by Lender and refrain from acting upon
any instructions to commence legal proceedings until it has been
indemnified or secured to its satisfaction against any liabilities,
costs and expenses which it may incur;
(d) refrain from taking any action which in its opinion would or might
contravene any law in any relevant jurisdiction or render it liable
to any person and do all such things in its opinion necessary to
comply with any such law; and
(e) assume that no Event of Default or prospective Event of Default has
occurred and that no party is in breach of its obligations under
this Agreement unless Agent receives specific written notice to the
contrary.
16.5 No Liability to Lender. Agent shall have no liability or obligation to
Lender:
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(a) as a result of any failure or delay by Borrower or any other party
in performing its respective obligations under this Agreement;
(b) for the authorization, execution, legality, validity,
enforceability, effectiveness, genuineness or sufficiency of this
Agreement, the Guaranty or any other document relevant to this
transaction, or for the accuracy of any representation, warranty or
statement made in or in connection with this Agreement or the
Guaranty or for the accuracy or completeness of any information
supplied by any person whether or not such information was or is
circulated by Agent;
(c) to take any steps to ascertain whether an Event of Default has
occurred or whether Borrower or any other party is otherwise in
breach of any of its obligations under this Agreement;
(d) to provide any credit or other information concerning the financial
or other condition of Borrower or any other party other than as
expressly provided for herein; or
(e) to account for any sum received by Agent (other than for the account
of Lender) by way of fees or reimbursement of expenses in connection
with this Agreement or for any benefit received by it arising out of
any present or future banking or other relationship with Borrower.
16.6 No Liability to Borrower. Agent shall have no liability or obligation to
Borrower as a result of any failure or delay by Lender or any other party
in performing its respective obligations under this Agreement.
16.7 Liability and Indemnity. Neither Agent nor any of its directors,
officers, employees or agents shall be liable for any action taken or
omitted to be taken in connection with this Agreement unless resulting
directly from gross negligence or wilful misconduct. Lender shall
indemnify Agent (to the extent not reimbursed by Borrower) from and
against all claims, actions, liabilities, damages, penalties, losses,
costs and expenses (including legal fees) which Agent may incur in any
way relating to or arising out of this Agreement or otherwise in
connection with the Facility, unless and to the extent that any of the
foregoing results directly from Agent's gross negligence or wilful
misconduct.
16.8 Acknowledgment by Lender. Lender acknowledges to and agrees with Agent
that:
(a) it has itself been and will continue to be solely responsible for
making its own analysis of and investigations into the status,
creditworthiness, prospects, business, operations, assets and
condition of Borrower and any other person referred to herein and
for making its own decisions as to the entering into or the taking
or not taking of any action in connection with this transaction; and
(b) it has not relied upon any representation or statement made by Agent
as an inducement to its entering into this Agreement.
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16.9 Certifications by Agent. Where any provision of this Agreement provides
that Agent may certify an amount or rate payable by Lender, a certificate
as to such amount or rate shall be conclusive and binding on Lender.
16.10 Resignation of Agent. Agent may resign at any time by giving not less
than thirty (30) days' prior written notice to Lender and Borrower.
Lender shall have the right to appoint a successor Agent, but if it does
not do so within the thirty (30) day notice period the retiring Agent may
do so on its behalf. Agent's resignation shall not take effect until a
successor Agent has been appointed in writing signed by Lender and by
such successor. Upon such appointment the successor Agent shall succeed
to and become vested with all the rights, powers, discretions and duties
of the retiring Agent and the retiring Agent shall be discharged from any
further duties and obligations hereunder. The parties hereto agree to
execute whatever documents may be necessary to effect such a change of
Agent. After any retiring Agent's resignation Sections 16.5, 16.6 and
16.7 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.
16.11 No Partnership. Nothing contained or implied in this Agreement shall
constitute or be deemed to constitute a partnership between any of the
parties hereto.
SECTION 17. ASSIGNMENT
17.1 Borrower. Borrower shall not assign or transfer any of its rights or
obligations hereunder.
17.2 Lender. Lender may assign or transfer all or any part of its rights,
benefits and obligations hereunder upon written notice of such assignment
or transfer to Borrower. Borrower shall take any and all actions Lender
may reasonably require to perfect and complete any such assignment or
transfer, including without limitation the giving of its consent thereto.
Upon any assignment or transfer by Lender, the assignee or transferee
shall be entitled, to the extent of the interest assigned or transferred,
to the benefit of the indemnities, tax reimbursements and rights of
set-off of Lender pursuant to the provisions of this Agreement as fully
as if it were a party hereto. The acts of Lender or the failure of Lender
to act hereunder shall in all circumstances be conclusive and binding on
any transferee or assignee of Lender's interest hereunder.
17.3 Participations. Lender may at any time grant one or more participations
in its rights and/or obligations under this Agreement but no other party
hereto shall be concerned in any way with any participation so granted.
17.4 Disclosure. Lender may disclose to (a) its head office, other branch
offices, auditors, relevant authorities and other persons as required
under any prevailing law or banking regulations and to (b) a transferee,
assignee or participant or potential transferee, assignee or participant,
in each case, on a confidential basis such information about Borrower as
Lender shall consider appropriate.
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SECTION 18. GOVERNING LAW AND JURISDICTION
18.1 Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with
the laws of the State of New York, the United States of America.
18.2 Jurisdiction. Borrower agrees that any legal action or proceeding arising
out of or relating to this Agreement may be brought in any court of the
State of New York or Federal court of the United States of America
located in the City and State of New York and irrevocably submits to the
non-exclusive jurisdiction of such courts. The foregoing, however, shall
not limit the rights of Lender to bring any legal action or proceeding or
to obtain execution of judgment in any other jurisdiction.
18.3 Process Agent. Borrower irrevocably appoints Anam USA, Inc., currently
located at Goshen Corporate Park ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, U.S.A., as its agent to accept on its behalf service of any and
all process or other documents which may be served in any action or
proceedings in any such court. If for any reason the agent named above
(or its successor) no longer serves as agent of Borrower for this
purpose, Borrower shall promptly appoint a successor agent satisfactory
to Lender and notify Lender thereof, provided that until Lender receives
such notification, it shall be entitled to treat the agent named above
(or its said successor) as the agent of Borrower for the purposes of this
Section. Borrower agrees that any such legal process shall be
sufficiently served on it if delivered to such agent for service at its
address for the time being in New York, New York whether or not such
agent gives notice thereof to Borrower.
18.4 No Limitation on Right of Action. Nothing herein shall limit the right of
Lender to commence any legal action against Borrower and/or its property
in any other jurisdiction or to serve process in any manner permitted by
law, and the taking of proceedings in any jurisdiction shall not preclude
the taking of proceedings in any other jurisdiction whether concurrently
or not.
18.5 Waiver of Immunity. Borrower irrevocably waives any immunity to which it
or its property may at any time be or become entitled, whether
characterized as sovereign immunity or otherwise, from any set-off or
legal action in New York, New York or elsewhere, including immunity from
service of process, immunity from jurisdiction of any court or tribunal,
and immunity of any of its property from attachment prior to judgment or
from execution of a judgment.
SECTION 19. MISCELLANEOUS
19.1 Term. The term of this Agreement shall commence on the date first set
forth above and shall end on the date of termination of the Facility or,
if later, upon payment in full of all principal, interest and other sums
payable by Borrower hereunder. The representations and warranties of
Borrower set forth herein shall survive the making of the Loan and the
indemnities of Borrower contained herein shall survive repayment of the
Loan.
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26
19.2 Entire Agreement. This Agreement and the documents referred to herein
constitute the entire obligation of the parties hereto and supersede any
prior expressions of intent or understandings with respect to this
transaction.
19.3 Amendment. Any amendment or waiver of any provision of this Agreement and
any waiver of any default under this Agreement shall only be effective if
made in writing and signed by or on behalf of the party against whom the
amendment or waiver is asserted. For these purposes, any amendment or
waiver which is made in writing by Agent at the direction of Lender shall
be binding on Lender.
19.4 Waiver; Cumulative Rights. The failure or delay of Agent or Lender to
require performance by Borrower of any provision of this Agreement shall
not affect its right to require performance of such provision nor shall
any single or partial exercise of the same preclude any further exercise
thereof or the exercise of any other right, power or remedy. Each and
every right, power and remedy granted to Lender and Agent hereunder or by
law shall be cumulative and may be exercised in part or in whole from
time to time.
19.5 Severability. If any one or more of the provisions contained in this
Agreement or any document executed in connection herewith shall be
invalid, illegal or unenforceable in any respect under any applicable
law, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.
19.6 Set-Off. To the extent permitted by law, Lender and Agent may at any time
set off or apply any and all deposits by Borrower with Lender or, as the
case may be, Agent, at its head office or at any branch, subsidiary or
affiliate of its head office (whether general or special, time or demand,
matured or unmatured) in reduction of amounts due to it hereunder.
19.7 Notices. (a) Each notice, demand or other communication to be given or
made under this Agreement shall be in writing and delivered or sent to
the relevant party at its address or telex number or fax number set out
below (or such other address or telex number or fax number as the
addressee has by five (5) days' prior written notice specified to the
other parties):
To Borrower: Amkor/Anam Pilipinas, Inc.
KM ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Fax No.: ▇▇-▇-▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
To Lender: The Korea Development Bank
▇▇-▇, ▇▇▇▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇-▇▇,
▇▇▇▇▇, ▇▇▇▇▇
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27
Telex No.: K27463
Answerback: KODBANK
Fax No.: ▇▇▇-▇▇▇▇
Attention: International Loan Department
To Agent: KDB Asia Limited
▇▇▇▇▇ ▇▇▇▇-▇▇▇▇
Two ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Telex No.: 65276, 80439
Answerback: KDB HX, KDBA HX
Fax No.: ▇▇▇-▇▇▇▇
Attention: Mr. Su ▇▇▇ ▇▇▇
(b) Any notice, demand or other communication so addressed to the
relevant party shall be deemed to have been delivered (i) if given
or made by letter, when actually delivered to the relevant address,
(ii) if given or made by telex, when despatched with confirmed
answerback and (iii) if given or made by fax, when despatched with a
simultaneous confirmation of transmission, provided that, if such
day is not a working day in the place to which it is sent, such
notice, demand or other communication shall be deemed delivered on
the next following working day at such place.
(c) All notices, demands or other communications hereunder and any other
documents required to be delivered hereunder shall be in the English
language or accompanied by a certified translation thereof into the
English language.
(d) All communications between Lender and Borrower in relation to this
Agreement shall be made through Agent.
19.8 Counterparts. This Agreement may be signed in any number of counterparts.
Any single counterpart or a set of counterparts signed, in either case,
by all parties hereto shall constitute a full and original agreement for
all purposes.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized signatories as of the day and year
first written above.
BORROWER
AMKOR/ANAM PILIPINAS, INC.
By: /s/ (ILLEGIBLE)
--------------------------------
Name:
Title:
LENDER
THE KOREA DEVELOPMENT BANK
By: /s/ (ILLEGIBLE)
--------------------------------
Name:
Title:
AGENT
KDB ASIA LIMITED
By: /s/ (ILLEGIBLE)
--------------------------------
Name:
Title:
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SCHEDULE
CONDITIONS PRECEDENT DOCUMENTS
1. The Guaranty duly executed by Guarantor.
2. Certified copies of appropriate consents, licenses, approvals or
authorizations of and filings or registrations with such governmental
authorities in any jurisdiction, including the Philippines and Korea, as
may be necessary or advisable to authorize the borrowings under the Loan
Agreement and the execution and performance of the Loan Agreement or the
Guaranty and to permit payment and remittance in Dollars of all payments at
the times, at the places and in the manner provided for under the Loan
Agreement, including without limitation:
(a) the approval of the Central Bank authorizing the execution, delivery
and performance by Borrower of the Loan Agreement; and
(b) the approval of the Central Bank approving the terms and conditions of
an executed copy of the Loan Agreement.
3. In relation to Borrower:
(a) certified copies of:
(i) the Certificate of Registration of Borrower's Articles of
Incorporation issued by the Securities and Exchange Commission
of the Philippines;
(ii) the Articles of Incorporation and By-Laws of the Borrower;
(iii) the Certificate of Good Standing issued by the Securities and
Exchange Commission of the Philippines;
(iv) the Municipal permits and licenses from the Municipality of
Muntinlupa, Metro Manila; and
(v) the minutes of a meeting of the Board of Directors of Borrower
adopting resolutions authorizing the execution and performance
of the Loan Agreement and further authorizing the authority of
the persons signing the Loan Agreement and any other documents
to be executed by Borrower pursuant thereto; and
(b) a certificate of the Corporate Secretary of Borrower certifying:
(i) the incumbency and specimen signatures of the directors acting
at the meeting of the Board of Directors referred to in (a)(v)
above; and
30
(ii) the incumbency and specimen signatures of the persons
authorized to sign the documents as referred to in (a)(v)
above; and
(c) written confirmation of acceptance of appointment from the agent for
service of process named in Section 18.3 of the Loan Agreement.
4. In relation to Guarantor:
(a) certified copies of:
(i) the Articles of Incorporation of Guarantor;
(ii) the Commercial Registry extracts relating to Guarantor;
(iii) the minutes of a meeting of the board of directors of Guarantor
adopting resolutions authorizing the execution and performance
of the Guaranty and further authorizing the authority of the
person signing the Guaranty and any other documents to be
executed by Guarantor in relation thereto; and
(iv) the seal certificate for the Representative Director of
Guarantor participating in the meeting referred to in (iii)
above;
(b) a certificate of the Representative Director of Guarantor certifying
(aa) the documents referred to in paragraph 4(a) above, (bb) the
incumbency and specimen signature and/or seal impression of the person
authorized to sign the documents as referred to in (a)(iii) above and
(cc) that the seal impressions set out beside the names of each
director listed in the minutes of the meeting referred to in (a)(iii)
above are the respective genuine seal impressions of each such
director; and
(c) written confirmation of acceptance of appointment from the agent for
service of process named in Section 11.3 of the Guaranty.
Favorable legal opinions of Korean counsel, Philippine counsel and New York
counsel to Agent and Lender.
5. Such other documents relating to any of the matters contemplated under the
Loan Agreement and the Guaranty as Agent may request.
S-2
31
EXHIBIT A
FORM OF NOTICE OF DRAWDOWN
__________, 1995
To: KDB Asia Limited
▇▇▇▇▇ ▇▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Re: US$50,000,000 Loan Agreement dated September 7. 1995
Dear Sirs:
We refer to the above Loan Agreement, and hereby give notice that we wish to
make a Drawdown under the Facility on _________, 199_ in the amount of
US$__________.
The proceeds of the Drawdown are to be used exclusively for the purposes
specified in the Loan Agreement.
The proceeds of the Drawdown should be disbursed by credit to account number
[ ] in favour of [ ] with [ ].
We hereby certify to you that as of the date of this notice:
(a) the representations and warranties set out in Section 11 of the Loan
Agreement, repeated with reference to the facts and circumstances
subsisting at the date of this notice, remain true and correct;
(b) no Event of Default or prospective Event of Default has occurred which
remains unwaived or unremedied or would result from the making of the
Drawdown; and
(c) all applicable conditions precedent specified in Section 3 of the Loan
Agreement have been met.
Terms defined in the Loan Agreement shall have the same meanings when used in
this notice.
32
For and on behalf of
AMKOR/ANAM PILIPINAS, INC.
By_______________________________________
Name:
Title:
A-2
33
EXHIBIT B
FORM OF GUARANTY
THIS GUARANTY is made on the 7th day of September, 1995
BY:
ANAM INDUSTRIAL CO., LTD., a corporation organized and existing under the laws
of Korea with its registered head office at ▇▇▇-▇, ▇-▇▇, ▇▇▇▇▇▇-▇▇▇▇,
▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ("GUARANTOR").
IN FAVOUR OF:
(1) THE KOREA DEVELOPMENT BANK of ▇▇-▇, ▇▇▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇
as lender ("LENDER"); and
(2) KDB ASIA LIMITED of Suite 2101-2103, Two Exchange Square, ▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ as agent ("AGENT").
WHEREAS:
(A) By a loan agreement (the "LOAN AGREEMENT") dated September 7, 1995 and made
between (1) Amkor/Anam Pilipinas, Inc., as borrower ("BORROWER"), (2)
Lender and (3) Agent, Lender has agreed to make available to Borrower a
loan facility in an aggregate principal amount of up to US$50,000,000 (the
"FACILITY") upon the terms set out therein.
(B) It is a condition precedent to Lender making the Facility available to
Borrower that Guarantor enter into this Guaranty.
NOW THIS GUARANTY WITNESSES as follows:
SECTION 1. INTERPRETATION
In this Guaranty, unless the context requires otherwise:
(a) terms and expressions defined in the Loan Agreement have the same meanings
when used in this Guaranty; and
(b) "SECURED INDEBTEDNESS" means all and any sums (whether principal, interest,
fees or otherwise) which are or at any time may become payable by Borrower
under the Loan Agreement and all other monies hereby secured.
B-1
34
(c) "DEBT-EQUITY RATIO" means, at any time, the ratio of total liabilities to
total equity of Guarantor at such time. As used in this definition, the
terms "TOTAL LIABILITIES" and "TOTAL EQUITY" shall have the respective
meanings assigned to them by generally accepted accounting principles
applied on a basis consistent with those used in the preparation of the
financial statements referred to in Section 8.1(j).
SECTION 2. GUARANTY
2.1 Guarantor irrevocably and unconditionally guarantees, as primary obligor
and not merely as surety to Lender and Agent, jointly and severally with
Borrower, the due and punctual payment of the Secured Indebtedness when and
as the same shall become due and payable, whether at stated maturity, upon
acceleration, extension or otherwise, according to the terms of the Loan
Agreement.
2.2 Guarantor agrees to pay to Agent for the account of Lender any amount of
the Secured Indebtedness in the currency or respective currencies in which
the same is payable under the terms of the Loan Agreement at any time on
demand against Agent's invoice accompanied by Agent's simple certificate
stating that Borrower has failed to pay the same pursuant to the Loan
Agreement, which invoice shall be final and conclusive as to the amount
owed absent manifest error.
2.3 This Guaranty shall be a continuing guaranty and shall remain in full force
and effect until the Secured Indebtedness has been paid in full and shall
not be (or be construed as to be) discharged by any intermediate discharge
or payment of or on account of the Secured Indebtedness or any settlement
of accounts between Agent or Lender and Borrower or anyone else.
SECTION 3. INDEMNITY
Without prejudice to the guaranty contained in Section 2, Guarantor
unconditionally and irrevocably undertakes, as a separate, additional and
continuing obligation and as a primary obligor, to indemnify Lender and Agent
from time to time on demand against all losses, liabilities, damages, costs and
expenses whatsoever arising out of any failure by Borrower to make due and
punctual payment of the Secured Indebtedness or in the due and punctual
performance and observance of all other obligations under the Loan Agreement.
This indemnity shall remain in effect notwithstanding that the guaranty under
Section 2 ceases to be valid or enforceable against Guarantor for any reason
whatsoever.
SECTION 4. PRESERVATION OF RIGHTS
4.1 The obligations of Guarantor herein contained shall be in addition to and
not in substitution for any other guaranty or security which Lender or
Agent may now or hereafter hold in respect of the Secured Indebtedness.
Lender and Agent may change or release any such guaranty or security and
such shall have no effect whatsoever on this Guaranty.
B-2
35
4.2 Neither the obligations of Guarantor hereunder nor the rights, powers and
remedies conferred upon Lender and Agent by this Guaranty or by law shall
be discharged, impaired or otherwise affected by:
(a) the winding-up, dissolution, administration or reorganization of
Borrower or any change in its status, function, control or ownership;
(b) any of the obligations of Borrower under the Loan Agreement being or
becoming illegal, invalid or unenforceable in any respect;
(c) any variation or amendment to the terms of the Loan Agreement or any
other document referred to therein;
(d) the granting of any time or indulgence to Borrower or any other
person;
(e) the invalidity or unenforceability of any obligation or liability of
Borrower under the Loan Agreement;
(f) any invalidity or irregularity in the execution of the Loan Agreement
or this Guaranty;
(g) any deficiency in the powers of Borrower to enter into or perform any
of its obligations under the Loan Agreement or any irregularity in the
exercise thereof or any lack of authority by any person purporting to
act on behalf of Borrower;
(h) any other guarantee or security which Lender or Agent may now or
hereafter hold in respect of the Secured Indebtedness being or
becoming wholly or partly void, voidable or unenforceable;
(i) any waiver, exercise, omission to exercise, compromise, renewal or
release of any rights against Borrower or any other person or any
compromise, arrangement or settlement with any of the same; or
(j) any act, omission, event or circumstance which would or may but for
this provision operate to prejudice, affect or discharge this Guaranty
or the obligations of Guarantor hereunder.
4.3 Lender or Agent shall not be obliged before exercising any of the rights,
powers or remedies conferred upon it under this Guaranty or by law:
(a) to make any demand of Borrower;
(b) to take any action or obtain judgement in any court against Borrower;
(c) to make or file any claim or proof in a winding-up or dissolution of
Borrower; or
▇-▇
▇▇
(▇) to enforce or seek to enforce any other security taken in respect of
the Secured Indebtedness.
4.4 Guarantor represents to and undertakes with Lender and Agent that it has
not taken and will not take any security in respect of its liability under
this Guaranty whether from Borrower or any other person. So long as any sum
remains owing by Borrower to Agent or Lender, Guarantor shall not exercise
any right of subrogation or any other rights of a surety or enforce any
security or other right or claim against Borrower (whether in respect of
its liability under this Guaranty or otherwise) or any other person who has
guaranteed or given any security in respect of the Secured Indebtedness or
claim in the insolvency or liquidation of Borrower or any such other person
in competition with Lender. If Guarantor receives any payment or benefit in
breach of this Section, it shall hold the same upon trust for Lender and
Agent as a continuing security for the Secured Indebtedness.
SECTION 5. COSTS, CHARGES AND EXPENSES
Guarantor shall from time to time forthwith on demand pay to or reimburse Lender
and Agent for all costs, charges and expenses (including legal and other fees on
a full indemnity basis) incurred by Lender or Agent in connection with the
preparation and execution of this Guaranty and in exercising any of its rights
or powers hereunder or in suing for or seeking to recover any sums due hereunder
or otherwise preserving or enforcing its rights hereunder or in defending any
claims brought against it in respect of this Guaranty or in releasing this
Guaranty upon payment of the Secured Indebtedness.
SECTION 6. TAXES AND OTHER DEDUCTIONS
6.1 All sums payable by Guarantor under this Guaranty shall be paid in full
without set-off or counterclaim or any restriction or condition and free
and clear of any tax or other deductions or withholdings of any nature.
6.2 If Guarantor or any other person is required by any law or regulation to
make any deduction or withholding (on account of tax or otherwise) from any
payment for the account of Lender or Agent, Guarantor shall, together with
such payment, pay such additional amount as will ensure that Lender or
Agent receives (free and clear of any tax or other deductions or
withholdings) the full amount which it would have received if no such
deduction or withholding had been required. Guarantor shall promptly
forward to Agent copies of official receipts or other evidence showing that
the full amount of any such deduction or withholding has been paid over to
the relevant taxation or other authority.
SECTION 7. CURRENCY INDEMNITY
If an amount due to Lender or Agent from Guarantor in one currency (the "FIRST
CURRENCY") is received by Lender or Agent in another currency (the "SECOND
CURRENCY"), Guarantor's obligations in respect of such amount shall only be
discharged to the extent that Lender or
B-4
37
Agent may purchase the first currency with the second currency in accordance
with normal banking procedures. If the amount of the first currency which may be
so purchased (after deducting any costs of exchange and any other related costs)
is less than the amount so due, Guarantor shall indemnify Lender or Agent
against the shortfall.
SECTION 8. REPRESENTATIONS AND WARRANTIES
8.1 Guarantor represents and warrants to Lender and Agent as follows:
(a) Guarantor is a corporation duly organized and validly existing under
the laws of Korea. Guarantor is qualified or registered to do business
in every jurisdiction where the failure to so qualify or register
could have a material adverse effect on Guarantor.
(b) Guarantor has full legal right, power and authority to carry on its
present business, to own its properties and assets, to incur the
indebtedness and other obligations provided for in this Guaranty, to
execute and deliver this Guaranty and all other documents hereunder
and to perform and observe the terms and conditions hereof and
thereof.
(c) Guarantor has taken all appropriate and necessary corporate and legal
action to authorize the execution and delivery of this Guaranty and
all other documents hereunder and to authorize the performance and
observance of the terms and conditions hereof and thereof.
(d) Guarantor has obtained or effected all authorizations necessary for
the valid execution, delivery and performance of this Guaranty and
such authorizations are in full force and effect or, by the date on
which the initial Notice of Drawdown is given, such authorizations
will have been obtained and be in full force and effect and there has
been no default under the conditions of any of the same.
(e) This Guaranty constitutes the legal, valid and binding obligations of
Guarantor enforceable in accordance with its terms. The execution,
delivery and performance of the terms of this Guaranty or the payment
by Guarantor of all amounts due on the dates and in the currency
provided for herein (i) will not violate or contravene any provision
of law or regulation which is applicable to Guarantor; (ii) will not
conflict with the Articles of Incorporation or By-laws (or comparable
constituent documents) of Guarantor; (iii) will not conflict with or
result in the breach of any provision of, or in the imposition of any
Encumbrance under, any agreement or instrument to which Guarantor is a
party or by which it or any of its properties or assets is bound; and
(iv) will not constitute a default or an event that, with the giving
of notice or the passing of time, or both, would constitute a default
under any such agreement or instrument.
(f) Guarantor is not in default under any agreement or obligation
applicable to it or its assets or revenues, the consequences of which
default could materially and adversely affect its business or
financial condition or its ability to perform its obligations under
this Guaranty and no Event of Default or prospective Event of Default
has occurred.
B-5
38
(g) Guarantor is in full compliance with all applicable laws, regulations
and orders, whether or not having the force of law, including without
limitation, tax laws.
(h) This Guaranty is the direct, unconditional and general obligation of
Guarantor. Guarantor's obligations hereunder rank and will rank at
least pari passu in priority of payment and in all other respects with
all other unsecured indebtedness of Guarantor except for those
preferred by operation of law.
(i) All registrations, recordings or filings required as a condition to
the legality, validity or enforceability of this Guaranty or any other
document to be executed and delivered pursuant to the terms of this
Guaranty have been made by Guarantor.
(j) The most recent audited financial statements of Guarantor for the time
being (including the audited profit and loss account and balance
sheet) were prepared in accordance with all applicable laws and
regulations of Korea and generally accepted accounting principles and
policies consistently applied and show a true and fair view of the
financial position of Guarantor as at the end of, and the results of
its operations for, the financial period to which they relate and, as
at the end of such period Guarantor did not have any significant
liabilities (contingent or otherwise) or any unrealized or anticipated
losses which are not disclosed by or reserved against in, such
financial statements, and there has been no material adverse change in
the business or financial condition of Guarantor since the date of
such financial statements.
(k) No litigation, administrative proceeding or arbitration is presently
pending or threatened against Guarantor or its assets or revenues
which, if adversely determined, could have a material effect on the
ability of Guarantor to perform its obligations under this Guaranty.
(l) Guarantor is generally subject to civil and commercial law and to
legal proceedings and neither Guarantor nor any of its assets or
revenues is entitled to claim immunity or privilege (sovereign or
otherwise) from any set-off, judgment, execution, attachment or other
legal process.
(m) Guarantor is the legal and beneficial owner of forty percent (40%) of
the issued and outstanding voting share capital of Borrower.
SECTION 9. COVENANT
9.1 Guarantor undertakes and agrees with Lender and Agent as follows:
(a) Throughout the life of this Guaranty, Guarantor shall provide Agent
with copies of its unaudited financial statements for the first six
months of each fiscal year and its audited financial statements for
each fiscal year as they are available but in any event not later than
ninety (90) days after the close of each fiscal period covered by an
unaudited financial statement and not more than one hundred and twenty
(120) days after the close of each fiscal period covered by an audited
financial statement and such other information respecting the
financial condition and operations of Guarantor
B-6
39
as Agent may from time to time reasonably request. Each financial statement
provided hereunder shall have been prepared in accordance with generally
accepted accounting principles in Korea consistently applied, and be
accompanied by a certificate executed by the principal financial officer of
Guarantor stating (i) that as of the date of such financial statement
Guarantor is in full compliance with all terms and conditions hereof,
including without limitation all financial covenants, and of any document
executed pursuant hereto, and (ii) that as of such date no Event of Default
or prospective Event of Default has occurred and is continuing.
(b) Guarantor shall pay and discharge all taxes, assessments and
governmental charges upon it or its assets promptly when due and, in
any event, prior to the date on which penalties may become attached
thereto.
(c) Guarantor shall ensure that the representations and warranties
contained in this Guaranty remain at all times true and accurate by
reference to the facts and circumstances from time to time existing.
(d) Guarantor undertakes to obtain or effect any governmental
authorizations as may be required or advisable in respect of the
performance by Guarantor or Borrower of any of the terms and
conditions of this Guaranty or, as the case may be, the Loan
Agreement, including, without limitation, any filings or periodic
reports required under the Foreign Exchange Management Act of Korea
and regulations thereunder.
(e) Guarantor shall maintain its corporate existence in compliance with
all applicable laws and regulations, and Guarantor shall maintain the
present character of its business.
(f) Guarantor shall maintain insurance on and in relation to its
businesses, properties and assets with reputable underwriters or
insurance companies against such risks and in such amount as are
customary for businesses of a like nature in the jurisdiction in which
such properties and assets are located or in which such businesses are
conducted.
(g) Guarantor shall not, except with the prior written consent of Agent
and Lender, (i) merge or consolidate with any other corporation or
(ii) purchase or otherwise acquire all or substantially all of the
assets of any other corporation or (iii) sell, lease, transfer or
otherwise dispose of all or any material portion of its property or
assets, whether by a single transaction or by a number of transactions
whether related or not, or (iv) declare or pay any dividend or make
any other income distribution to its shareholders if an Event of
Default or prospective Event of Default has occurred and has not been
remedied to the satisfaction of Agent.
(h) As soon as possible but in any event within seven (7) days after
occurrence, Guarantor shall give written notice to Agent of any Event
of Default or prospective Event of Default, or any litigation,
administrative proceeding or arbitration referred to in Section 8. 1
(k), and of any other matter which has resulted or might result in a
material adverse change in Guarantor's operations or financial
condition or affect Guarantor's ability to pay, when due, any amounts
due under this Guaranty.
B-7
40
(i) Guarantor shall at all times own beneficially and directly not less
than forty percent (40%) of the issued and outstanding voting share
capital of Borrower.
(j) Guarantor shall furnish Lender with all such other documents and
instruments and do all such other acts and things as Lender may
reasonably require to carry out the transactions contemplated herein
or in the documents to be delivered hereunder.
(k) Guarantor shall not permit the Debt-Equity Ratio to exceed 6:1 at any
time during the life of the Facility.
SECTION 10. ASSIGNMENT
10.1 Guarantor shall not assign or transfer any of its rights or obligations
hereunder.
10.2 Lender may at any time assign, transfer or grant participations in all or
any part of the rights, benefits and obligations under the Loan Agreement
and this Guaranty pursuant to the terms of Section 17 of the Loan
Agreement and Guarantor hereby irrevocably consents to, and agrees to be
bound by, such assignment or transfer. Lender may make disclosures in
accordance with, and Guarantor shall do such acts and things as provided
in, Section 17 of the Loan Agreement but as if references to Borrower were
references to Guarantor.
SECTION 11. GOVERNING LAW AND JURISDICTION
11.1 This Guaranty shall be governed by and construed in accordance with the
laws of the State of New York, the United States of America.
11.2 Guarantor agrees that any legal action or proceeding arising out of or
relating to this Guaranty may be brought in any Court of the State of New
York or Federal court of the United States of America located in the City
and State of New York and irrevocably submits to the non-exclusive
jurisdiction of such courts. The foregoing, however, shall not limit the
rights of Lender or Agent to bring any legal action or proceeding or to
obtain execution of judgment in any other jurisdiction.
11.3 Guarantor irrevocably appoints Anam USA, Inc., currently located at Goshen
Corporate Park ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, U.S.A., as
its agent to accept on its behalf service of any and all process or other
documents which may be served in any action or proceedings in any such
court. If for any reason the agent named above (or its successor) no
longer serves as agent of Guarantor for this purpose, Guarantor shall
promptly appoint a successor agent satisfactory to Agent and notify Agent
thereof, provided that until Agent receives such notification, it shall be
entitled to treat the agent named above (or its said successor) as the
agent of Guarantor for the purposes of this Section. Guarantor agrees that
any such legal process shall be sufficiently served on it if delivered to
such agent for service at its address for the time being in New York, New
York whether or not such agent gives notice thereof to Guarantor.
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11.4 Nothing herein shall limit the right of Lender or Agent to commence any
legal action against Guarantor and/or its property in any other
jurisdiction or to serve process in any manner permitted by law, and the
taking of proceedings in any jurisdiction shall not preclude the taking of
proceedings in any other jurisdiction whether concurrently or not.
11.5 Guarantor irrevocably waives any immunity to which it or its property may
at any time be or become entitled, whether characterized as sovereign
immunity or otherwise, from any set-off or legal action in New York, New
York or elsewhere, including immunity from service of process, immunity
from jurisdiction of any court or tribunal, and immunity of any of its
property from attachment prior to judgment or from execution of a
judgment.
SECTION 12. NOTICES
12.1 Each notice, demand or other communication to be given or made to
Guarantor under this Guaranty shall be in writing and delivered at its
address or telex number or fax number set out below (or such other address
or telex number or fax number as Guarantor has by five (5) days' prior
written notice specified to Agent):
To Guarantor: Anam Industrial Co., Ltd.
▇▇▇-▇, ▇-▇▇
▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇
Telex No.: K27381, K26540
Answerback: ANAMIC
Fax No.: ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇.▇. ▇▇▇
12.2 Any notice, demand or other communication so addressed shall be deemed to
have been delivered (i) if given or made by letter, when actually
delivered to the relevant address, (ii) if given or made by telex, when
despatched with confirmed answerback and (iii) if given or made by fax,
when despatched with a simultaneous confirmation of transmission.
12.3 Any notice, demand or other communication from Guarantor to Lender or
Agent shall be given or made in accordance with Section 19.7 of the Loan
Agreement.
SECTION 13. MISCELLANEOUS
13.1 To the extent permitted by law, Lender or Agent may at any time set off or
apply any and all deposits by Guarantor with Lender or, as the case may
be, Agent, at its head office or at any branch, subsidiary or affiliate of
its head office (whether general or special, time or demand, matured or
unmatured) in reduction of amounts due to it hereunder.
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13.2 Lender or Agent may place and keep any monies received by virtue of this
Guaranty (whether before or after the insolvency or liquidation of
Guarantor or Borrower) to the credit of a suspense account for so long as
Lender may think fit in order to preserve its rights to ▇▇▇ or prove for
the whole amount of its claims against Guarantor, Borrower or any other
person.
13.3 The failure or delay of Lender or Agent to require performance by
Guarantor of any provision of this Guaranty shall not affect its right to
require performance of such provision nor shall any single or partial
exercise of the same preclude ally further exercise thereof or the
exercise of any other right, power or remedy. Each and every right, power
and remedy granted to Agent and Lender hereunder or by law shall be
cumulative and may be exercised in part or in whole from time to time.
13.4 If any one or more of the provisions contained in this Guaranty shall be
invalid, illegal or unenforceable in any respect under any applicable law,
the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
13.5 Any amendment or waiver of any provision of this Guaranty and any waiver
of any default under this Guaranty shall only be effective if made in
writing and signed by Agent.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed by its
duly authorized representative as of the day and year first written above.
GUARANTOR
ANAM INDUSTRIAL CO., LTD.
By_________________________________
Name:
Title:
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